Earnings Call Transcript - SSP Q2 2025

Operator, Operator

Good day, and thank you for standing by. Welcome to the Second Quarter 2025 E.W. Scripps Company Earnings Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Carolyn Micheli, Head of Investor Relations. Please go ahead.

Carolyn Pione Micheli, Head of Investor Relations

Thank you, Dede. Good morning, everyone, and thank you for joining us for a discussion of the E.W. Scripps Company's financial results and business strategies. You can visit scripps.com for more information and a link to the replay of this call. A reminder that our conference call and webcast include forward-looking statements based on management's current outlook, and actual results may differ materially. Factors that may cause them to differ are outlined in our SEC filings. We do not intend to update any forward-looking statements we make today. Included on this call will be a discussion of certain non-GAAP financial measures that are provided as supplements to assist management and the public in their analysis and valuation of the company. These metrics are not formulated in accordance with GAAP and are not meant to replace GAAP financial measures and may differ from other companies' uses or formulations. Reconciliations of these measures are included in our earnings release. We'll hear this morning from Chief Financial Officer, Jason Combs; and then Scripps' President and CEO, Adam Symson. Here's Jason.

Jason P. Combs, Chief Financial Officer

Good morning, everyone, and thank you for joining us. This Wednesday, we closed on the placement of $750 million of new senior secured second-lien notes. We have now used the proceeds of this offering to pay off the company's outstanding senior notes that were set to mature in 2027, prepay a portion of our Term Loan B-2 that is due in 2028, and pay off a portion of our revolving credit facilities, leaving $36 million remaining. We plan to pay off all or most of that by the end of Q3. The new notes, which mature in 2030 carry an interest rate of 9 7/8%. We expect to pay off the remaining reduced 2028 term loan balance through cash flow, leaving us no other bond or term loan financings to address until our 2029 senior notes. We are pleased with the positive reception to our improved financial condition by the credit markets, which allowed us to move quickly on this transaction at an upsized amount in a new money deal and at favorable rates. This refinancing follows the completion of our other refinancing transactions in April. At that time, we extended our 2026 and 2028 term loans to 2028 and 2029, and extended a portion of our credit facility to July of 2027. We also introduced an accounts receivable securitization facility into our capital structure. It has a capacity of $450 million. Between these two transactions, we have now retired or extended the maturity of up to $1.7 billion. That's more than 60% of our current total debt. And despite the elevated rate environment, these transactions have only increased our cost of capital by just over 1%. We remain focused on using cash flow to reduce the amount of our debt with debt and leverage reduction as our highest capital allocation priority. Now I'd like to turn to a discussion of our second quarter financial results and third quarter guidance. During the second quarter, our Local Media division was impacted by the lack of political advertising revenue in this off-election year. Revenue declined 8% from the prior year quarter. Nevertheless, we did deliver core advertising revenue that outperformed our peer results, and we attribute our better performance to both our local sports rights deals and the NBA Finals. The Finals aired across our ABC footprint, including our Indianapolis station, which benefited from the Pacers' strong run. In addition, two of the NHL teams with whom we have full season rights deals made the playoffs, the Vegas Golden Knights and the Florida Panthers. The NBA and NHL playoffs brought in more than $7 million, helping to offset challenges in a soft core advertising marketplace and reinforcing the value of our Scripps Sports strategy. Outside of sports, retail was up 5%. Our largest category, services, as well as home improvement were flat, and automotive remains weak. Local Media distribution revenue was down 1% from the year-ago quarter. We renewed 25% of our legacy pay TV households at the end of the first quarter. In this difficult economic climate, we continue to closely control expenses in the Local Media division and had less than a 1% increase from the prior year quarter. If you back out the cost of our local sports rights, Local Media expenses were flat year-over-year. Local Media segment profit was nearly $56 million compared to $88 million in Q2 of 2024, an election year. Also, at the end of the second quarter, we renewed our affiliation agreement for our four Fox stations. For the third quarter, we expect Local Media division revenue to be down in the mid- to high 20% range, including core revenue of about flat. We expect Local Media expenses to be down in the low to mid-single-digit percent range. Now let's review the highlights for the Scripps Networks division second quarter results and third quarter guidance. In the second quarter, Scripps Networks revenue was $206 million, down 1.4% from the year-ago quarter. Along with other companies in the national networks business, we dealt with economic uncertainty, and yet we look to have delivered significantly better results than others. We saw robust spending on our connected TV and streaming networks. CTV revenue for the quarter was up 57%. As I mentioned last quarter, the ION network is the largest contributor to our streaming revenue and the WNBA and NWSL are certainly helping to drive this growth. Game inventory for both leagues has been commanding premium advertising revenue rates. We closely managed the division's expenses in the quarter, bringing them down more than 12% to $150 million to offset the revenue performance. Scripps Networks segment profit was $56 million, and segment margin was 27%, a 9-point lift from 18% in Q2 of 2024. For the first half of 2025, the division has delivered a 30% margin. In the middle of last year, we began significant expense reductions in the Networks division in order to deliver higher margins, and we'll begin to cycle past those savings in the third quarter. So we expect a bit more moderate year-over-year decreases in expense in the back half of this year. For the third quarter, we expect Scripps Networks division revenue to be down low single digits and for Networks expenses to be down in the mid-single-digit range. Turning to the segment labeled other. In the second quarter, we reported a loss of $7 million compared to a loss of $9.2 million in the year-ago period. Shared services and corporate expenses were $21.8 million. For the third quarter, we expect that line to be about $22 million. I have a few updates to some full-year guidance numbers that all show improvement over our previous guidance. We now expect our cash interest paid to be between $170 million and $175 million, we expect CapEx to be $45 million to $50 million, and we expect cash taxes paid to be $5 million to $10 million. All of these adjustments will drive incremental cash flow this year. Second quarter earnings per share were a loss of $0.59. The quarter included $38 million of financing transaction costs, a $31 million gain on the sale of our West Palm Beach, Florida station building, a $5.6 million write-off of deferred financing costs, and a $3 million loss on extinguishment of debt. Those items increased the loss by $0.13 per share. In addition, the preferred stock dividend has a negative impact on earnings per share even when we don't pay it. This quarter, it reduced EPS by $0.18. At June 30, cash and cash equivalents totaled $31.7 million. Net leverage at the end of Q2 was 4.4x, a half turn below the end of Q1. And now here's Adam.

