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

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

Thank you, Tom, 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 its 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, recapitalization costs and other operating income or expense, excluding noncash stock-based compensation or adjusted OIBDA, is useful in evaluating its performance because it reflects the 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 or 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 fourth quarter and full year 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 fourth quarter and full year 2021 conference call. On today's call, we will 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. We delivered industry-leading performance in the fourth quarter and ended another successful year for SBS on a very high note. Our audio division continues to generate strong growth, and this quarter marked our third consecutive quarter of growth compared to 2019 pre-pandemic levels. In 2021, we delivered consolidated revenue growth of 20% and adjusted OIBDA growth of 25%. Our performance was driven primarily by our audio business, where revenues and adjusted OIBDA increased by 27% and 58%, respectively. These results clearly speak to the strength of our audio stations and rapidly accelerating digital revenue streams. Today, SBS is a leading Spanish language multimedia certified minority-owned company and at a time when Latino population is rapidly expanding in size, purchasing power and being increasingly targeted by major brands. 2020 U.S. Census confirms that Hispanic grew by more than 23%, more than any other group. It also confirmed that Hispanics represent 19% of the total population. On March 10, 2022, the U.S. Census put out a public statement that it had erroneously undercounted Hispanics, Blacks and Native Americans by nearly 19 million Americans. The New York Times, Wall Street Journal, USA Today and many other publications across the country reported that 19 million Americans are not a rounding error, and the U.S. Census needs to correct this immediately. The U.S. Census undercounted nearly 5% of Hispanic and completely misclassified them. We are currently working with government officials and agencies for a correction and a restatement. SBS audio is the fastest-growing audio broadcaster in the nation. In the fourth quarter, SBS grew audio revenue higher and faster than any broadcaster in the nation. That is regardless of any general market or Hispanic broadcaster. Our unmatched leadership market position is clearly evidenced by several of our stations recently achieving top local biller status in key markets such as New York and Miami, and most recently, Los Angeles as the top biller in the entire market. In addition, we have strategically expanded our footprint with the addition of audio stations in Orlando and Tampa, further enhanced our digital capabilities and added unique and compelling content like the recent addition of the nationally syndicated Omar and Argelia show that joined our Mega 96.3 morning lineup in Los Angeles. We finished the year strong and none of the general market or Hispanic market peers have carried significant momentum into the 2022. The power of multimedia assets has never been stronger, and our strategy and strong execution is consistently delivering industry-leading growth. 2022 is going to be another incredible exciting year for SBS, and we're looking forward to keeping everyone updated on our progress. Now let's review our operations, and we'll start with the AIRE Radio Network. Fourth quarter in 2021 AIRE Radio Networks outpaced the marketplace by 30%. AIRE Network was able to widen the gap and had strong categories in this period, such categories included pharmaceuticals by 254%, government by 87%, insurance with 81%, retail 78% and QSR with 20%. AIRE continues its commitment to super serving Hispanics and asserted position as the largest minority and certified Spanish language audio network in the nation. Its core competitive advantages include 95% reach of the U.S. Hispanic market, 15 million weekly listeners across 100 markets nationwide and presence in the top 50 U.S. Hispanic markets. One of the key highlights for AIRE's initiatives includes El Terrible Morning Show, La Mezcla with Alex Sensation, the influencer network delivering campaign messaging through a national platform while penetrating local markets and [indiscernible] where the brands are aligned with Latin artists. For the full year, AIRE Radio Networks was up by 45%. Miller Kaplan reported the market was up by 11%. AIRE outperformed the marketplace by 34%. It set new record-breaking revenue numbers. This is a result of new business development, combined with the launch of culturally relevant integrated content. Turning to our audio division where we are #1 in our top markets across the nation with unrelenting rock solid rating performance and listener growth. Our deep rooted and hyperlocal super serving of the Hispanic community has driven our success. We have content and personalities that listeners just absolutely love to listen to. New York, we report again and again and again and again that we are the most potent audio combo in all of the 5 boroughs, proof of the synergy and passion of the New York team, WSKQ 97.9 FM is the #1 station in the nation and WPAT 