Spanish Broadcasting System, Inc. (SBSAA) Earnings Call Transcript & Summary

Good day, and welcome to the Spanish Broadcasting Third Quarter 2021 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Brad Edwards, Investor Relations. Please go ahead.

Thank you, Betsy, and good morning, everyone. Before we begin, please recognize that certain statements on this conference call are not historical fact. They may be deemed, therefore, to be forward-looking statements under the Private Securities Litigation Reform Act of 1995. In particular, statements about future results expected to be obtained from the company's current strategic initiatives are forward-looking statements. Many important factors may cause the company's actual results to differ materially from those discussed in any such forward-looking statements. Spanish Broadcasting System undertakes no obligation to publicly update or revise these forward-looking statements. Please also note that we will be discussing non-GAAP financial measures. The company believes that operating income or loss before depreciation and amortization, gain or loss on the disposal of assets for capitalization costs, impairment charges and other operating income, excluding noncash stock-based compensation or adjusted OIBDA is useful in evaluating its performance because it reflects a measure of performance for the company's stations before considering costs and expenses related to capital structure and dispositions. This information is not intended to be considered in isolation or as a substitute for operating income, net income or loss, cash flows from operating activities or any other measure used in determining the company's operating performance and liquidity that is calculated in accordance with U.S. GAAP. A reconciliation of the company's U.S. GAAP information to adjusted OIBDA is provided in the tables attached to the company's 2021 third quarter earnings release, which is available on the Investor Relations section of the company's website at www.spanishbroadcasting.com. I will now turn the conference over to Mr. Albert Rodriguez.