Adam P. Symson, President and CEO

Thanks, Jason, and good morning, everybody. Thank you for joining us. It's been a very active few months at Scripps since our last earnings call. We announced the broadcast industry's first station swap transaction. We signed another multiyear agreement with the wildly popular WNBA. Scripps Sports added a fourth NHL team with a full-season agreement in one of our largest markets, Tampa. We renewed our station affiliation agreements with Fox. Just this week, we closed a smooth and successful new money refinancing that addresses all of our near-term debt. And we delivered a very solid financial performance for the second quarter in the face of a soft advertising climate. That included 900 basis points of Scripps Networks margin improvement. All of these successes illustrate the management team's approach to running this company, executing a plan for improving its financial performance and balance sheet health while at the same time, charting new paths for growth. The results should be evident to investors as we have significantly reduced our debt leverage ratio, down more than 1.5 turns from Q2 a year ago, including debt paydown with more planned. The two major refinancing transactions this year have taken care of all of our major short-term maturities. As Jason mentioned, we expect to pay off the remaining portion of our 2028 term loan before it comes due with cash flow from operations. I bring this up again because over the course of the last 6 months, as we have done what we said we would do, the credit markets have responded, paving the way for the refinancing transaction we just closed. The work we are doing is focused on creating shareholder value and supporting economic growth. We are already seizing upon anticipated industry deregulation to execute on our vision for portfolio optimization, announcing a swap transaction with Gray, the first so far for the industry that will make us financially stronger. Scripps will be able to go deeper in its local coverage with three new duopolies in the Mountain West region. The improved economics will allow us to grow our commitment to quality news gathering and other local programming like sports for the communities we serve. This proposal is now in front of federal regulators, and we believe it will move to closing by year-end. In the meantime, we expect to pursue more opportunities to improve the durability and profitability of our portfolio, opportunities we believe drive economic growth and support accelerated debt paydown. We were heartened by the Eighth Circuit's opinion opening the door to more sustainable station ownership rules and FCC Chairman Carr's letter welcoming the court's ruling. Changes in broadcast industry ownership regulations are long overdue in the fragmented media ecosystem and necessary for localism to thrive. We continue to grow the value of our distribution network. While cord-cutting has been a headwind, Scripps continues to see headroom on household rates based on the deals we've closed this year. Between that and a downward trend on the fees we pay to the Big 4 networks, I predict we will see net retrans margin expansion ahead. Our Scripps Sports strategy has opened up new opportunity that connects our television brands with audiences around the live events that bring them joy. This strategy is very clearly bolstering local core and Scripps Networks advertising revenue. As Jason recounted, we saw this play out in the second quarter Local Media core advertising results. On the Networks side, the WNBA and the NWSL are commanding premium ad rates for their franchise nights on ION. At the same time, we are working through our upfront sales right now, and both leagues are highly attractive to those advertisers. It's too early to report on results, but one thing is clear, sports is bringing new advertisers to our platform and will once again be a driver that differentiates our performance. Last quarter, we were very pleased to sign a new multiyear agreement with the WNBA. Our partnership is a testament to ION's truly unique distribution value proposition, our license and ability to distribute everywhere: across free over-the-air television, cable, satellite, and connected TV streaming services. In the Networks division, we are seizing upon the streaming opportunity and capturing strong growth in our connected TV advertising revenue, up 57% in the second quarter and 42% in the first quarter. Our networks programming has proven to be durably popular with audiences, especially on streaming. Hours of viewing for our networks on streaming platforms were up 40% in the quarter and made up about 15% of total viewing. The impressive growth of CTV viewership and revenue is a testament to our strategies there: sports on ION, which is unique in the FAST marketplace and our ability to target fewer demographic segments with networks such as Bounce and Grit. These networks allow us to reach people our local broadcast and cable peers can't. This is helping us to drive meaningful enterprise growth. The management team is well into executing the plan we have been discussing with you for several years to improve this company's financial performance and operating profile. We're pleased with our progress, though we know there's still much work to be done as we position ourselves for what will come next. You can be assured that we're getting after it. Dede, we're now ready for questions.