93.1 Amor, we have the #1 and #2 stations in the city. Our genuine involvement and listener appreciation of the New York, Hispanic community has allowed us to build the unshakable listener relationship. WSKQ Mega 97.9 and WPAT 93.1 Amor are the top stations in the market regardless of language. Our online digital stream ratings in the KLAX, WSKQ Mega FM is the fastest growing and the #1 most listened to station, all of New York in any language format and all of the top demographics every quarter, year after year. We continue to innovate and open new opportunities for growth in audience and revenues. For example, we just launched a new initiative. Our programming team created a new original audio on-demand content now available on lamusica.com. Original and the best moments of our top shows across the nation are now available on lamusica.com. We are now turning to Los Angeles. We are very, very excited to announce the launch of Omar and Argelia, the morning show on KXOL Mega 96.3 FM. This is no ordinary morning show. They are a married couple with over 18 years of success. On Day 1 of the launch on their new home, our streaming numbers more than tripled in audience. The show is fun and unexpected breathtaking moments. The listeners have spread the word amongst friends and family and that Omar and Argelia are now on Mega 96.3 FM, KXOL Los Angeles. Just a few months after returning to the home, DJ Eddie One is now the #1 rated show in the afternoon, adults 18 to 34 on KXOL from 3:00 to 7:00. KLAX La Raza is the #1 Hispanic regional Mexican station in the nation and in all of Los Angeles and is home to the #1 Hispanic morning show El Terrible. His commitment to the community, providing food, wellness information and the original fun entertainment makes us the #1 morning show among all Hispanics in Los Angeles. Puerto Rico ratings have continued to explode. We have a station with #1 in each demographic WODA La Nueva 94, #1 18 to 34, Mega 106.9, #1 18 to 49, WZNT #1, Men 25 to 54. And in Miami WCMQ FM Zeta 92. 3 is at the top in the morning show with audio and video journalists Oscar Haza and it is also remains #1 weekly with adults 18 to 34 demo. WXDJ El Zol 106.7 is gearing up for our upcoming MiamiBash concert a highly anticipated event by our listeners that creates excitement in the market. WRMA Ritmo 95 is at the heart of the Cuban community and is the home of unique blend of musical sounds and artists exclusive to the station, not heard anywhere else. Ritmo 95.7 is the only station that has established a powerful connection to listeners and clients in Miami and South Florida with its continuous support of community efforts. Our overall station impressions continue to surpass the vast market. According to Miller Kaplan fourth quarter marked our 20th back-to-back quarter of outperformance as we beat our competitors by 210 basis points. Now to Mega TV, where our national footprint remains more than 21 million homes via cable and satellite broadcast partners. Our prime time content remains in an area of focus, and we are making progress driving audience growth and among critical demographic groups. Turning now to our live events division. SBS Entertainment produced and delivered 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 achieved record-breaking attendance and revenue. SBS also produced and delivered the first 3 days sold-out Calibash concert in L.A. at the STAPLES Center, January 14 through the 16. SBS Entertainment also launched the first ever Latin festival commemorative [ NFT ] celebrating the 15th anniversary of the Calibash brand. Calibash Las Vegas and [indiscernible] also saw record-breaking attendance and revenue outperforming all years. The sponsorship revenues completely broke all records in the history of the California and Las Vegas attendance. Based on the momentum and performance of the Entertainment division, the company has focused on robust calendar events for 2022, including Mexican original format concerts in markets like Chicago, San Francisco, Los Angeles. Additional markets that will be activated with events is Orlando [indiscernible] that are the company's outdoor festival events that will be produced and delivered at the end of this month. Entertainment division, followed our local state and federal guidelines with respect to COVID protocols, and we are proud to have executed all the events in a safe manner for our listeners. And we will continue to produce a safe and cutting-edge experience. Now turning to mobile and digital platforms and our 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 Hispanic 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, commitment to the Latino community across the U.S. As such, we can deliver compelling and integrated advertising opportunities across all major media platforms and offer access to coveted demographic groups. As I stated, our aggregate audience continues to grow. As of December 31, our total audience was up 16% compared to the prior year. Our LaMusica platform reaches over 1.6 million people, who combine over 17 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 in identifying new digital revenue streams as well as increasing our CPMs on the existing digital offerings. During the fourth quarter, our total streaming audience surpassed 1.6 million unique listeners per month. This audience delivered over 49 million listening