Good morning, ladies and gentlemen. Welcome to the SBS 2021 Third Quarter Conference Call. On today's call, we'll provide an overview of recent operating developments and review our financial results. Joining me today are Jose Molina, our Chief Financial Officer; and Richard Lara, our General Counsel. The third quarter marked a continuation of our solid financial results as we delivered double-digit rebound in both total revenues and adjusted OIBDA. Our audio revenues and adjusted OIBDA exceeded 2019 levels and for the second consecutive quarter, which speaks to the underlying power of our assets and our ability to capitalize on improving conditions across all of our markets. It's worth noting we continue to deliver strong results largely without the benefit of our live events platform, which demonstrates the power of our content and our growing multi-platform audience. SBS generated higher revenue growth than every audio broadcaster in the nation in the third quarter 2021 versus 2020 and versus 2019. Our operating margins remain at the top of the industry. And we are well positioned for the future, given the expanding purchasing power and influence of the Latino consumer across many of the nation's largest markets. Our audio stations remain at the top of the markets they serve. Our AIRE national radio network continues to outperform the competition. And our digital and mobile engagement metrics are expanding. Today, our aggregate weekly audience is over 25 million and continues to grow on a monthly basis. We remain on track for an accelerated growth in 2021 and expect to enter 2022 with a significant momentum across SBS. Now let's review our operations, and we'll start with our AIRE Radio Network. For the third quarter of 2021, AIRE Radio Network outpaced the marketplace by 43%. AIRE Network was able to widen the gap and had strong categories in the period. Such categories included government plus 268%; general services at 87%; insurance were plus 276%; and finally, QSR with plus 117%. AIRE continues to gain momentum and assert its position as the largest minority owned and served by Spanish language audio network in the nation. And its core competitive advantages include 95% reach in the U.S. Hispanic market, 15 million weekly listeners across 100 markets nationwide, presence in the top 50 U.S. Hispanic markets. One of the key highlights for AIRE's syndication initiatives include El Terrible morning show, which currently is across more than 20 stations. Markets include Houston, San Diego, Portland, Chicago, Los Angeles, San Francisco, Spokane and Vegas, just to name a few. As of today, AIRE's pacing plus 55%. We are confident that the network landscape will have an ongoing recovery as the country continues to open and brands regain their confidence. Now focusing on the audio division. We engage and serve millions of weekly listeners. Our top ranked stations cover the nation's largest DMAs and deliver solid rating performance and audience growth. Our commitment and bond to the Hispanic community have never been more substantial, given our leading content offerings. These compelling station formats have become a daily part of our listeners' lives, hyper-local health, wellness and support information to every community we've reached. As a result of our exceptional programming content effort, our New York stations have each soared to the top of big [app]. WSKQ Mega 97.9 FM is the #1 audio station in New York and the nation as confirmed by Nielsen. WPAT 93.1 Amor is also a top-rated station in New York. The station combo in New York is outperforming all of its competitors in any language. Combining terrestrial and our online digital stream ratings indicates that WSKQ La Mega FM is the indisputable #1 most listened to station in all of New York in any language format and in the coveted demographics, adults 18 to 34, 18 to 49 and 25 to 54. We have been the institutional station favorite of the Hispanic listener in all of the tristate area as well for over a decade. We are converting our leading station brands' presence across all media platforms, driving audience augmentation and expanding revenue streams and all advertising programs we deliver to all of our creative ad partners. Now let's take a look at Los Angeles, KLAX La Raza 97.9 FM is the #1 Hispanic regional Mexican station in the market in adults 18 to 34. And KXOL Mega 96.3 FM just came in at the #2 most listened to station per Nielsen. Our strategic programming moves included bringing back home the top and beloved DJ in all of Los Angeles, DJ Eddie One. Our ratings have increased on Mega by over 25%. We have the #1 and #2 station in all of Los Angeles in the adults 18 to 34 demographic group. In Miami, WXDJ FM El Zol 106.7 has been the #1 Hispanic station adults 18 to 49 and 25 to 54, the only station in Miami with a leading Hispanic female host with El Vacilon de la Manana La Gatita. The show also includes the former City Miami Mayor, Tomas Regalado as the news guru. The show has a fun twist and represents the best of a local community. WCMQ Zeta 92.3 FM has the #1 morning show with TV journalists Oscar Haza, and it remains #1 overall weekly in adults 18 to 34. WRMA Ritmo 93 -- 95.7 has a unique format with a hyper specific target of Cuban Miami community. Ritmo 95 has the only Cubatón format music station globally and has been the primary voice of the local Cuban support community. Wherever you go in Puerto Rico, you will run into someone listening to 1 of our 4 stations, which covers a distinct and specific target and music top formats in Puerto Rico. SBS Continues to dominate the island in Puerto Rico as we are the largest audio operator in all of the island. WODA La Nueva 94 FM is the irrefutable #1 most listened to station in the entire island. Our overall station impressions continues to surpass the vast market. According to Miller Kaplan, the third quarter marked our 19th back-to-back quarter outperformance as we beat our competitors by 140 basis points. Now let's turn to MegaTV, where our national footprint remains more than 20 million homes via satellite in cable with our broadcast partners across the continent. Our prime-time content remains an area of focus, and we are making progress driving audience growth among critical demographic groups. Turning now to our live events division. SBS Entertainment continues focus on the company's core heritage shows that will begin with Mega Bash in New York City on December 4 at the Prudential Center, followed by MiamiBash at the FTX Arena in Miami on December 17. Both concerts have shown a large interest from the audience, and we expect to have sold-out shows in these markets. SBS Entertainment is preparing for the first ever 3-day Calibash concert at L.A. Staples Center starting January 14 through the 16th and is expected to be a complete sellout in the coming month. The event is also outpacing prior years in local sponsorship revenue. Calibash Las Vegas and [indiscernible] were launched on October 15 in Las Vegas. And we are happy to report that Dia Nacional De La Banda completely sold out in record time. And Calibash continues to pace at all-time record levels for a full sellout closer -- close to the date of the event as in prior years. The company is now focusing on a robust calendar of events for 2022, including Mexican regional format concerts in markets like Chicago, San Francisco, Los Angeles and Atlanta, to name a few additional markets that will be activated with events in Orlando with Día Nacional de la [Salsa and YOY] that are the company's outdoor festival events that have been proven successful. The Mi Casa Es Tu Casa audio concert tour is launched during the pandemic in 2020 continues to be a valued programming asset. And the division is building upon the success to include a live streaming element to expand the audience engagement and sponsorship opportunities. Looking ahead, we are closely focused on COVID-19 protocols and vaccination rates in our key markets. We are hard at work at collaborating with venues, artists and appropriate safety professionals to make sure we can execute events safely for everyone. Now turning to our mobile and digital platforms and strategic initiatives. Over the last several years, we have had great success transforming SBS into a leading multimedia Hispanic media company. Today, we connect brands with more Hispanics than ever before, and aggregate audience continues to expand. For our brand partners, there has never been a more important time to have a Latino-focused marketing strategy and outreach program. The Latino population is growing rapidly in size, cultural influence and purchasing power. SBS has the multimedia assets, the reach and over 4 decades of experience and commitment to the Latino community across the U.S. And as such, we deliver compelling and integrated advertising opportunities that cross all major media platforms and offer access to coveted demographic groups. As I stated before, our aggregate audience continues and will grow. As of September 30, our total audience was up 18% compared to the prior year. LaMusica platform reaches over 1.5 million, who combine for over 16 million streaming hours per month. Usage and adoption of LaMusica continues to accelerate as it offers a truly unique mobile and digital experience, including original daily video content, short-form programming, millions of songs and personalized experience. Overall, we have placed strategic emphasis on identifying new digital revenue streams as well as increasing our CPMs on existing digital offerings. During the third quarter, our total streaming audience surpassed 1.5 million unique listeners per month. This audience delivered over 45 million listening hours and over 38 million total sessions in the quarter. Given Latinos' heavily over-indexed on mobile phone ownership and usage, mobile remains the primary driver of our mobile digital traffic and accounted for approximately 95% of our total digital traffic in the quarter. In the third quarter, LaMusica had a record of 445 million audio ad impressions, in addition to the 120 million displayed impressions and 75 million video pre-roll impressions. A key driver of our growth in streaming hours and sessions has been the expansion of our LaMusica user base as well as increasing consumption of our podcast and playlist products with an average time spent listening of over 45 minutes in the most popular categories. In summary, we continue to deliver industry-leading growth, remain a market leader across all of our business segments. And aggregate audience continues to grow. Today, we connect with leading brands with a rapidly growing Latino population in more ways than ever. We entered the fourth quarter with strong momentum in our business and a clear focus on finishing the year strong and sustaining that momentum into 2022. Our aggregate audience has never been stronger. Our content never been higher demand, and our connection with the Latino population has never been deeper. We expect to enter 2022 in strong position to drive accelerated growth, further expand our aggregate audience and continue delivering value to our stakeholders. Thanks for your time and attention. Now let me turn the call over to Jose Molina for the financial overview.

