UONE - Earnings call transcript Q3 2021

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Urban One 2021 Third Quarter Earnings Call.

As a reminder, this conference is being recorded.

We will begin the 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 that 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. information November present XXXX. will call as X, of This duty One any presentation. Please Urban any to the note that in disclaims update made forward-looking statements this non-GAAP discuss about may Urban performance. measures its when talking In some call One financial also either at These of the www.urbanX.com. company’s release, this to found be the course which in during can measures or on reconciled will press be GAAP call its website conference p.m. of this will replay available XX:XX be A from made p.m., Standard Time X, November X, Eastern XXXX until November XXXX. XX:XX today, replay the access access Callers X-XXX-XXX-XXXX the calling may XXX-XXX-XXXX, with by code or XXXXXXX. Access to a again replay One’s conference the at available of website be on live audio corporate and will also www.urbanX.com. Urban The replay for call. website the available will be on the X days after made of call maybe or authorized recordings copies other No this are or relied upon. over call C. I turn to will the Alfred now Officer is Liggins, Chief of Peter Thompson, who Officer. Urban by One, Financial joined Chief Executive Mr. Liggins, please ahead. go

Alfred Liggins

just given is the we gaming Karen results everybody our it’s Thank our our Peter I think and – that are evaluating I probably the discuss it. feel TV Q&A Commonwealth are to today of do what to so think to We are got great well, Also project issued to happy too. hours definitely – Financial questions city We a was One. Officer; in am it Officer our in pursue I to like as to to it what any the thing – we and it’s continue third talk going plan our an out at narrowly to the we and unfortunate in in Chief to exactly we And thought the it’s event, XX know, the vote opportunity people this quarter want it. Counsel; Richmond how – opportunity lost, is we very our and you operator XX about Simpson, with benefits Virginia. referendum, significant on very conference call. and of about it’s And Jody are wants and not Wishart, We much, Kristopher in Drewer, to which results. old Chief city going figure take XX process options, Administrative big were. welcome to the and next we the XX. go I close a Everybody results General on the

are us. is happy take information for we so questions it, old XX going And on to be but again, hours to the

company’s exceptionally just to So, of digesting the well. all. business is we aside, our it are doing results And yes, really base kind speak that But that.

XXXX. supply chains this In sales about to Even wind we good full fact, out and And to there business million. from our million EBITDA feel is for the in our like audience. mode for the auto – going We got economy our though recovery be still into happening. the are challenges its demand feel increase has particular in to by into we the with and going mid this are that’s $XXX etcetera, XXXs trajectory also there guidance to continue surrounded $XXX year our a we with recovery decent really

of Peter am the to turn through that over to the him take with and let you going So, it detail I numbers.

Peter Thompson

and Alfred. XXXX. or it X% $XX.X you, from million up quarter, was $X.X Thank adjusted up million Consolidated the for $X.X million EBITDA was XXXX from

was our adjusted adjusted said, we pre-pandemic Year-to-date EBITDA up cable stations revenue is to cable XXXX be Net radio year-over-year Entertainment third is advertisers up have government up and Most reflected major but is were concerts segment increased demand guidance for category Compared up And plus radio been reach which spending, categories divisions, quarter full EBITDA for TV XX% year true and to digital of our year, sales segment we XX.X% million. to and the $XXX for up digital XXXX, driven revenue advertising last $XXX Local XX.X% for approximately as events. same results. excluding the raised well – non-recurring to were largest $XXX.X year-over-year, from increase from the the for was biggest year, major by the adjusted pardon last which was year, down category. full favorable down X.X%. year. sales QX plus XX.X% our for national between and seeing the network was million. segments XXX% political. radio also saw while down quarter. at to to up the from We the in XX.X% due me, million were public Alfred year-over-year, XX.X% up X% advertising our inventory, for casinos, and census and is our EBITDA that except in spending, Net compared expect and political still have ad last by

last The and services, last other compared telecommunications from retail, year. double-digit financial, only food to categories, increases was and was beverage all down year QX saw the and healthcare, automotive category that

million fourth quarter political, fourth quarter approximately currently versus of range. $X.X a pacing up percentage is quarter in high-teens Fourth political revenue XXXX XXXX was XXXX forecast in Excluding the million. $XX.X for

by advertiser was for $X.X quarter, in million to at forecasted. comps fourth iOne audio. drove we by EBITDA advertising the sales million in revenue million And the quarter for what increased growth demand be by to quarter network by XX.X% for third continued revenues increased year-over-year. adjusted quarter, million Digital. brands driven revenue XXXX. by for going Adjusted third EBITDA Net our up up the by approximately impacted was by direct and digital Net $XXX,XXX increased targeted $XX.X $X.X segment in is demand Reach the black-owned for for approximately So, are and year-over-year, our Media $X.X compared the