hours and over 42 million total sessions in the quarter, given Hispanics heavily over index 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 fourth quarter, LaMusica had a record of 480 audio ad impressions, in addition to 130 million display impressions and 89 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 playlists with products with an average time spent listening of over 45 minutes in the most popular categories. In summary, fourth quarter was a terrific end to another year of strong execution and consistent industry-leading growth across all areas of our business, audio stations, AIRE MegaTV and all of our digital platforms. We have grown our audience share, strengthened our content and expanded our revenue streams. Today, we offer more touch points with the Latino consumer than ever before, including across the most coveted demographics. We are connecting brands with a rapidly expanding Latino audience in more creative and dynamic way than anyone else in the industry. We entered 2022 with momentum, a multimedia strategy that is working and an incredible team. We expect 2022 will be another highly successful year for SBS. 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 fourth quarter results. Our consolidated revenues totaled $46 million compared to $40.2 million for the same prior year period, resulting in an increase of $5.8 million or 14%. Excluding political sales, a non-GAAP measure, our consolidated revenues totaled $45.3 million compared to $36.1 million for the same prior year period, resulting in an increase of $9.2 million or 26%. Our radio revenues totaled $42.2 million, increasing $8.2 million or 24%. This growth was primarily due to increases in local network and digital revenue streams, which continue to improve sequentially quarter-over-quarter in 2021. Radio revenues, excluding political sales, totaled $41.7 million compared to $31.2 million for the same prior year period, resulting in an increase of $10.5 million or 34%. Additionally, our radio revenues exceeded the same pre-pandemic period in 2019 by $1.3 million or 3%. Our television revenues decreased approximately $2.4 million or 39% due to lower local and national revenues, primarily due to a decrease in political sales. Excluding political sales, our television revenues totaled $3.6 million compared to $4.9 million for the same prior year period, resulting in a decrease of $1.3 million. Our consolidated adjusted OIBDA, a non-GAAP measure, totaled $18.6 million compared to $16.3 million for the same prior year period, representing an increase of $2.3 million or 14%. Excluding the effects of political sales, our consolidated adjusted OIBDA totaled $18 million compared to $12.6 million, resulting in an increase of $5.4 million or 43%. Our radio adjusted OIBDA increased $8.3 million or 54%, primarily due to the revenue growth of $8.2 million and lower operating expenses. Our radio station operating expenses decreased mainly due to decreases in compensation and benefits related to the employee retention credit, the allowance for doubtful accounts and special event expenses, partially offset by increases in local commissions, barter expense, music license fees, rating services and professional fees. Excluding the effects of political sales, our radio adjusted OIBDA totaled $23.3 million compared to $13 million for the same prior year period, resulting in an increase of $10.3 million or 80%. Additionally, our radio adjusted OIBDA exceeded the same pre-pandemic period in 2019 by $2.5 million or 12%. Our television adjusted OIBDA decreased $2.1 million due to lower revenues, partially offset by a decrease in operating expenses of approximately $300,000. Our television station operating expenses decreased due to decreases in compensation and benefits related to the employee retention credit and the allowance for doubtful accounts, partially offset by the lack of production tax credits in 2021, which has increased our net production costs compared to the same prior year period. Excluding the effects of political sales, our television adjusted OIBDA decreased $1.1 million compared to the same prior year period. Corporate expenses increased $3.9 million, primarily due to increases in compensation and benefits and outside services, offset by a decrease in directors and officers insurance. Operating income totaled $17.7 million compared to $13.6 million for the same prior year period, representing an increase of $4.1 million or 30%. Capital expenditures during the fourth quarter were approximately $752,000. As of yesterday, we had cash on hand of approximately $20 million. In addition, we have an undrawn $15 million revolver fully available if needed. As disclosed earlier this year, we entered into an asset purchase agreement to acquire 2 FM radio stations located in the Orlando and Tampa area for a purchase price of $12.25 million. We have already made a deposit of $1.25 million and the balance will be due at close. This transaction is expected to close in the beginning half of the second quarter. We will be using cash on hand to acquire these stations. We believe that these stations and the markets they serve are strategic due to their growing Hispanic population and that these stations are going to be accretive to our operating performance. 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 Patrick Wang with Voya Investment.