Thank you, Albert. Turning to our third quarter results. Our consolidated revenues totaled $39 million compared to $30 million for the same prior year period, resulting in an increase of approximately $9 million or 30%. Excluding political sales, a non-GAAP measure, our consolidated revenues totaled $38.5 million compared to $27.9 million, resulting in an increase of $10.6 million or 38%. Additionally, our consolidated revenues exceeded the same pre-pandemic period in 2019 by $2.7 million or 7%. Our radio revenues totaled $35.9 million, increasing $10.9 million or 43%. This growth was primarily due to increases in all cash advertising revenue streams, which continue to improve sequentially quarter-over-quarter. Radio revenues, excluding political sales, totaled $35.5 million compared to $24.3 million for the same prior year period, resulting in an increase of $11.2 million or 46%. Additionally, our radio revenues of $35.9 million increased $3.4 million or 11% when compared to $32.5 million for the same pre-pandemic period in 2019. Our television revenues decreased approximately $1.9 million due to lower local and national revenues, primarily related to the decrease in political sales. Excluding political sales, our television revenues totaled $3 million compared to $3.6 million, resulting in a decrease of $600,000. Our consolidated adjusted OIBDA, a non-GAAP measure, totaled $10 million compared to $8.4 million for the same prior year period, representing an increase of $1.6 million or 19%. Consolidated adjusted OIBDA, excluding the effects of political sales, totaled $9.6 million compared to $6.5 million for the same prior year period, resulting in an increase of $3.1 million or 46%. Our radio adjusted OIBDA increased $6 million primarily due to the revenue growth of $10.9 million, partially offset by higher operating expenses of $4.9 million. Our radio station operating expenses grew mainly due to increases in compensation and benefits, commissions, advertising, barter, music license fees, rating services and office expenses, partially offset by a decrease in our allowance for doubtful accounts and an increase in production tax credits. Radio adjusted OIBDA, excluding the effects of political sales, totaled $15.1 million compared to $8.8 million for the same prior year period, resulting in an increase of $6.3 million or 71%. Additionally, our radio adjusted OIBDA of $15.5 million increased $2.5 million or 19% when compared to the $13 million for the same pre-pandemic period in 2019. Our television adjusted OIBDA decreased $3 million due to lower revenues and the increase of operating expenses of $1.1 million. Our television station operating expenses increased due to the lack of production tax credits in 2021, which resulted in an increase of our net production cost compared to the same prior year period. Television adjusted OIBDA, excluding the effects of political sales, decreased $1.9 million compared to the same prior year period. Corporate expenses increased $1.4 million primarily due to higher compensation and benefits, outside services and travel-related expenses, offset by a decrease in D&O insurance. Capital expenditures during the third quarter were approximately $806,000. And as of yesterday, we had cash on hand of approximately $12 million. In addition, we have the undrawn $15 million revolver fully available if needed. This will conclude our formal remarks. And with that, I would like to turn the call over to the operator for any questions. Operator?