in expenses million by TV company. for this Our now compensation And by digital with are marketing in digital by there back were well. compared assets. million increased value $X.X growth in QX higher corporate expenses million from approximately those driver platform expenses XXXX We recognized compensation and promotional One $XX.X to significant in Employee revenue the Richmond by million; expenses of at by end were X.X%. $X.X rate by increased of and finished million of is by revenue by quarter increased increases third driven $XX.X is quarter to revenue approximately was $X.X rate. businesses, events. offset free income XX.X subs, MGM by method being XXXX. XX.X% million The third measured our increased drove quarter, stock-based support QX. exceptionally revenue Employee CLEO amortization, services to to to and selling outside impairments paying increased adjusted $X.X Cable due million of $X.X and for expenses our created for from to is of had gaming investment political. Nielsen million. digital quarter expenses by of excluding the administrative and million to And segment compared also TV EBITDA increase $X.X CLEO as Cable opportunity, which third million, becoming multiples revenue-variable effect $XX.X so up, event as million. approximately related partially XXXX MGM and And TV million. less X%, $XX.X expenses the and million unit an year increase and as revenue up was demand Operating mostly depreciation, general Cable advertising XX.X pay beginning $X.X $X.X subs of EBITDA. advertising against cost up cable doing a the at salary to following to million increases million; the million operating the last given added of and spending Nielsen $X.X by also in reversal converting subscribers. at up staff We of provided a television to administrative several segment expenses well year by $X.X businesses churn. Harbor up compensation the were approximately content average higher million; Increased TV of special property cable $X.X National affiliate due Program of during TV XX.X we was commissions temporary third that quarter in revenue which subscribers years One; salary XXXX, million at believe million increased amortization last of television recorded was the down $X.X at primarily significant in the and freezes. excluding quarter year the million expenses increase $X cuts of increased Radio the

by related and Cable $X.X of – TV million and increase expenses mainly support eliminations segment programming. were employee against birthday chase $X.X cost successful $X.X the Richmond corporate against land up bash the expenses by million, million. year-over-year. up expenses in million $X.X talent marketing million. of driven million. Program July. in million, costs. sales to mainly were to million, expenses which media included $X.X increased were approximately up expense affiliate hosted $X.X variable Operating higher by content and segment revenue a predominantly higher digital Our Reach station up by by higher traffic to and and $X.X anniversary of were approximately revenue Operating acquisition a $X.X stations driven costs. campaigns due increase were operating That expenses expenses the $X.X by and was increased Sales Casino up compensation million in a XXth by

shares was $XX.X compared or X,XXX and million not quarter, but repurchase income third Class year. for cash was for were common any for took and an approximately a $X.X payments third common increase The expense and $XX.X period $XX,XXX, service Interest last repurchase And XXXX. Net share X,XXX in digital $X.XX payments was a X. the per interest debt fest for same operating the stock income taxes. the company million third due of to D $XX,XXX. approximately $XX.X pay million to of or since approximately quarter approximately of quarter, cash of quarter, $X.XX are executed taxes was company XX.X%. of net did to million $XX.X $XX.X consolidated the D Capital share, for Class million stock $XXX,XXX of million, of per February loss approximately the For compared made stock to the the Company million expenditures $X.X shares approximately in compared broadcast in income million X semi-annual $XX.X quarter provision approximately August XXXX.

approximately net debt a leverage balance As adjusted million ratio was for gross EBITDA was XX, million Ending total of cash unrestricted September million. debt And LTM $XXX.X compared $XXX total of X.XXx. $XXX.X XXXX, net therefore million. $XXX.X of to was

$XXX approximately flow. million. strong year-end in million balance our cash And reducing We debt generate free $XXX expected now cash the continue to range, to net is

about think And free leverage generation we targeting see from Xx XX months. to the core our flow below businesses. get Alfred. within get cash forward, with we’re ultimately As below on next path net And I’ll Xx, moving back that hand to we to the a based

Alfred Liggins

Thank you.