Operator, Operator

And our first question comes from Dan Kurnos of The Benchmark Company.

Daniel Louis Kurnos, Analyst

Adam, I'll start with you. Obviously, a lot of movement on the dereg side. Appreciate that you and Gray kind of took first steps to put something in front of Carr. I know investors are anxious to see more, and we keep hearing everybody is talking to everybody. So to the extent that you can kind of share how much runway, how you're thinking about what comes next, what you're targeting would be super helpful. And then I have a follow-up for Jason.

Adam P. Symson, President and CEO

Sure. Thanks, Dan. So obviously, we've talked for a while that we believe greater depth, in particular, in the market is necessary for our assets to perform their very best and continue to be in service for the communities where we operate, just from a journalism, local programming and local sports perspective. So I'd expect we're going to do everything in our power to take advantage of this moment. The greatest opportunities for us will be with swaps and select asset sales so that we can improve the performance and durability of our portfolio, our operating profile and potentially accelerate debt paydown. We continue to work on discussions with our peers to optimize both groups' portfolios to improve the performance of the stations. And we think those opportunities will continue to be available to us, especially as a result of the change in attitude at the FCC that we spoke about earlier. I think you're seeing that reflected in the comments of my peers. This is just absolutely critical to our ability to continue to invest in localism and objective journalism in live sports. I think it's just going to take a little bit of time. On the national cap front, the FCC is right now in the middle of receiving comments on the record refresh. And by the end of August, that will be pretty much complete. And then the FCC will take it under advisement and make a decision likely by year-end. And we're fairly optimistic that, that's going to be a significant change in the national scale rules. On the Big 4 rule, in late July, the Eighth Circuit struck down the FCC's rule that prohibited the same company like Scripps from owning more than one Big 4, and Chairman Carr's press release statement following that ruling was really supportive of the decision. The court's ruling isn't actually effective until late October because the court is giving the FCC time to provide any additional information it needs to in the event they want to fight the decision. But I'd say based on Carr's reaction in his letter, it doesn't seem likely that the FCC will challenge the ruling. So we're really just waiting until October 21 for that rule to go away. Despite all that, I mean, just an update on the process with Gray, we're going through the waiver process at the FCC and the normal course of business with the DOJ. So despite those dates that I shared, it's quite possible that our deal clears regulatory hurdle even before that October date on the basis of waivers.

