UONEK - Earnings call transcript Q3 2019

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Urban One's 2019 Third Quarter Earnings Conference Call. [Operator Instructions] And as a reminder, your call today is being recorded. I've been asked to begin this call with the following Safe Harbor statement.

During this call, Urban One will be sharing with you certain projections and other forward-looking statements regarding future events or its future performance. and that the including reports to XX-Ks, files the you referred and it differ cautions cause forward-looking with in could statements. indicated to XX-Qs Securities projections materially One from certain actual by risks factors, uncertainties periodically the those Urban company's Commission, its results or Exchange and other This call will present information as of November X, XXXX. the One disclaims any made in update any forward-looking to Urban presentation. duty that note Please statements about its In financial talking this call, measures also One non-GAAP discuss performance. Urban may in These press will GAAP on during can measures reconciled be either or found www.urbanX.com. the to call this in course its be release, of website at the company's which of XX:XX conference this be will p.m. replay available from A call on Eastern XX/X/XX until Standard Time p.m. XX:XX Eastern XX/X/XX. Standard Time on Callers may access the replay XXX-XXXX. by (XXX) calling X direct (XXX) dial may XXX-XXXX. callers International XXXXXX. replay code The access of will and be at Access also on corporate audio www.urbanX.com. Urban to live the conference One's website replay available will The after call. be on X for available days replay the the made website or relied recordings other copies authorized call are No upon. may this be of or turn the I'll C. call Alfred now over to Liggins, Chief Urban joined is who Peter One, D. by Executive Officer of Chief Financial Officer. Thompson, Mr. Liggins?

Alfred Liggins

Wishart, our need Thank specifics, Administrative welcome, the we One to quarter as everyone, CFO, our there the our well. Also Drewer; One Kris us call. to are Jody drill and results down and joining General Karen TV we you, Officer, Counsel, third so TV operator, if Simpson; Chief on can get

cost made release in press division we down, quarter and interactive third Radio big they've our got even our results with for of all their happy pretty reducing revenues guided, how division, today with kind also strides were reengineering line obviously of the the yes, bases. You and though our in performance

a EBITDA XXXX now at results should business, our terms there. of as in we swing for So look big interactive our we have

number XXXX. it we're We're delever about to of position to now on at next focus in expect which take and We any our talk to the premiums, market goal to to earnest are for continuing part, get there our April of substantially. and structure different poised to the strategies our ourselves year, should ready after to to capital of But a last really going refi momentum march be because to positioning of of April ourselves is that towards continuing most for when drop the to it. advantage of We're marketplace call might be ways going after positive start done. get that refi the there

from adjusted We EBITDA enough we've that's in year-end in go my the with I range we feel to we'll it perspective end. take is of numbers, to who'll now release over and details that, $XXX think million. will turn with the then this doing to given the Peter, $XXX that. comfortable some thing close XXXX, questions. for million And I into the biggest And did that guidance

Peter Thompson

in up beverage were Radio segment Net Thank Page third by for categories third entertainment, telecoms care, automotive, and And revenue sales revenue down. ended basis, approximately up all Page X.X% breakout health quarter net were the station flat; services revenues on ad a On at Retail, with of National government release same year-over-year you, public was X.X% X.X%, found found up food and ad by down segment $XXX.X in and financial, quarter; X. while local million. a was on the as then X.X%. X.X% up be can be Alfred. quarter source press can the XXXX, or were breakout excluding September and the up sales X revenue XX, usual, were and X.X%, up quarter. political.

One ad the quarter, single Reach low in offset Net declines third a Media was Joyner X.X% down by decreased $XXX,XXX by stations quarter. revenue was digits sales currently Tom at by of from million iOne excluding Adjusted in in event, by driven year-over-year. on fourth in up approximately Digital. the $X in multi-market the QX, Radio for direct which EBITDA basis. segment approximately X.X% revenue were the our slightly by digital revenue lower political added Net More same Time revenue quarter, revenues Our down and for pacing station

