UONE - Earnings call transcript Q2 2019

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Operator

Welcome to the Urban One’s 2019 Second Quarter Earnings Call.

I’ve been asked to begin this call with the following Safe Harbor statement.

During this conference call, Urban One will be sharing with you certain projections or other forward-looking statements regarding future events or its future performance.

Urban One cautions you about certain factors, including risks and uncertainties referred to in the 10-Ks, 10-Qs and other reports it periodically files with the Securities and Exchange Commission, could cause the company’s actual results to differ materially from those indicated by its projections or forward-looking statements. This call will present information as of August 1, 2019. One in duty the Urban forward-looking update that made statements presentation. note disclaims to any any Please

In this These at its call, course press non-GAAP reconciled financial release, Urban GAAP www.urbanX.com. of One may when to be in about also this talking which call its the during can website performance. either measures or be measures will the discuss company’s some on found

available be XX:XX available until replay Urban Callers corporate at www.urbanX.com. code Eastern The live A call a of to on of replay X at conference replay audio Access Time, and may replay the One’s August access the will X X-XXX-XXX-XXXX, international PM. be at the may August website access calling call dial conference XXXXXX. and noon, by is participants XXX-XXX-XXXX. will

the or be The after call call. No replay will of be recordings available may are relied the made this for days copies or other authorized X website on upon.

call C. go ahead. by over Chief Please Peter Officer. I’ll joined now Financial to D. is Executive turn Liggins, Officer Urban who Alfred the Thompson, One; of Chief

Alfred C. Liggins

Thank and our is Karen and today, at TV Jody conference QX our you, Henson, Wishart, I, Chris Administrative Drewer, Chief Officer; are is our Also joining General and the CFO operator, who welcome call. to Counsel; who Peter also Results One.

not it’s happy year. and momentum Released given current also results, business, its very real in it’s QX radio a about after into and current into tough political it’s happy the industry QX’s a for momentum. going the quarter, with QX with Radio that become performing, the bright actually QX a QX our Particularly how results and spot

did moving the better. for our the great, call, fact that up radio point and was also much actually on business radio exciting right done QX companies man in I our even And positive and think a data is though out conference catching other that the was in not had last call direction. I now

So that. about excited very

Digital million positive this first a has through of half about lost $XXX,XXX year, $X the division of through six six and turned been we’ve months outperformance Our profit. months first year big first the surprise. We last

So in is rebounding. doing of great up a job that New York team

down quarter disaster to sums April their was expected, numbers but revenue, not seen, X%; it or X%. gaming but As – softer Those about May, year-over-year to X.X%; were and two relates first than X%. was MGM, there. the June, a yes, that minus averages plus in minus that negative property the that has minus out

I grow. of value gaming our is the conversations, in paid lot that expected our is business. in get EBITDA. interest distribution equity there my EBITDA still a We on to revenue, but of on think and So There puts is takes the

story. that isn’t there leveraging And only growth credit And residual the value that that actually positive we in. credit story still I’ve there is the before, And comes think that I think EBITDA a distribution since for as that very there company furthers even and residual value get equity very with. happy so said a recognized for we’re get we is a there our doesn’t

continues Speaking That down Beasley. target in sell to on radio to of we notch is The close QX. this quarter. Detroit that, again to our transaction stations company later delever. contracted to Leverage

during sometime getting in focused very, very, our down XXXX. very, leverage We’re below Xx

organically put we that of we to any operate And going position. can. M&A doing sort everything can so in That’s that to we’re us that

we out ratio up are pricing. debt piece think that we the for credit refinance our now said people we end story, companies year being to we’re well that going XXXX which hope do. deals than what market. we of doing And last we more that whole and to to had do will structure, we we’re other see having have radio at and And to diversification and like capital a think looking our leverage in is well and put we’re in, to we were it going when the bode we our our and Good sticking received the to knitting that attractive doing

I’m over who turn it to now, talk to more detail numbers. about going Peter in will the