Daniel Louis Kurnos, Analyst

Got it. That was very helpful and comprehensive. I appreciate that, Adam. And then, Jason, can you just unpack the Q3 guide a little bit? I thought you said core was flattish. So I know we're seeing a little bit of funkiness in the distribution or retrans line. So I'm just trying to understand how you're thinking about political contribution in Q3. It's probably de minimis. And then just anything that might be going on to kind of get to your guidance for Q3?

Jason P. Combs, Chief Financial Officer

From a political perspective, this year is expected to resemble previous odd years, with projections around mid-$20 million. We anticipate an increase throughout the year, predominantly in Q4. Currently, we're seeing about $3 million in Q1 and Q2, and I expect Q3 to show a slight increase. Distribution is expected to remain steady, having been approximately down 1% and near flat in Q2, and I foresee similar results in Q3. Regarding the core, we are guiding for stability. While retail and services have remained relatively consistent, we have observed a slow start this quarter in some other key categories due to economic uncertainty and market hesitancy. However, we expect a gradual improvement as we approach September, where a more significant increase linked to political activities may occur. Last year, we had one of the strongest positions in the industry for political, and September is typically when the impact of that factor begins to re-emerge.

Operator, Operator

And our next question comes from Michael Kupinski of NOBLE Capital Markets.

Michael A. Kupinski, Analyst

I just kind of want to follow up on the core advertising question. I know that, obviously, against the backdrop of last year where core was down significantly, you kind of would hope that there would be a little bit bigger of a bounce in core. I was just wondering if you can just kind of go back and give us a little bit more of a sense of the current advertising environment and maybe just the tone of what you're hearing from advertisers and if you're just seeing a little bit of hesitancy. It's kind of good that we're seeing improvement as we go into September. But I was just wondering if you can just kind of give us a sense of what the advertisers are feeling or hearing and if you think that there's like maybe a little bit of pent-up demand as we kind of go into Q4?

Jason P. Combs, Chief Financial Officer

So maybe I'll start by kind of looking back at Q2 core a little bit and just reiterating what we did there. We came in down 2% versus the prior year, that's sort of best-in-class from what I've seen across the industry and certainly as it ties directly back to our sports strategy, both our acquired sports strategy, where we saw a nice lift from the NHL playoffs for two of our teams that had first round series that we aired as well as the NBA Finals, where I think we've continued to work to better monetize those assets. And I think as you look forward to Q3, that's another thing where I think maybe sets our guide a little bit apart. And so optimism around our ability to monetize football as it starts to roll back in here. Generally though, I would say outside of sports, there is a lot of hesitancy that's out there. And automotive certainly is the place where we see the most significant amount of weakness. It was our weakest category in Q2 and has gotten off to kind of a slow start in Q3. I do think there was some pull forward in auto demand when the tariffs were announced. And frankly, there wasn't much of a reason for them to advertise because people were trying to get out ahead of the tariffs. I think we're hoping as the year progresses, we see that start to rebound some. But right now, I think hesitancy is the right word to kind of throw out there for advertisers.

Michael A. Kupinski, Analyst

Do you get the sense that people are kind of just waiting to see if we get the rate reductions from the Fed? I mean I was just wondering if that's kind of a little bit of what we're seeing as well as we kind of look into the September time frame.

Adam P. Symson, President and CEO

Yes. I believe that whether we are discussing the largest or smallest advertisers, uncertainty is detrimental. The ongoing unpredictability in the market from month to month, including tariff and interest rate uncertainties, as well as recent job data, contributes to this climate of uncertainty. In such situations, businesses tend to hold back on non-fixed expenses, and advertising often finds itself on the chopping block, particularly when there is uncertainty regarding product supply, especially if it involves overseas sourcing. Once we move past this uncertainty, I am optimistic that advertisers will re-enter the market to stimulate demand for their businesses, potentially leading to a stronger fourth quarter next year. However, we won't truly know until the uncertainty is resolved. This period of uncertainty has lasted longer than expected, making it challenging to predict month-to-month developments in the macro environment.

Michael A. Kupinski, Analyst

Got you, Adam. And I have one quick question for you. I was wondering if you can talk a little bit about the impact that we're seeing in terms of the decline in search traffic referrals and what that might have on your business? Do you think it might be a net positive? Could there be a benefit to legacy mediums from the potential lower eyeballs to site, maybe less efficient digital marketing? And then, I guess, do you have strategies to limit information crawls on your new sites? I mean I was just wondering if you have strategies in place to maybe kind of limit the use of AI and chatbot-type situations where people are just asking their Alexa for information.