[Operator Instructions] The first question comes from Tim Daggett with RBC.

Could you talk a little bit more about the fourth quarter? Do you think you can get back to the fourth quarter of 2019 number? I think you did $45 million or $46 million of revenue in 4Q '19. Is that reasonable? And I think over the summer, you talked about getting back to $50 million of EBITDA at some point in 2022. Is that still reasonable to think we can get to that $50 million number, about 6x leverage at some point in 2022?

So let's answer both of your questions. That is the target, obviously, for 2022. And with respect to your question, on pacings, we're having an incredible fourth quarter as it relates to 2019. I can tell you the overall pacings for radio compared to 2019 were plus 23% for October; November were up double digits as well, 11; and December, 12; and consolidated overall, 15. In particular, I want to highlight our network, which is plus 140 for October; November, 240; and December, up 200. And with our strategic partnership that we have with Katz as a representation with our new representation that kicked in, that's a strategic business unit that is up significantly. And that is up in the plus 40 to 50 compared to 2019. And there are a lot of drivers with specific categories that are helping us. So we're well on our way for a very successful fourth quarter as it relates to 2019. So.

I heard that. Yes, I heard it correctly. So you're saying versus 2019, you're pacing up on a consolidated basis, plus 15%. Is that right?

Correct.

Awesome. And in terms of political revenues next year, I think we talked about maybe $15 million or so is the expectation for 2022. I think you did closer to $9 million in 2020. Is that still like a good number to use, $15 million? Yes?

Correct. And the landscape for that has changed for us historically. Spanish Broadcasting, as always, we've always focused on swing states in particular, Florida being such a battleground state. But we have really prepared our infrastructure as it relates to our audio platforms. And I'll tell you, we are very successful with our programmatic infrastructure as it relates to programmatic revenues. And I'll tell you in this last election cycle in Virginia and New Jersey, we were very active in both of those states and early this year with Georgia as well. And so we expect to be in all of the states nationwide after where there is a Hispanic audience. So that's definitely our target as it relates to political revenues.

Okay. That's great. And in terms of the margins, I know you guys are killing it on the radio EBITDA margins in particular. Is that sustainable in the fourth quarter?