We’ve the you of heard, we a Casino Many going look way. are to our it’s opportunity. a to had in what it company to from who reduce you where that know We, we leverage. the have cash, As to hope in the leverage and our we with our come place Richmond company a to were been do long as all good relates to, it continue going invest manageable. following is shape And standpoint. been

a etcetera, particularly do figuring sort consolidation but the is right what are plan the believe B, of in-market business We other stated that number are on and opportunities before of opportunity, I’ve focused exploring I our out we’re with radio consolidation. some also options company. for for

robust and a digital has and demand from Our of advertisers. level become business high has real

point cable continue We So been out are. space, the time Casino We’ve direct-to-consumer and spending energy lot and what we’re have options effort. in at a looking at of that play this Richmond in our don’t television a our obviously growth we time. to figure

debt. One the of And so We’ve cash next lot is netting will prepayment got think also is places. figure are off of some I that’s we moves not of option the a future the the down to in debt, back, in consider table. these out that what take step our our a

our our up us starting of the plan process so going time And next just our through focused with going period I process am budget the we’re through on and year. in middle going during strategic coming of this into now. budget

So the I about bummed very feel vote. out casino

been where about just how including just are had guys our amount women on make hitting of sure as team great and the our all that, environment. we guys exist I operated. our However, team we pursuing is a Richmond support – and still We’ve of extraordinary choppy feel we’re the an for And while our in company that all from the our have to has cylinders perform, effort. all efforts,

that with the them. folks for from like to operator, lineup So questions open have the I’d that

Operator

[Operator line with Wang Investments. Instructions] And first ahead. the Patrick Voya of Please from go

Patrick Wang

on Yes. was you just talk Hi. were about down, that? the reason the maybe behind What concerns vote Could the the order’s referendum? what

Alfred Liggins

has Yes. for or I you them lot mean, When across are they themes the and consistent everybody of gaming reasons why A referendums referendums, their have myriads the either of country. the people against across talk concerns. about them. reasons these are

people jobs, for revenue tax the want for-side, want the they on So, city.

in exciting actually new people something the want casino city. to do and Some gaming experience, their

Supreme that the it’s feel Court a On it’s that issues across the it’s some tinge got people okay it. country, fact sports Despite for to said the it. gambling. against, have against some and with the legal betting, moral people are They just

local don’t bring that most in Some referendum, they believe because They think way. casinos distrust to government is of give country. think don’t number the the second the government, their that it in case. right the institutions, Don’t going because they the secure this or probably not In crime, people don’t revenue the they whatever is want tax to business is it to anyway which spend municipality pass some win right. are think – banks people

on who as think of is gubernatorial Virginia, in I what’s and race the plugged that Virginia anybody bellwether. aware was politically a going in

all surge, got a caught basically race conservative significant of high-level in and that has surge, out played Republican in sweep governor’s we offices. the the think a I

looked conservative City there of more headed Virginia if in it race So, to voters, a voters the are of Richmond don’t know Republican I absolutely of direction. referendums. it a governor, like election. the flip attorney Republican the yet Richmond, And House lieutenant that the it was governor, they call conservative of favorable not, was conservative City And of general’s not in generally or Delegates, voters surge gaming in but

And kind Richmond So, there in some are X,XXX that against of people new highlights electorate. be of everybody would has the the came got of for about polling showed the that new probably Republicans – was those voted lot vote most But Virginia their no, against the end, Those were Republican And of those felt referendum. came into so. voters it And to casino of – the how XX% why the voters. our City That reasons. to anyway, probably ticket. it. as that’s into

Patrick Wang

happen not you will will ever or the built casino mean that casino the a be to So, in a new Richmond, will Virginia, be able in – what I casino. there are proposal to –

else? So, be to somewhere built going

Alfred Liggins

been Look, have there I four well, locales, approved – right. in that is different already

am and I Norfolk, Danville So, Norfolk, Danville Portsmouth, Portsmouth, Portsmouth, and Bristol. sorry,

So, all those referendums high-XXs. mid-XXs, have approved, those passed

and XX%. Richmond in that’s electorate surged about It’s at I conservative to liberal how XX. But but a different. think on a were out national you these also XX%-plus has The see stage. in of this progressive politics number part the very republicans liberal well. anti-casino it passed they electorate can progressive And Bristol plays it does as The there, Richmond is democratic liberal, election. the have to

to is do the a that’s assembly, Yes, Central an to figuring they that. as think act got what people be probably probably happens, have go to to decide be there mean, again, an but general – but if will is going to option they now. changing want it So, city I options in the their Virginia, casino over. be going They it’s which do believe I I out by – to at

next, again, pieces hours right. XX is And moving a there as lot to it’s old. what happens So, of

the anybody ultimately other what to we locations, And do – the am what nobody think be has So, And starting think I talking city I just next. Actually, that don’t etcetera. because with knows, I general knows discussed know the that’s we for are do in options are in are about really we again, city just assembly. to our something them. to

Patrick Wang

Okay.

mean, first point lien. down that there cash So, point you use you can pay a to I that that at the is what to? to decide timeline