Adam P. Symson, President and CEO

Sure, let me start with the second part of your question. We use various technical solutions to protect our intellectual property and prevent chatbots from scraping our websites. Regarding the effects on direct traffic and brand building, I think the outcome will be mixed. I don't believe that integrating AI into core search will ultimately benefit publishers. It seems to be changing how people look for and obtain their answers, and I wouldn't expect consumers to suddenly shift their habits and significantly increase their direct visits to our digital products. However, I do think this situation favors other advertising channels that focus more on brand building rather than lead generation. If consumers become accustomed to getting answers on the first page of AI results, it may limit our monetization from search traffic. Advertisers are likely to realize the importance of positioning their brands through other channels. This is a major reason we are concentrating on the value of our video advertising, both in the connected TV marketplace for our networks and with local advertisers. So, while it will be somewhat mixed, I can say that display advertising remains very stable for us, although it represents a relatively small portion of our overall revenue in light of the billions we generate company-wide.

Operator, Operator

And our next question comes from Craig Huber of Huber Research Partners.

Craig Anthony Huber, Analyst

A couple of questions, if I could. Curious, Jason or Adam, can you just comment on what are your thoughts here about the CBS non-renewal in the Atlanta market recently here? The Gray Media owned it, as you know, and stuff. I mean do you think this is more of a one-off thing? Or do you think the industry might start seeing more of this where the network pulls back certain stations out there if it lines up from their perspective?

Adam P. Symson, President and CEO

I think it's more of a one-off, and you'd have to ask the folks at Gray exactly what went down there. But I do think we have come to a place between the networks and the affiliates that there's an understanding that the value that they provide us has changed. And so in that way, the expense that we're going to send their way is going to be going down. And so at some point, maybe for CBS, that became a cost-benefit analysis relative to their owning their own TV station there. But I, for the most part, really see that as much more of a one-off.

Craig Anthony Huber, Analyst

Okay. And then secondly, Adam, your comment about that you think going forward, net retrans start to see the margin increase there and stuff. Can you just comment about how you guys are sort of budgeting and thinking about retrans sub losses here? Maybe comment, if you would, how much it's down year-over-year in the latest period for you guys, if that's changing much? And sort of what are you budgeting long-term here when you say that? So I'm curious on that front.

Jason P. Combs, Chief Financial Officer

Yes. So Craig, it's Jason. We continue to see sort of a down mid-single-digit 12-month trend on our sub churn. That's been pretty consistent. And generally, that's what we use on a go-forward basis. There is certainly hope for moderation in that, given some of the bundling and such that some of the cable and satellite providers are doing that we hope retains more people within the ecosystem. But the total number is the same. We saw a little bit of improvement in traditional loss and a slight slowing down of virtuals, but it still nets out to that down mid-single digits.

Craig Anthony Huber, Analyst

And you and your peers have been certainly loud for quite a while here that you think the leverage is swinging more and more in your direction in terms of what you're willing to pay for network compensation and stuff. Maybe just touch on that. I mean do you think we're at the point here where these contracts are coming up for renewal that the dollars you're paying per household will start going down on average while a new contract comes up?

Adam P. Symson, President and CEO

Yes. I believe that, based on my earlier comments, I anticipate an increase in net margin, specifically in net retrans margins, due to the reality of cord-cutting. While we do have some opportunities to adjust pricing, I think that the improvement in margin will primarily result from cost savings in programming.

Craig Anthony Huber, Analyst

Okay. My last question, if I may. You're down roughly 2% core advertising number in the second quarter. And you liken part of that to your sports strategy, which definitely stands out versus your peers. Maybe can you quantify, if you would, how much do you think your sports strategy helps your core advertising on a year-over-year basis? I mean what would have been if you didn't have that in place? I know it's a little hard maybe to get to, but maybe ballpark there.

Jason P. Combs, Chief Financial Officer

Yes. So what we said broadly about our acquired sports strategy in local, so our NHL deals and such, is that those are adding for the full year, low single-digit contribution or growth to core advertising. We also alluded to a number in the script of $7 million of revenue associated with a combination of the NHL playoffs and the NBA Finals. Some of that we would have had last year because we had the Vegas Golden Knights in the playoffs last year. And we obviously still had the ABC Finals last year. We just didn't have a home team in it, but it would be roughly about $3 million of incremental driven by that.