A few questions. The recent spike in high gas prices, has it affected your listenership, demographics in the cities?

It has not affected our listenership whatsoever.

Is there a way you can tell from the ratings and...

There's really no -- respectfully, there's no correlation that with higher gas prices, people are going to listen less to our content. It would be the reverse. People would want to be more in tune to what's going on in the nation with the economy, maybe with gas prices maybe going up a little bit. They'd want to -- because our DJs, our influencers are trusted mentors to millions of Hispanic across the nations, and these mentors, our DJs, our influencers are carefully giving them what's going on in the news. So they're going to listen to them more.

Right. Well, what I'm getting at is the reduced miles driven that people just don't drive as much because gas is $6 a gallon. You don't see that as a -- okay.

We're not seeing any correlation of that whatsoever. And to the contrary, our ratings are going to continue to be very, very strong. And with the electronic measurement, we have not seen a dip in ratings or even really at least the listeners having an adverse effect.

Albert, a question for you on TV. It's been loss making for the past year and the revenue decline and also negative EBITDA margin. As I recall, even in '17 and '19, those EBITDA margins are around 20%. So what's causing the negative EBITDA margin? And also what's your future plan for TV? What's the current status of subscriber base? And I know you don't have any [indiscernible] issues, but what's driving that recovery for TV or lack thereof?

Look, for obvious reasons, television broadcasters are feeling the impact with streaming -- a lot of viewership has gone to the streaming. The other thing that impacted our operations was the fact of the tax incentive in Puerto Rico in terms of us producing and getting the Puerto Rican government to give, the local broadcasters there, the incentive. Now we are working with the local government in Puerto Rico, and we are working and my understanding is, they are working on changing legislation back to where it was or close to where it was. So look, we're hopeful for that, but I do think my opinion is that TV will be in the positive for this year. There's been a lot of activity. There's going to be a midterm election. It's going to keep television very, very busy. So I'm hopeful in that sense.

So the ending subscriber for TV still around 3 million for Hispanic households?

We couldn't hear your question. Sorry, Patrick. Can you repeat that?

What's the latest subscriber count for the TV subscribers?

Well, for our -- with our subscriber base, it's come down about 10% to 20%. And it fluctuates month by month. Right now, it's about 3 million roughly.

Okay. So again, this leads to political because I think political will be important for TV, definitely for radio. What's the total expectation for a midterm election? In the past, we talked about 15 million for political, Florida being a swing state. So what's the latest thoughts on the political for TV and radio?

Yes. For TV and radio and digital is going to be a big target. And it's not just going to be for Florida. It's going to be for all of the battleground states in the nation, including Georgia, Pennsylvania, Michigan because of our audio listenership. We will get political [ bias ] across the nation, including Arizona plus all of our owned and operated. So the target is still close to anywhere from 12 million to 15 million. We're very optimistic it's going to be a very busy political season because of obviously the 3 -- the 2 branches of government, the House of Representatives and the Senate are so close, and that's just going to mean that, that's a great opportunity for broadcasters and for the reach that we have.

Right. So you're thinking 12 million to 15 million?

Right.

And last question regarding the 2 stations you acquired in Florida. Can you disclose the EBITDA at the station level, EBITDA cash flow? Was it on par with your existing margins?

