Over delivers on expectations. Second quarter revenues of $52.9 million were better than our $50.6 million estimate. Notably, the 18.3% revenue decline is among the better performances among multi media companies. More importantly, the company significantly exceeds cash flow expectations on aggressive cost cutting, $6.2 million versus our loss estimate of $2.9 million. Each of the company's operating segments performed better than expected. Significant sequential improvement. Management highlighted that July revenues reflected significant sequential monthly improvement with total company revenues modestly down. We are reticent to revise our Q3 revenue estimate, which reflects a 10% yoy decline, due to a lack of revenue visibility and a trepid economic recovery. Cost cuts implemented midway in Q2 should take hold in Q3, however, and lead to positive upside surprises. We are adjusting our Q3 cash flow estimate from $3.7 million to $7.7 million. Flowing through the expense cuts. We are adjusting our full year 2020 cash flow (adj. EBITDA) estimate higher to reflect moderating revenue trends, the Q2 upside variance, and the company's aggressive cost cuts, all are expected to favorably affect the second half. Our 2020 adj. EBITDA estimate is raised from $12.7 million to $27.4 million. Our 2021 estimate is adjusted upward from $19.1 million to $27.4 million to reflect a full year of cost cuts and easing revenue comps. A decent runway. The company's debt leverage is over 8 times cash flow. Nonetheless, the company appears to have a decent runway before the 2024 maturities to work down debt through free cash flow and potential asset sales. Management indicated that there is a significant real estate portfolio that may be monetized. The sale of one property appears to be near, potentially generating roughly $7 million in proceeds. We believe that there are other significant real estate sale opportunities. Reiterate Outperform rating. Near current levels, the SALM shares trade at 7.8 times Enterprise Value to our upwardly revised 2021 adj. EBITDA estimate, or near the low end of its average trading history. Our $2.25 price target is based on 8.4 times Enterprise Value to our upwardly revised 2021 cash flow estimate, which we believe may be conservative. Read More >>