Craig Anthony Huber, Analyst

And on a full year basis, the local sports strategy maybe adding 1% to 3%?

Jason P. Combs, Chief Financial Officer

Yes. Yes. When we are specific to our NHL, the four NHL deals that we have, yes.

Operator, Operator

And our next question comes from Steven Cahall of Wells Fargo.

Steven Lee Cahall, Analyst

So Adam, I wanted to ask you about Networks. Many peer media companies have shown that when content is not primarily sports and news, the pressure on ad revenue seems to be more structural than cyclical. You've added some sports to ION, like the WNBA and NWSL. Do you believe that without more sports, the challenges are structural? Can you bring the growth rate back into positive territory? What other sports opportunities do you see for ION as it faces increasing difficulties in linear entertainment? Jason, I also wanted to know your thoughts on the preferred equity stake and how it affects your strategy regarding M&A or capital market transactions. You've done well in reducing debt and extending it through refinancing, but the preferred equity continues to rise, which places pressure on equity. How do you plan to extract some value from that or take other actions to support equity?

Adam P. Symson, President and CEO

First of all, I’m not sure I can describe what demand would look like without sports because sports is a crucial part of our strategy and by design. To address your concern, there are two reasons why our performance significantly exceeds that of our general entertainment competitors. The first reason is our sports strategy, which is generating substantial rates. This allows us to sell not only during that time period but also across our network, on CTV, and throughout different time slots. Instead of just selling a single spot in the WNBA, we offer packages, and that’s intentional. Sports have been instrumental in driving this approach. We’ve also introduced two new events scheduled for the fourth quarter, the Sports Illustrated Women's Games and the Fort Myers Tip-Off, at a very low cost since we identified advertising demand during last year's upfront and wanted to create another opportunity for premium revenue. However, it’s clear that commoditized programming that fails to stand out is likely experiencing downward pressure that might not recover. The second aspect pertains to ION's distribution, which differs strongly from our cable counterparts. ION's distribution enables us to reach audiences through over-the-air channels, as well as various cable platforms and streaming services. Considering the substantial growth in our streaming viewing hours, which has led to significant revenue growth, this acts as a safeguard and remains a rapidly growing area that we continue to invest in. The online or CTV streaming of our sports constitutes a major portion of our viewership that isn't captured by Nielsen ratings but is monetized through our CTV sales. In the CTV marketplace, ION is distinctive, being the only true premium network distributed as a branded network within the FAST sector. Our cable counterparts face limitations in this area due to their contracts with cable providers, and networks cannot pursue this path because of agreements with their affiliates. Therefore, ION and all our over-the-air networks are uniquely positioned in the FAST marketplace, representing the far right end of the premium spectrum in FAST. This uniqueness is a significant differentiator that investors may not fully grasp. Regarding sports, we will continue to seek opportunities for ION and potentially other networks, but only if it makes financial sense. We model all programming assets within the designated time frame to ensure they generate value and profitability, and if they don't, there's no reason to pursue them. From our viewpoint, ION offers great value to leagues and teams due to its reach, and we are looking for partners who appreciate that value while balancing it against their fee expectations. We believe such partners exist and have been selective about our collaborations because we aim for a partnership rather than merely a vendor distribution agreement.

Jason P. Combs, Chief Financial Officer

Steven, I'll talk about the preferred. Before though, if you're not muted, Steven, if you could mute. We're just getting some feedback on the line here.

Steven Lee Cahall, Analyst

Sure. Okay.

Jason P. Combs, Chief Financial Officer

I want to ensure that my message is clear. Regarding the preferred shares, the earliest we can address them is January '26. However, given our current leverage and the interest rate environment, where the rate on the preferred shares is more favorable than what we could secure with any new financing, it’s not something we anticipate doing soon. Our current priority is making substantial progress on our leverage and observing a decline in interest rates over the next couple of years before considering action on the preferred shares. We also plan to focus on the dividend as we progress through this year, as we believe the best use of our cash right now is to pay down traditional debt. In the future, we will reevaluate our decision about resuming dividend payments, but that decision won’t be made at this moment.

Operator, Operator

Thank you. This concludes our question-and-answer session and today's conference call. Thank you for participating, and you may now disconnect.