We didn't buy it based on multiple. We bought a stick, and we're converting the format. So it is an actual start-up station, if you will.

So would there be any cost to ramp it up to your format?

Yes. There'll be some CapEx to it. There will be some marketing behind it. It'll probably be a couple of months or maybe a month of non-commercial just to get the ratings up. But yes. But we do believe in the short amount of time, it will be accretive and the purchase price is a very attractive purchase price, and we think that we can do very well in these 2 markets, which are very big Hispanic population and ...

Look, based on the market size, Orlando for Hispanic is ranked #14. Tampa's ranked 18. Tampa, as everyone knows, Tampa is one of the largest national test markets in the nation. So we're going to do very well in both of those markets.

The next question comes from Tim Daggett with RBC.

Here we are in mid-April, can you talk a little bit about the trends that you saw in the first quarter from both the radio and the TV side?

Trends are very strong. We are up locally. National, it's going to be flat to off a little bit. There was -- we're going up against some comps from last year and networks is plus 30% to 40%. It's -- but overall, we're going to have an incredible quarter to report. We can't wait to report it.

I know last quarter, we talked about maybe being on track for getting over $50 million of EBITDA this year. Does that still seem like a reasonable goal to get that over $50 million and to get leverage back down below 6x?

That is the target. And I have no doubt we'll be able to achieve that.

And then I think you talked before about the bonds being callable in September of '23, is that still the goal potentially to be able to take those out on that first call date in September of '23?

It's not really the goal. I mean it's an option, and we'll evaluate at that time. Our goal now is just to build -- increase EBITDA and delever based on building cash on the balance sheet. And at that moment, we'll make a decision.

And on the Events business, what should we expect for 2022? Can that generate cash, do you think, this year?

We've started off the first quarter very strong, and we have a very robust calendar of events for the rest of the year and for 2023. And like I mentioned in my comments before, it's been -- January was record-breaking, in the sense record-breaking 4, 5 nights in terms of attendance record-breaking with respect to sponsorships. We've never done anywhere near the sponsorships that our Los Angeles team did. Very proud of our Rachel Elster in Los Angeles, who did a remarkable job. Not only did she do a remarkable job, she broke the record of the entire SBS company in the history. So we're very proud of what that Los Angeles team has done. And right now, that Los Angeles team is the #1 biller in the entire market. So you can imagine how happy we are. And I want to clarify, not #1 Hispanic biller, #1 total market biller for our station Mega over every single general market and Hispanic broadcast and no one even comes close.

And then on liquidity, I think you said there was $20 million of cash on hand yesterday, and I guess there's $15 million available on the revolver. That is, obviously, after paying the coupon and you owe how much left on the station that's to be acquired is like another $11 million, is that the right way to think about it?

Yes, $11.25 million.

And then maybe last question for me. What was the share count at the end of -- or the most -- the latest share count?

8.1 off the top of my head, give me a second. 8.1 and then after the PDR is issued, it will get to 9.3.

I think last quarter, you said it was 9.7, but now the real number, like the diluted number is 9.3, is that the right number to use?

Yes, 9.3.

The next question comes from [ Umesh Bandari ] with Legal & General.

Maybe just -- maybe the first a simpler one. What is the earnings potential when those 2 stations have fully ramped? What kind of EBITDA contribution do you expect from those [ 3 ] stations that you're acquiring?

I would say between $2 million and $5 million combined. But as the market -- I mean these are growing markets. So...

I would say that would be short term because of the population growth in I-4 corridor with respect to Orlando and Tampa, but that would be short term. And if you follow the trade and we look at this company, Spanish Broadcasting in most of the markets that we're in and known and operated, we are the #1 billers. I've already told our creative team to start working on ads for both Tampa and Orlando because I expect that we're going to be #1 in ratings and then #1 in billings. So I've already told them to start working and mocking up designs for us to review and approve those.