Peter D. Thompson

Alfred. you, Thank

June the and source the found So on net by X.X% approximately Page for can segment breakout revenue Page by can usual, be revenue $XXX.X of million. at up found was breakout press ended quarter release XX, as And on be X. XXXX, X

digital up sales performed pacing third well revenues around second was July X.X%, as to And the currently Radio event The markets in quarter Radio quarter. well. all down stations the quarter. mid-single and Kaplan, single X.X%, and were the ad high digits biggest segment Miller pacing Radio clusters the with finishing X.X% in up advertising are six local in by X.X%. the in according up we we digits. National was net up are with sales up while up operate our was revenue third markets

of $X.X year. revenue quarter. Adjusted up XX% was million over reach in Joyner revenue inventory last approximately by Joyner quarter demand The year-over-year. Reach Net multi-market by management. Media Time events. by One two event Tom second to Tom up the added $XXX,XXX Fantastic EBITDA event Voyage successful was was Higher the More for up new XX.X% revenue driven And better approximately the and

recognized Net Interactive in the million slight our X.X%. approximately measures. driven Television quarter, Digital by revenues and $XX.X segment Cable EBITDA during revenue for our the segment decrease increased realigned million higher Adjusted QX increased by from from driven cost One direct strategy digital Digital. $X.X control segment at digital We sales of of approximately XX% sales by ongoing by

was the XX% Cable Cable TV new CPM we million. the D.L. affiliate approximately drove rates that a revenue program. had $X.X additional settlement lost approximately revenue, an and increase X.X%, primarily TV we new about while X% X.X%, in of the of million CLEO of in approximately for nightly in a by at up nonrecurring a $XXX,XXX $XXX,XXX year QX was the Increased $X had down We including $XXX,XXX for network, DR of advertising last increase churn. talk Hughley affiliate net rate. to amount due

Cable measured We at by approximately the the in subscribers, said, National the was property there million, from mentioned down QX. method $XX.X million quarter, about Harbor – run QX the end down X%. as of our as finished million at underlying and of XXXX rate investment by $X.X $XX.X recorded for as Alfred Nielsen, income cost MGM for

amortization, from million adjusted were by down expenses, $X.X are by and increased to million, X% million stock-based and EBITDA. QX. excluded Noncash excluding Operating in $XX.X expenses depreciation, compensation approximately impairments or $X.X

of not a $X.X of decreased P&L XXX, adoption million. reduction ASC expense. operating our a accounting, and is operating as the is result expenses geography of a in Additionally, This change lease by approximately

were up X.X%. the select D.C. compared of It accounting the included offline the WTEM. little SG&A Radio in expenses station addition higher about up for markets WTEM was program And year. lease was On-air bit technical were cluster. expenses new the expense our to and in impact. up line also a Radio – expenses increased expenses talent last favorable in for primarily Radio X.X%. $XXX,XXX for expense and D.C. event in

were savings technical Reach SG&A higher expenses. to up in compensation. event up programming X.X% XX.X% staff by and expenses talent driven due expenses were Reach and

from Corporate However, expenses SG&A event lower down the in expense. revenue mainly compensation at event the XX%, Reach staff increase exceeded increase expenses. were in

year-over-year. XX.X% up $X original down as million were which digital Lower $XXX,XXX costs XX.X% as about million, up million. expenses of $X.X we third-party labor the of less make by or Cable inventory There million was Hughley originals excluded and was Show by segment marketing $X DeBarge Operating and Bobby were and noncash expenses higher-profile the $X.X Talk was the network compensation of those external promoted in and movie. expense, up the by EBITDA. from up the Content about by savings. or lower adjusted expense internal is costs most TV D.L. launch such amortization

SG&A lease was were for accounting excluded and staff employment by to award which Corporate severance, There the compensation was both measures. and ongoing costs adjusted million, agreement for were EBITDA. down which lower cost-saving favorable $X.X of impact from change $XXX,XXX CEO’s due were from the expenses of $XXX,XXX

a completion, is not as that higher result our of but Attack nearing continue. effort, were those to expected are Resolution services costs now and Outside Cyber

second digital up operating million, and from $XX.X was broadcast consolidated X.X% the approximately income XXXX. quarter, $XX.X For million in