Alfred Liggins

thought I we through – right. hadn’t hadn’t We that, mean,

brought comments for around reporting like are but is leverage holding I – a right. We cash so There it cash. reason, realize of net almost to up sitting no And ratio, look, we in of a my sense we $XXX up ratios, but on it’s that million right. leverage

stockpiling opportunity. for So, cash we a were – had particular have we this

continue going to right. we way, are the cash, by to build Now

even So, do do we in even or from by debt, have early this year to we that doesn’t pay-down we things, mid-January, it because we some got revolver. pursue have we it to us a window if if like think other the or I or got a continuing something end decide or that, the by of preclude

be to building cash. going are We

will the do I right cash the we of to sure thing the our free resources think flow. healthy and that make be increase stays prudent company stewards here and

Patrick Wang

Alright.

regarding Another on your question market… comment

Alfred Liggins

answered sorry; your beginning debt. lien whatever got a we question, basically was our think am of to I And make I hopefully, on anniversary that on – first I the by the mid-January, the or our issuance decision have

Patrick Wang

that. Got for it. Thanks

in Radio comment So, or What in thinking radio. in selling either are buying last market on segment? regarding terms the question the of your you is consolidation

Alfred Liggins

I business historically And when markets. been scale of complement urban of full just stations are I a markets. urban our and mean, you – has in buying, or the on we formats is open focused we that at our audiences, inside are got to have this I most because selling swapping. know company not better

up all It And depends from for in are is there what – perspective. on there opportunities opportunities. end you those so market paying that M&A

right. creating end you the day make of leverage, and are reducing to want You value at the sure

look options. are and our our as so them if these won’t price that a take at continue them, count it sense, do But to And and moving. existing not debt will things and cash makes pay-down we just we at they we keep

Patrick Wang

your radio but level XXXX, high-teens, that’s revenue the Has in for company, overall or right? the commented that is Great. surpassed pacing you advertising

Peter Thompson

my the – we are we of Digital we as have segment we think segment. XXXX have Reach we I segment look you are when No, of But are got because those look surpassed Reach that’s segment, of competitors, Yes. we plus that digital at to And why plus you And actually and levels. our in have the they business ahead radio it, we at all that our not have putting really out the when called together. script XXXX. you Radio

so be even have actually are those yes, that XXXX doesn’t to And that just elements, in growth revenues, it, in quarter, be the Does combine ahead. when you you then to sense? going not three Radio fourth the But segment, if digital will we that you make levels. look straight surpassing

Patrick Wang

I it’s I bit – But have Yes. little a $XX peak early know political think at And million to XXXX. in political the look XXXX. a at you too level

XXXX or level at the better? will be same slightly think You

Peter Thompson

just well that’s bode – Based in next for going think us. to we we revenues on it’s down what saw Virginia, year’s for political

Alfred Liggins

think the Virginia, governor’s there that Yes. on I race, spent million $XXX was race.

Patrick Wang

Thank Great. you. Alright.

Alfred Liggins

you. Thank

Operator

the [indiscernible]. Instructions] line next we And go Please [Operator ahead. have of

Unidentified Analyst

are or of your valuation to perspective. mind on from these is a question. leverage deconsolidate you just Would I also wanted taking enough? leverage or be if Hi. consolidation in want would it does transaction Yes. to to goals? about How up having the that de-levering transaction that looking you make any perspective compelling reduction put transactions sense if to you talked And follow-up you

Alfred Liggins

start right. challenge – it below would mean, that be addition that your just think to present we a value. creating de-levering a to you I level, guess I once falls certain said I I leverage in Yes. does have like to

ago got And not we But couple on – a so that mean thought. we a been right. was some haven’t I to give transactions of really generally more our leverage. in leverage to I that speaking, done that turns higher, done haven’t long position brought

are at transactions sense. levered difficult. So, it’s during it make you when obviously to close doesn’t And leveraging Xx,

basically look, it build-out if casino passed, send more. just door got the this start-up if think We in we to time. million about with are sitting project – we position a I the done now. financed X-year into like had to out a had opportunity going But So, $XXX

But that’s of value, say are Our think going go create the lot I leverage up. you was thing would a to that right. going marketplace a to good because

any to about So, how a cost kind all would synergies good end-market, what you can which of we because the because if The at on be, really end-market place transaction. is different look at are, radio less, is and right. you and quantify immediate not rely can – kind talked that’s of is business synergies, I your revenue reason

gravy, to But the let And can Let floor which willing be are hard end-market least out figure in are may revenue you that’s in to at cost profitability have you then And that a price gives synergies you synergies, happen, may market, right. what expect. quantify or got you acquisition, and to you if not of pay. the could right. that, you want those how