Maybe one sort of big picture question. I mean you guys had a great 2021. It looks like you're going to have probably another great 2022, especially with the political and all. But even with all that said, it sounds like we are sort of aiming for $50 million of EBITDA in 2022 on a good sort of political year and that means you'll be still north of 6x levered. So I guess my question is, how do we sort of create shareholder value here? It seems like obviously the most obvious way to create shareholder value will be, if you can delever it to below 4x. But on our guided basis, given the limited free cash flow, even the solid EBITDA numbers that you're posting, I just don't see how you can sort of delever it 4x. Maybe are there other sort of -- I mean organically to delever here? Or how should we sort of think about that?

Look, I think I'll let [ Jose ] answer your question while [indiscernible]. I think, number one, the best way to bring shareholder value is for the performance of the company. The company has performed better than every other radio broadcaster in the nation. I'll give you an example. In terms of with respect to radio, our radio revenue growth was in the mid-20s. The only other broadcaster in the nation that was even close to us was iHeart with 9% growth. Everyone else was way below the mark. Most of them were flat. No one in the country was close to us with respect to radio growth. In terms of OIBDA growth, quarter-over-quarter, we were in the mid-50s. So I believe, firmly, the way to bring value is -- to bring value to the shareholders is based on performance. And after we do that, and we continue to do that, as a minority certified broadcaster, okay? We are on every single major avail in the country. And we're going to continue to grow faster than every other broadcaster. So I'll let Jose answer -- did you want to answer anything else?

I'll just -- I would say, yes. Organically, is probably the best way to look at it. Clearly, our digital division is up and coming, and we're making the right investments to build out our digital capabilities. Network is another. For all intent and purposes, our network division has only been around for 7 to 8 years. That's growing leaps and bounds. In addition to that, we acquired these 2 stations in markets, up-and-coming markets, leveraging the content and being here in Miami, I think those stations will do extremely well. National with our new deal with Katz, we feel pretty bullish on that. Political seems like it's more constant now than it used to be before. Now we're starting to see a lot more money year-over-year. Even in nonpolitical years, you're starting to see some money. So I would say organically, the future looks bright. It really does.

You guys are performing very well. I mean I was just talking more about like I think just given the leverage level, the amount of interest cost, interest burden and some of the business, is it really -- I mean, I guess, when you put pencil to a paper, you see as I'm not saying the next year that put any kind of time line, but do you see EBITDA sort of trending above $60 million because that's really the kind of the only way you can get this leverage to a manageable level that can actually result in some shareholder value creation because if you look at the equity right now, $20 million, $25 million of equity value. That just feels like purely awesome value at this point. So how do you sort of create real equity value below the debt?

Look, it sounds like we're on our way. We're certainly on our way. We're growing revenue faster than every broadcaster in the nation. We're bringing value with everything that we are doing strategically. We are making absolutely the right moves going into markets like Tampa and Orlando that rank 14 -- Orlando's ranked #14 with Hispanics and Tampa 18. And with the management team that we have in place that has been proven again and again with results, we're definitely on our way to increase the shareholder value.

Our goal Umesh is just basically building better bill cash and then sometime down the line, look at our balance sheet.

The next question comes from Craig Carlozzi with Longfellow.

A couple of quick things, the TV business. Given your potential view of streaming and the growth of streaming that you're seeing and your industry is seeing, generally speaking, is the TV business still core? Or is that something that you have or would consider possibly divesting?

Look, 95 -- 90-something percent of our overall business and profitability is on radio. But TV, obviously, in terms of our platform is important. Now if an opportunity would arise, that's something that the company could look at and consider, but it would have to be, obviously, the right decision or the right move. But our platform is growing exponentially right now, and we're trying to keep up with the demand overall with our platforms, with audio, with digital. And we just created an app for TV which is going to help our streaming platforms. So I do believe the combination of all of our assets together are going to continue to grow for some time. And look, a testament to that is the 2020 Census. And I mentioned in my comments before, we're working with a group of Census. They clearly underreported it by 19 million, 5% of that was the Hispanic population, 3% was the African-American. We're not happy about it, and we are pressing all the local government officials to do the right thing and correct that.