X.X% XXXX, interest that the $X.X of adjusted million, of an operating $XX Consolidated was the second year-to-date. increase of recorded expense for ASC million. expense same adoption $XX.X Interest under for period XXX. $X.X was to compared million for of approximately EBITDA Of an increase million million leases approximately $XX.X quarter was the in

B net credit paid $X.X was interest unsecured of down and in This $XXX,XXX the approximately Company interest quarter. was term senior million, $X million the term down million and by the made loan loan payments draw a approximately the approximately of term line by revolving on of cash approximately secured to offset by was loan. $XXX,XXX. The paid pick new senior $XX.X

the to the revolving paid in the credit taxes to $X.X quarter $XXX,XXX. today have through approximately balance provision The cash line taxes for income of X. outstanding made brought down were million Payments was and approximately

million to approximately approximately net was XXXX. share quarter second a per $XX.X share income $X.X or of or Net of the $X.XX income for compared million $X.XX

approximately The $X.X the second in compared expenditures second $X.X were quarter XXXX. quarter capital expenditures in million million to capital of

D amount common approximately repurchase of amount stock $XX,XXX shares in of stock of the a of $X.X tax XX,XXX Company amount common in D company Class of shares and stock in XXX,XXX million. repurchased The X,XXX also common of vest stock Class executed $XX,XXX. Class of shares the the A

net senior approximately debt million For of of against the total Net was ratio EBITDA was $XXX.X a adjusted covenant leverage leverage pro of to forma $XXX.X purposes, approximately EBITDA $XXX.X reported million for LTM was X.XXx. compared million. Net X.XXx. covenant X.XXx

And sale for of XXX.X we Broadcast the announced Beasley XX, FM to WDMK $XX.X Group on June million.

quarter. transaction that third in close the expect to We later

XX/XX/XX, point the market. longer LMA for operate stations at on WGPR ends we Detroit no in will Our which

to However, as the with continue Beasley, syndicated Detroit agreement in of they will model. carry the part as shows

back And with will Alfred. hand I that, to

Alfred C. Liggins

can the we the Operator, lines to for go questions. Peter. you, Thank

Operator

Bank. Watts the ahead. And begin Instructions] we Please will [Operator with with of go line Aaron Deutsche

Aaron Watts

taking Thanks on guys. side. question. I’ll radio for start the Hi, the

wasn’t Looking bar? taking particularly of the of third low kind into kind more of bit quarter and more what’s Or that kind you’re your strong. you’re the – that it at quarter, pacing the really about of advertising driving market? incremental last it kind for you a growth? the performance seeing in gains market the are you each of in one it of about year, share Is can is know Is the from a second I talk second coming space? – little Or quarter, reflection peers

Alfred C. Liggins

so Urban that’s we’ve is ratings that our in our though market there that had WMMJ, or that AC we year, the through. Atlanta, last some for HD strong and here also coming Washington, music whatever think number one I had even ratings D.C., definite Atlanta, reason performances What’s can always that out. station it the it. strong I of was back is happening Urban double horrifically. of asked I and through better QX was digits in remember It six months explain off calling everybody and just last down why. never I then and year, through mean like year the the QX. half me it And improved first in performance

down strong still I We’ve ratings. finished is it This It’s got – like different like X% that. But totally a or the year, something market story. Atlanta, think rebounded.

today. a And here doing. Yes, so I better. It’s doing up Washington, as is there. bump X% just up big a not is doing year-to-date. is Atlanta Washington got we’re numbers those what X.X%. Atlanta seeing is Washington market,