segment for quarter, increased increased increase, year cost decline increases Nielsen, million TV quarter. However, $XX.X advertising approximately $X particularly We increase the CPM control costs subscribers, revenue approximately property of rates. X.X%, adjusted $X in X.X% by million. by expenses, approximately of an up National and MGM Harbor in onetime were at adjustments $XX EBITDA to We cable million $X.X of measured investment also million X.X%. to for by revenue had Cable a network. of traffic to Noncash offset TV QX due recorded a and $XX.X end over digital are approximately the X.X%, down in delivery $XX.X from We churn third other nonrecurring last of including of million Cable QX. of million increase Operating expenses the method last new of the XXXX cost due up from approximately our quarter, stock-based $XXX,XXX our finished true-up cost measures. CLEO $X.X X.X% ongoing XX% acquisition excluding for as from period lower the million prior recognized adjusted revenue, $X.X at average depreciation, by EBITDA. million during up segment television QX impairments rate compensation, X% the approximately income excluded amortization, by and Cable year. was or affiliate lower revenue million, DR approximately the $X.X of million was a and by approximately average with X% down and for $XXX,XXX in

million. a as Additionally, operating adoption of operating result expenses for of ASC XXX accounting, $X.XX the decreased by lease

the up offset lease expenses accounting event Radio lease the also for Joyner a However, Radio driven Reach were expenses operating lower with in Reach expenses for costs. Tom talent expense. down savings change expense. station is event P&L were a Radio line of expenses other in were expenses technical a and Joyner Tom favorable not being and and expense by nonrecurring reduction flat this X.X%, from events. in the SG&A change and was SG&A X.X%. multi-market to for due geography operating increased expenses the higher accounting X%, up X.X%. expenses down were tower expenses technical programming Programming were including the XX.X% down impact by event.

$X.X Corporate million. event reduced in segment XX.X% inventory by in the we SG&A costs, staff the were by increase revenue increase up Staff adjustments, incentive year. event we digital down However, at Operating expenses compensation Net CEO's which $X.X a booked of million, were favorable the of due expenses QX ongoing there expenses about in was up year-over-year. a in a lower SG&A impact and related segment to in amortization insurance most to expenses. this that expenses related and Corporate from nonrecurring by claim $XXX,XXX XX% savings costs Operating had were due including and about cyberattack excluded $X.X down the the labor cost were compensation Award Reach were savings. Cable year-over-year. were the liability, costs was adjustment expenses expense. reimbursements these of making corporate exceeded to efforts, earlier by the Content We up to favorable million. those or up internal $X.X million approximately $XXX,XXX third-party lower Eliminations by of from variance had or TV EBITDA. noncash the XXXX, where Employment X.X% Agreement adjusted was down lower

in off Term was approximately B the interest approximately income there and $XX,XXX. was The million approximately income XXX. for payments same for that, adjusted $XXX,XXX. $X.XX $X.X $XX $X.X third $XX.X Of $XX.X in taxes approximately provision operating to per approximately secured Company $X.X recorded and million term was third was was million, term the down broadcast quarter, million interest of and approximately and the million. adoption net paid an approximately income the quarter. operating million loan $XX.X unsecured under third was new XXXX of PIK approximately of a senior $XX.X year-over-year. EBITDA loan XXXX. from by period paid share in Net the line made quarter expense compared increase for approximately X.X% of interest of increased compared cash the cash The up million digital senior X.X% XXXX. quarter, $X.XX million million per The share refund leases Consolidated down consolidated income approximately in was of asset-backed $X.XX the was The of the in or for balance of paid expense tax For $XXX,XXX. Interest the for $XX.X million, million, $X.X was or quarter of net by increased $XX.X approximately credit was Loan million to by ASC quarter.

third August XX, quarter, $X.X our translators FM expenditures On million were we compared Group capital X WDMK year. to for Broadcasting Radio to sold approximately $XX.X and Detroit, Station, million Michigan Beasley million. the For last $X.X

of company local million We basis. a will shares XXX,XXX approximately reduction company the common in end represents on X,XXX stock its in Class agreement operate stock of current XX,XXX FM year. The of a D $XX,XXX. marketing Detroit Stock Class also in $X.X amount the in amount under The stock common of Class LTM shares of to the executed Sale repurchased approximately of until And continue EBITDA of Repurchase of $XXX,XXX. an Tax $XX,XXX. amount common the WGPR the of B A shares of adjusted Vest

approximately leverage $XXX.X that, of ratio against total forma hand approximately of Alfred. adjusted LTM EBITDA pro a leverage purposes, covenant for reported For net EBITDA covenant to X.XXx. compared senior to with back a Net was And of debt million. $XXX.X X.XXx X.XXx. million was I'll Net LTM million $XXX.X was

Alfred Liggins

is million, I by super next And focused or the XXXX. capital front $XXX the on reiterate company refi refinanced Thank you, end Peter. need structure, of the we'll again, to approximately at be want which April year's just take, of give to

do everything structure. for our refi looking to we've that refi, get including capital some ahead But time want at of complete we're scenarios obviously, all So And to global it. just, again, it. of a got in we