I believe it is.

Yes. Yes, it is, Tim.

Okay. Great. And then maybe one last one for me. In terms of maybe M&A opportunities, is there anything you're seeing out there in the market in terms of potential acquisitions in the radio space? And any update -- I know you own a bunch of real estate down in the Miami area in terms of potentially selling that and maybe getting some cash for that. Is there any market for that asset down in Florida? What's the thought on that? I believe it's your -- one of your buildings down in Miami in terms of potential sale of that. That's it.

Yes. So...

Jose, if you want to answer that question, but look, we're always looking for the right opportunity. And post pandemic, I'll tell you, there's been a huge transition from a successful shift from working with our clients through the Zoom meetings and through working with them through electronic means. So as there is a need of less inventory space, not only in Miami, but in other markets, obviously, that's something that we'll continue to look at in terms of continuing to grow our platform if it makes sense, if the numbers make sense. Look, of course, we're the fastest-growing revenue group, radio group in the nation for a reason. The census just recently showed that the Hispanic minority group is the fastest-growing group in the nation. And we have a particular emphasis that we are a minority owned media, and we are very successful. And if you look at the landscape of all of our competitors, all of our industry peers with all due respect, regardless of language, we grew revenue faster than any other radio group in the nation. That's number one. Number two, the multicultural space is a space that all of the advertisers are looking at to invest. That's why you're seeing the staggering numbers of revenue growth that really are impressive from an industry perspective. Everybody is taking a look at it, and everybody is like, what is Spanish Broadcasting doing? It's really, obviously, the content that we develop. And it resonates with the community and the listeners that we reach and viewers. So we're going to continue to go faster than everybody as it relates to an audience. And as it relates to a revenue perspective, post -- pre-pandemic, we had on our audio platforms -- we had 60 million audio impressions on our audio platforms. And as of October, we had 180 million. So it just shows the power of the Hispanic voice. And our people in content and programming are just killing it, and we are -- we're maximizing it with respect to revenue. So if there's an opportunity that presents, we are right there at the forefront. And we have obviously the right team to be able to capitalize on making the right investment or acquisition. With respect to growing any kind of platform, we have a proven track record. Now I think Jose want to answer. Jose, is there anything else you want to add?

I think you answered it all. I just wanted to say we get approached, and we're always looking at opportunities that make sense, that there is synergies involved and makes sense to us to grow the business.

The next question comes from Patrick Wang with Voya Investments.

Congrats on the nice quarter.

Well, we're doing -- you know how we're doing. We're doing great because we had a great third quarter, and I already gave you a little color on the fourth quarter. We're very bullish, and we're very optimistic on the fourth quarter and what 2022 is going to bring us.

Good to hear. Good to hear. So if we just compare to 2019, you talked about the pacing is up versus '19. What about live events? You talked about ticket sales in '19 was like 10 million and the sponsorship 5 million. So how are you doing this year? And how are you going to be doing next year versus 2019?

So, that's a great question. We have several events that we're rolling out. We have 2 of our signature events that we're rolling out this year, one -- they're both in December, one in New York, one in Miami. Mega Bash in New York is selling through the roof, over 11,000 tickets sold. MiamiBash the same way. Both of those shows are going to be complete sellouts. And in January, in Staples, we have a 3-night Calibash event that we've sold close to almost 30,000 tickets. It's just impressive. And then in Vegas, we're doing a Hispanic urban show that's selling at record levels and then the Mexican regional show, which is -- and that show I wanted to highlight, in particular, because of what's going on in the marketplace, things that we haven't seen, that Mexican region will show, we typically sell out by the second week of January. So we have just learned recently that we just sold out the Mexican regional show, which is like unheard of for November. So we are now back at the drawing board, okay, the demand is so great. And people are calling in saying that they want to go to the show, and we sold out the T-Mobile. You know that T-Mobile is a massive arena in Vegas. And we're considering adding another night. It's just great news. And with respect to sponsorships, the sponsorship revenue is through the roof for all of those shows. We were very, very pleased with what's going on, very, very pleased, very optimistic.