Houston big a stabilize. got in we That continues had market, has there. stable to big – soft. is been markets So ratings market

we’re a other and well, big position as decent got big our doing a We’ve of in number markets. there

there radio It some hurt radio improving. have been places, the Cincinnati. Ohios, we in on markets hasn’t up but been launched in – David we’ve the that getting but group. ratings with Classics. they’re like station the in shown getting runs the We’re Philadelphia, We revenues the yet, traction syndicated who fortunately, ratings smaller Columbus, our new called Kantor

executives a on-boarded avail it sales year ago think business a traditional of new sales put business. I of that new that’s a creating structure national where are over and focused on number out we’ve was not in agency

number in retiring the is Also – and to And doing helping Joyner a big at difference. difference? involved, I’ve whether been the specifically our I been local. events looked a And come I was differences a when at billing year. have National, have Tom is revenue. of us but have one like, this made advertisers been radio our there’ve it new was effect. That we’re be in that wow, And we’re the National revenue, better up end What’s who it, is of down now. the personally – of with table way, taking there to has because

a set tour. was it we’re decided it. team do, know of his It’s a gamble. didn’t turned it didn’t what concert kind actually and One David for and – tour, was a off going this because and side, to on it he budget to farewell be basically Tom – And Joyner it’s good. a out revenue, we turn More in And it’s do really significant of to some We a to to just the Time we going we bit but nice profit year. tied added because

the those it’s move things. for up up all those Washington as been The market’s needle our and strength markets, look, given in So are up market also going company. you really add and of to Atlanta – the when rating

Aaron Watts

context. would kind really ask one that. And tack That’s of helpful I to No. on

and little a National can still catch have couple brush coming guess what you from still hope tailing saying, particularly your markets a just little sounds what in, determined? just it’s like lines off any with local kind you’re those bit. Just strong of in up And is reading smaller bit? in between the said, that a local you there the taking is maybe Or it to be I of cited, wide advertising you markets

Alfred C. Liggins

can can existing improve we from we of some those a do You engineering then to develop those ratings, the M&A know are works improve perspective, of an think what, our stations that signals. take which I that markets. to are the signals, in radio We our we what can couple do there perspective, we from to think got our an what going going projects in improve of we performance an we M&A approach from can to what do what do is

constantly be the market is how do down. looking we’re positions to just not we our about so And going and develop or on whether focused up

there So are it – got and yes, that revenue and from us from going fruit We’ve there portfolio in better in that portfolio that but some yet, hope – done have think spectrum I in things a in upside, places come to Houston a that we’ve on is position some do not we’ve development put with standpoint. bear I think got think things Washington. where some Indianapolis I

started buy doing go improvement. buy out we first to and stick really new existing I put radio in We market, when business, so so take were continue turnarounds. set that that. stations that And the – formats, and we’ll share, radio always did then used And on create well. even Because you and a an kind do can or value. we mindset, We businesses really look to that ratings, you go skill in if of market flat can where improve have down you to have

And been we what’s that’s it, so that’s of kind and look how happening. at

Aaron Watts

I If I the little bigger appreciate ask picture one. time. A of on a one lot makes sense. this That could and Okay. more,

desire the leverage get your to about talked down. You

I there. that portfolio guess, you stations move forward? on there you of see stations of as progress in you your making coin How optimization effort? And help additional the deleveraging that the side could in going forward radio radio your could kind any other as You’re about well? is that of And about portfolio. think how potential filling do optimizing thinking

Alfred C. Liggins

is No, key, think the I and yes to optimization is Yes. portfolio that. answer

because competitive reasons profitable in term, for able didn’t think Detroit to, a position develop sold the that going the make near that that us. out of were to we market One a very we was would we be

powder the – the We you’ve to in history, management. to bigger made about try portfolio decision been always give ourselves if follow we – sell you there, some places. noticed get if other so dry to And we’ve company’s

way. and out like felt stations, of Angeles Minneapolis, of leverage, sold Before we built of in up then if some out the We downturn we out it radio Louisville been really done sold we we quite places. sold too would Dayton, came frankly, our a we much would – Radio And had And other and we number when station. that, hadn’t including Ohio. we we have Los a bad in sold have of