And with respect to -- it was nice to see CFO minus CFI and real free cash flow generation in 2021, it looks to be the highest we've seen in quite some time. The last period in 2018 and 2019 when you were generating north of $50 million of EBITDA, which is your target, the CFO minus CFI was quite muted for both periods. Do you expect 2022 to have a cash flow -- a true free cash flow generation materially higher, commensurately higher with 2021 given the EBITDA growth? Or are there other onetime items excluding acquisitions?

I'll give you the inputs and then you put them through your model here. I would say CapEx, let's say roughly it's like $4 million, I think, in 2022, let's say, in the $4 million range. Cash taxes will probably be between $8 million this year. So that's really -- cash taxes is really the delta between the prior years where we weren't a significant cash taxpayer, those are the major ones. And then basically interest clearly is roughly 30 and change. So assuming we're at 50, clearly, there's a good amount of free cash flow that should spit out.

Okay. So no other restructuring or any other onetime things then. Okay. I appreciate that.

The next question comes from Matthew Sandschafer with Mesirow.

I just wanted to ask, there were a couple of add-backs related to PPT and other actions that were -- other government activities that were used as offsets to the cost lines in the fourth quarter. I know there were some expenses relating to getting the events business back up and running. Can you just provide some sort of outlook for at least the first quarter, if not the full year, on what the SG&A and corporate and the engineering lines look like, OpEx lines will look like in '22?

Yes. I'll give you some general ranges. I won't get too specific on that. As you -- so I would say Q1, let's say, total expenses, you're probably going to be in the high $20 million range, and that's an all-in number. And just make note clearly, we had 5 events in Q1. So that drives cost up.

And is the number adjusted for the seasonality of those events, is that sort of a sustainable number? Or are there items in there, either unusually -- unusual expenses or unusual credits? Are you giving people raises, things like that, I should be thinking about as the year goes on?

Look, I think inflation is real. I think we're in a tight labor market now. So that definitely holds true. I think just in general, we are in a growth mode type, and there's a lot of opportunity for us. So we're definitely attacking everything that comes our way. In addition to that, we're building out our digital capabilities now, which we should -- it's pretty much a real investment type of year for us from a digital standpoint. Network standpoint, we just hired a very talented Morning Show in Los Angeles, which will be syndicated as well. So yes, look, we're making, I would say, prudent investments in the business, which, yes, you are going to see a tick up in expenses, but you're also going to see a tick up in revenues as well. For the long term, really, these investments are being made.

Your next question comes again from Patrick Wang with Voya Investment.

Just a quick follow-up, since you were talking about taxes. You're projecting $8 million this year. I'm surprised to see that tax is picking up quite dramatically because you're not really a cash tax payer in the prior years, and we have NOL last time I recall $260 million. So what's the calculation here that you have to pay that much taxes?

Yes. So with the restructuring, we had a Section 382, which limits the NOLs going forward. So yes, look, I think this year it's going to be $8 million and as we grow the business, it will continue to go up. I think I've calculated all the way up to basically $14 million in the outer years, but, again, that's subject to performance really. But we are a cash taxpayer going forward.

Okay. So you don't have any NOL left after the...

We do, Patrick. We have approximately $5 million for the next 5 years each year. So that's shielding about $1 million in taxes, but we are -- the tax reform limits the interest expense deduction, and that's really what's driving this in addition to a Section 382, the limitation on the NOLs.

Okay. So for the tax, deductions were captured in the tax calculation, so it's not 100% fully deductible?

Correct.

And you think that's just $8 million ramping up to $14 million, that's like staircase for the next 5 years?

I would say so. And again, that's just based on projections of models with income going up as well, right? .

Yes. Of course.

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

I wanted to thank everyone for participating in today's fourth quarter year-end earnings call, and I'm very excited to discuss our first quarter earnings. I can't wait to get on the phone with you guys again so we can discuss our incredible results. Have a great day. Thank you.

Thank you.

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