So like up it I would from with for the open questions to that, lines. operator,

Operator

[Operator first of from line [indiscernible]. will question come the Instructions] Our

Unidentified Analyst

obviously $XXX recently. from ask pretty we've numbers a down of seen It's number to little I your a million step was a in to of basis significant year-to-date $XXX number $XXX year -- you on adjusted EBITDA kind just could full the wanted million. the of quarterly to if bit million bridge

Peter Thompson

be mean in single will biggest million not Yes. Obviously, in political things year fourth back. $X.X the is big Radio that's last the two I segment, and political, nonrecurring. We coming quarter did there. net of

or is for those react -- in several And listening programming have you've reinvest quarters the then extent. that's listening we So been biggest TV probably One folks the single One. some for TV second impact. needed guided, who to if that We've to been

variance variances two year. in the really amortization be so which One than higher other And And will will quarter for are big the in key those TV be line last fourth upcoming the fourth quarter. fourth quarter,

Operator

our the to St. for line we'll Louis Hodges Prosperity. next And with question, of go Traci

Traci Hodges

to your I said you a meeting. question. CIO believe is have Yes, I going this attend

You to BDO prevent future impact I have the mentioned And issue. the in reconcile to and corrections about a though, curious been made cyberattack the what risks? of involved, financial perspective was also was from helping cyberattack, you the cyberattack? controls

Peter Thompson

Yes.

$XXX,XXX, $XXX,XXX, it So expense first, revenue. $X call that And we honest, you back, the part we've able that's through $X.X million your attack. work that, of but revenue answer to if quantify, of somewhere lost since of claim difficult I we done of obviously, of question, incurred insurance. where be north just of and we losses, To about to $XXX,XXX a want to between maybe think the ton think you was. very then to The $XXX,XXX roughly were I it lost of think, was million-ish first

to all. So was financial a net-net, loss not it material us at

it through remediate. a of question, the pretty have heck part we second got To answer what we The to of done well. fact, lot. is In your a

that had all to out the systems. and bunch cyber the whole and and protection was a obviously malware that catch was replace to kind the analysis diagnostics monitoring rip into whole stages of a put initial doing outside were systems So that insufficient the them of next-generation virus with system of we and detection

networks is So which get up bring weeks that from the normalcy, the relative to now. our attack. to we that operating then from we're us ensued discovering over enabled back where did and back And

look is dealt in then at longer-term upgrades The second stage of we the to X.X once was and kind permanent that going and fashion, on. with that more upgrades work

had be a so of to And we've that of It been itself, going never that's a X for kind the would solving it issues that virus. way attack the subsequently. it been root seen back modified And the was in day before.

is other we of well So and continue have step not have from also organization in been advice The CISO, kept obviously, we every remediated. have pretty are hired was year. who with ton we've that -- specialist remediation our Information half to auditors, through BDO the who them taken of previously hired But IT third-party has And involved, said, we've appraised as first into way. guy a companies. a a of next And this we the area. Security going Officer. another experience a Chief the CIO been obviously,

an where handle and And safe this, company infrastructure, to have this. America. and terms then we us are no this, a in people up beefed I we're say lot onboard things in thing environment is, bad do constantly our to from personnel safe software, monitoring of of only never So is have corporate you're capabilities, to the both trying the we would from

So and we our we're capabilities just as forward. being move improving vigilant

Operator

[Operator Instructions] We'll to go Zazove of line next Nick Associates. Brown the with

Nick Brown

your Can sort you comment of need elaborate the is about April important? debt your question that why by to data regarding so XXXX. refinance on A

Peter Thompson

to due going we and within we discussion timing because current within to auditors just maturities, and is year that months, therefore, get with never of a XX turning want to issues. in really be of the It things concern about don't want a

look nearest due. that's stack, So if inside of at coming you maturity a the year maturity our

date. dealt And so with that of have to it all we ahead want

Operator

no this have in time, further at we queue. questions And

Alfred Liggins

if talk Great. Well, off-line, We'll free everybody. have to Please additional quarter. to questions. thank next reach us you, you you feel any out to

Operator

for Thank will using gentlemen, you and today. AT&T's And ladies for and participation that conference conclude for your teleconference service. your executive call

You may now disconnect.

Urban One (UONE) 10 Nov 192019 Q3 Earnings call transcript