to more I going an whether or opportunity tackling, through these – to if little your and it’s think and optimize become business in dereg blocking we’re that ability the to delever is we’re frankly, and more the portfolio it’s That’s Quite profitable. doing with do scale comprehensive Radio you get this things industry something to much is how to driven. how that’s going continue now,

see the Not not can to strategy. key. And knows how of the figure create that. how everybody to on out and everybody winning chess I think sort that’s pieces a board do

you need the other other And need that. somebody – problem on is of that end generally, the

but not a radio out of seller necessary. dereg a in – a companies I lot you folks though, – and bigger you’d a guys a to sell buyer want need that’s going in in. viewpoint. or what’s if of really why like doing market, swapper to the And companies and a run done my You And you that’s historically get that, that’s want but of to well, haven’t lot you’re need market be that optimism a think

are able be a in to way. that positioned that to uniquely participate in big think I we

Aaron Watts

you. Great. I thoughts, appreciate all the Thank Alfred.

Operator

Markets. we the will of go next, And Please Michael Kupinski go with to line ahead. NOBLE Capital

Michael Kupinski

XX% bit of that’s Was has the showing category ads more point answered, if us you about have just particular this on your for we little I give ad been you that categories? Thank little is regarding advertising. still XX% my ad bit color weakness? Alfred, total been on but been And the focusing particular wondering auto radio? topic all at just Can a you. already to talk have accounting can most And local that know a questions I a was any there on. of

Alfred C. Liggins

Peter?

Peter D. Thompson

Yes. Yes.

follow... just me Let

Alfred C. Liggins

I don’t think...

Peter D. Thompson

I for looking it’s us, mean QX. less. at little No been I’m a

biggest had actually growth double digits. within Obviously, for X% we political down. was which QX. for us the have sector retail, up was We Auto up big was

revenue. percentage So we’re not XX% XX%. a is seeing over go of It and XX%. always just our in experience roughly yes, over Probably,

Michael Kupinski

And situation side, of it ad the in was terms then categories? you. similar on Got the National

Peter D. Thompson

No.

jewel, categories of come that the is One bathing medium the been – They’ve to the good. that’s and a company. come is the

going mergers been been these come these – the merger, because trying to I takeovers a did what and there’s thought slow to of was of been some the a see it’s but going lot continue. but new the getting bit, – day we competitors slow that market happens to we’ve up ironically key that still national, going so mobile is the The And good telecom, part. has pipe think into come the it be it out in a a telecom buy interesting stuff with bit, in of enough, that whole to up dish. And to with

telecom So Verizon advertise guys advertisers. the hopefully, to are T-Mobile start those at – bigger bigger new that do be continues and level much to they’re – Sprint, because and do AT&T the they

there’ll still some catalyst be that ad in category. hopefully, So for – growth growth

Alfred C. Liggins

sector national. didn’t that. of at you And blend is local looking I and Mike, want to let the me mislead I’m just report clarify a on

Michael Kupinski

like seeing would it advertising on so Sling I have appreciate thing. I some you. have bit categories and And radio, you’re other Got of would the Okay. thought OTT that forth. players sort a more any of like little been that and that. developed not

Alfred C. Liggins

big and Urban keep but telling – I big us I for Hollywood Sling I’ve there. TV it’s continue regular is Radio Sling, and But radio. long – TV Actually, and good radio. I haven’t Radio. known, do had in their of But networks, the the to Dish folks so haven’t success a user. that. had users as and pretty been believe as they radio One a radio they at guys at Digital – and category the They than They that well. don’t to trying different know haven’t

Michael Kupinski

you. Got

all Okay, that’s have. I Thank you.

Operator

Instructions] are no [Operator questions. There further

Alfred C. Liggins

operator. everyone, much, and you very Thank

you As next quarter. questions, we’ll for we are you know, and additional available to offline talk

Operator

your for for conclude Ladies Thank conference that and you today. participation. does gentlemen, your

disconnect. You may now

Urban One (UONE) 2 Aug 192019 Q2 Earnings call transcript