All right. Well, this year is still kind of a back-end loaded. I mean, 2022 next year, you should be even better, right?

Yes, of course. We just started doing the events really the -- our signature events. We started in this -- these are our first ones in December. And our sponsorships are at record levels. And all of the major categories are on board with telecommunications, automotive, packaged goods. They're all on board, and they know that we're going through all of the safety protocols. We know -- we have weekly updates as it relates to everything that we're doing to keep everybody that's going to be going in and out of the venues safe. And they're on board, and all of the major categories have signed for every single one of our bash events. So we are very, very optimistic about getting back into the event space and packaging all of our -- basically our 360 platforms: our audio platform, our video platform, our digital, everything, our experiential, putting it all together. And most important, connecting the Hispanic consumer with the experience, which is most exciting for us. And you see it in the results. We're growing faster than every radio revenue than any group in the nation regardless of language. And it's quarter after quarter.

Yes, it's good to see you guys are actually well over 2019, and all the competitors still 5% below. So just getting to the categories, automotive, what's the dynamic there? Because you are pretty strong in used cars, but [ sorry to say ] pretty weakness as well. How do you see that playing out?

Right. I do see an emphasis still in manufacturing, and the emphasis is in manufacturing. There is the issue with the chip, and the issue as we speak to the manufacturers will probably still linger through Q2. But the reason why we've been able to do well in the space with the Tier 1 is because of, number one, they want to get into the Hispanic space Number two, they want to invest in minority media. And number three, the cost of the brands, the manufacturing when the -- with the automotive, when they're in our space, they get incredible results. In particular, the manufacturers with the SUVs and everything, with everything going on with the EV categories, the electric vehicle category that's going to go on in the next 3 years. The only way manufacturers in this nation are going to grow, automotive manufacturers for the next 3 years is going to be with Hispanics. And we have -- we basically dominate the audio space with Hispanics. And this is coming from them. They do their research, and it's going to -- they're not going to grow with any other group than with us. And we're well positioned with the Tier 1s, with the Tier 2s, we're very creative. And look, with the Tier 3 with automotive groups, our teams are very, very creative with the local car dealerships. And they come up with the most incredible, creative campaigns, and they sell cars. The cars when they come off the ports, the cars are already sold with our teams creative because our teams are very, very creative, very savvy. And they're there in the local car dealers. And they're knocking on their doors with their creative. And if they don't like their creative and if they don't like their creative, we don't like your creative. This is what it's going to take to sell your car, and they get it sold, and they got it done.

Right. Great. Another question is regarding the TV, television segment. It's around $15 million, $16 million. And it doesn't really grow that much, but it's come out drag for management. What's your view on that segment? Are you continuing to build it? Or you have some interest in divesting it?

Look, no, we've continued to build it. And if you look at 2020, 2020 for our television platform was a very successful year. And what we decided to do this year -- what we decided to do it last year, based on such a successful year, is we decided to invest in our hardcore news. We've built up our news programming because we want to be ready for next year's election cycle. And in 2021, that's exactly what we did. We had challenges with Puerto Rican TV and film commission with the tax incentives. They've been a lot. The government has been a little delayed with the tax incentives, but we feel confident we're going to get it. We're going to get it, hopefully, if not this quarter, probably maybe in January. And that will go back for this year, and we'll get the tax incentive for this year. But for next year, the television -- our television segment is very well positioned to be at the prior year's level. We're making incredible amount of money because of the political money that's going to be in place. And we are well positioned to serve that audience because I'll tell you, we've met with both political teams, the Republicans and the Democrats. And they're going to spend heavy and hard in 2022, and we wanted to make sure that our television segment was ready for it. And we feel today, we are. And we're going to capitalize on that, and we're going to make a lot of money on that segment.