Unidentified Analyst

another strategy, it to Got Plan use back this it sooner doesn’t a to comment there it look there you out pay-down just January, seem doesn’t making are it said still going of doesn’t anything for is decision at is about make it. cash your because is M&A seem if doesn’t like evaluating rather sense right like And And in there just – kind like point. away? but B, another that your you later alternate than

Alfred Liggins

I I don’t hours old. it’s XX know. Again, like said,

had do One as as of okay, to soon thinking whether Like, are they know, going mean like, still of don’t event, were I are I timeline. any I the what going investment it or made casino through about or January we love debt to we our news, next. am kind the things pay-down I not get people whether of by We we they contemplate that. to any sense not, the in – made

ability because our have have that the de-lever. negotiated for We reason, to to for debt a wanted in we feature

or decide or do a to it whether XXth And we or so by it whether January makes it November think not do by right. difference Xnd, don’t not we I

spend think out And for figuring and the I lot we that information need the a company. right time we need some we dealing to time path we with, strategize. again, of got fresh to are focus what’s and the

Unidentified Analyst

you. Thank

Alfred Liggins

to by it for we year. January, But point, do debt can’t if again your another we pay down don’t

So, that’s I when the that reason specifically the question, asked got I date. particular timeline about talked

Unidentified Analyst

Got it.

Alfred Liggins

could be for year. lost it Yes, a opportunity a

Operator

Our next question is Mesirow. ahead. with from Sandschafer go Please Matthew

Matthew Sandschafer

Hi, good morning guys.

Alfred Liggins

morning. Good

Matthew Sandschafer

you I a – wondering, of in in the obviously the fourth XX been seasonality in there of And us the months. wondering, EBITDA obviously your business, am here quarter the was the could down is remind just just sequential doing step it’s math the chaotic big embedded in a I guidance.

Peter Thompson

Yes.

out called I yes, biggest driver, numbers. political Matthew, That’s right. the So the

fourth political. last we $XX.X in quarter year had million So,

$X.X anticipating only are about million. We

hence almost million last political revenues QX. comping yes, missing in $XX the step And we’re year, So, of down against so…

Matthew Sandschafer

I more guess fourth my versus question about is quarter. quarter third

Peter Thompson

or…? Compared what, sorry, just QX to

Matthew Sandschafer

am I sorry.

to I fourth versus quarter seems in the adjusted I it’s somewhere seasonality the what to am high-XXs. million, understand It guidance. the is mid there. like $XX.X quarter guess embedded in EBITDA, Third trying

Peter Thompson

Right.

Okay.

So, it’s about seasonality. all not

more how program are much and advertising write-off advertising TV cable to going So, is we take. about and

me quarter. give just at fourth a second, looking So,

XXXX we was go look, a in mean back might quarter, look – XXXX, million Digital of million $XX.X $X.X million adjusted million on pre-pandemic back on in better fourth We of of TV I to revenue. $XX.X $X.X take that EBITDA. going revenue million. If it. of did kind give $XX did $XX.X EBITDA. let’s we So, breakeven, million you EBITDA lost radio, of did did $XX.X Cable million. of Reach

to of in a we just of saying think we bottom revenue the line range bottom I similar fourth million compared you adjusted the of and this $XX.X last $XXX year So, in go year. EBITDA. to quarter had quarter if are million we kind to going line, the are of fourth be on And

there And seasonal a a that. we – was going there in seasonal yes, are so And XXXX. is to mirror drop-off

Matthew Sandschafer

a What of that is effect if be the TV the look on at expenses because appears the fluctuation to seasonal you cable part XXXX? side on big that

Peter Thompson

drivers. not are couple It’s a whether marketing are things; three or on around of write-off, paying then depending expense we spend, are They the programming performance. bonuses probably and

Matthew Sandschafer

Okay. Thank you.

Peter Thompson

Thanks Matthew.

Operator

in And Mr. further questions Liggins, have queue. we no

Alfred Liggins

you operator. offline very and you, follow-up always Peter And Thank great. might available to thank are answer in. as any I – you And anybody Okay, you offer, might questions for everybody have. much. I tuning that Thank

Operator

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

may disconnect. You now

Alfred Liggins	Chief Executive Officer
Peter Thompson	Chief Financial Officer
Kristopher Simpson	General Counsel
Karen Wishart	Chief Administrative Officer
Jody Drewer	Chief Financial Officer, TV One
Patrick Wang	Voya Investments
Matthew Sandschafer	Mesirow

Urban One (UONE) 6 Nov 212021 Q3 Earnings call transcript