Okay. Okay. Good. One last question is regarding free cash flow. Year-to-date, it's about 0. But with this kind of a pacing, you should generate probably $15 million to $20 million free cash flow this year. So is that a fourth quarter event? Or how do you see free cash flow come in for the year?

For 2022?

So far. For 2021, for this year because year-to-date, the cash flow statement shows 0 free cash flow. Right. I think if you do $45 million EBITDA, there should be $15 million free cash flow. So that looks like a fourth quarter event. Am I reading this right?

Yes. I think the LTM now is at 40. EBITDA is at 40 now. So we're not giving forward-looking guidance. But look, again, we're definitely in the 40s and hoping to grow.

Right. But is there any seasonal factor that caused the year-to-date, the first 9 months free cash flow 0, even though you have quite a bit of EBITDA? Is there any onetime working capital event that consumed a lot of cash?

Oh, this quarter. Let me think about it. We've had a good amount of CapEx for the last 9 months. We are a cash taxpayer now, which definitely we pay -- we will be paying about $3 million, $3 million to $3.2 million this year. We'll probably end up paying about $3 million in CapEx for the year as well. There was some prepayments made for insurances. So our cash balance will probably be in the $13 million to $15 million range at the end of the year.

Right. Okay. But going forward, I mean, cash is kind of accumulating with free cash flows. Do you have any interest in buying back the bonds, either at the call price or the market price?

Look, our strategy is very simple. We will continue to build EBITDA, continue to stack cash. And with that effect, we'll be lowering our net leverage and looking to, hopefully, if the markets allow, do something as soon as practically possible. As you know, the call premium is a little pricey. We are in a transition period of the digital era. So we are looking at certain divisions of ours to ramp up, which should be very accretive to EBITDA, including, as we spoke about, the entertainment division. So we are going to reinvest in certain divisions where we think we must invest for the future of this company. In addition to that, lower leverage from building EBITDA and building cash. And looking forward to September -- I want to say September 1, 2023, just hopefully do something. That's the quickest we can call.

The next question comes from Craig Carlozzi with Longfellow.

When I look back at the performance of the business, I was curious between the periods if there's a material difference and thinking about your target of $52 million of EBITDA, which would be commendable if you can hit. But the 2018 and 2019 period, the business generated north of $50 million of EBITDA, yet CFO was between $6.5 million and $2.2 million. I was just wondering if you could provide any type of not guidance, but perhaps thoughts or comments around what you think the earnings power of the business, how that would translate into CFO. And if you believe that you would see a materially different CFO in 2022's environments based off the same level of EBITDA.

reach levels at $50 million, I think our tax -- cash taxes next year are going to be between the range of, let's say, $5 million to $7 million. CapEx will probably be between $3 million and $4 million. So I mean, you can do the numbers. Interest expense will be roughly 30 -- let's say, $30 million to $31 million or $31 million, sorry, rather. I don't want to give a number because I'll be giving guidance. But again...

Yes, okay. Okay. Okay. So what you're suggesting is there's nothing material other than kind of normal course of business?

Nothing in the forward looking -- we're not looking -- there's material that we're -- we feel comfortable where we reside. If anything, Albert -- like Albert mentioned, downsizing is a potential opportunity if it exists. If we do downsize, there could be more CapEx. So that's a decision that will be -- we continuously look at. So for now, we are in this building. Clearly, we get a pretty nice offer then we'll have to run the analysis to make sure that it's accretive to the bottom line. But no, there's nothing material. But we will be investing. Again, I will state this, we will be investing in the divisions where we believe the future is, which is digital, entertainment, also looking at markets where we don't serve or where we can serve, and it could be accretive to the bottom line.

This concludes our question-and-answer session. I would like to turn the conference back over to management for any closing remarks.

Thank you, and I want to take this opportunity to thank everybody who is on today's third quarter conference call. And I look forward to getting on and discussing fourth quarter and year-end and discussing what a great quarter that is going to be. Thank you, everyone, and have a good Thanksgiving and holiday next week. Thank you.

Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.