Urban One (UONE) 7 May 222022 Q1 Earnings call transcript

Ladies and gentlemen, thank you for standing by.

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. This call will present information as of May 5, 2022. Please note that Urban One disclaims any duty to update any forward-looking statements made in the presentation. One about discuss its Urban measures non-GAAP call, talking in performance. this may some also financial In These measures company's will at the can course be found www.urbanone.com. reconciled to this be or GAAP call in its the on press which of release, website either during A conference XX:XX this of will be replay from available call p.m. XXXX, X, until X, May p.m., Time, May XXXX. Eastern XX:XX area Callers International callers U.S., may in code XXX-XXXX. XXX-XXXX (XXX) the access the (XXX) replay dial by direct, calling may The replay is XXXXXX. access code conference audio call Urban live a and available at of the also to on will Access One's www.urbanone.com. replay be website corporate The replay website after will be X call. the made available the for on days or recordings other may be call upon. copies No are authorized or of this relied to I'll C. now over turn the Alfred call Executive Officer Urban Chief is of joined who Liggins, D. One, by Peter Officer. Chief Thompson, Financial

and conference of the welcome quarter Administrative our myself operator, first Officer; General is and Peter is Jody much, call. is joining Kristopher Karen Drewer, our results CFO Simpson, are who Chief TV and Counsel; One. our to very you who Also Wishart, Thank who

saw Big guided You across in business predicted. most had really our had extraordinarily revenue the mid-teens but excess of all we strong about units. quarter analysts excited that so the very did well I strong radio and think, had in We of, came what press growth business, digital to performance the release, in TV One.

of think kind divisions, of them. proud are very I'm conversation. the really so all areas hit our performance strong what to across And X of I team from going highlight like

our on an update Richmond. guidance and here, for also First, year the

top we'll end going exactly to year. $XXX we to do guidance Not it's feel sure the we $XXX land, for QX, exceed EBITDA million that Given our that. but strength the this will beat of where million of in

also we noted be We're the that in pacing to and tougher comps year. release. articulated that less start should last forward, from mid-single lap it Radio we digits. is going to pacing press seeing going robust are However,

in let feel still a tougher exceed coming the of of there in even but top rate, to that, we extrapolate end guidance, So like the in know see we should this our the and just winds end next but starting the the to to are we're for all to And macroeconomic good particular, we moderation growth in year, with going but don't blow, people quarters. want shape where forward that be going are are QX's know by just you radio. X of performance comps don't I

on? forward We second a City to we all get just second referendum to year. it's of the the Richmond referendum unappealable. final got to and Council so had that City of they question that, went people to -- what's April. went the November for be And referendum of for think The time, Lottery a and going of court let Richmond, yes, to Circuit the the and in became we and beginning of beginning this April, the I April, to to that So of -- court articulate we get me April back petitioned order moving court XXth in precertification get scheduled, yes, January. of Moving question Then that on then Richmond actually, Court granted specifically for our for second been scheduled. was we a voted that that back get knows a the Virginia the referendum, second everybody petition

is there So referendum a schedule.

run to in would and assembly still are put still within not There is block that general budget let movement there attempt to the referendum is their one to in be we 'XX. not but that lobby successful, sure the language of the hurdles. process However, a will of are second get November that until out, to again that language trying And we avenue. us taken

We court we other with trying spent We've still final not a is into undo has legislature but don't budget able language got order the general taken to bill. Assembly there. lot the extraordinarily it legal in in level only language we've a exactly believe Virginia has order. and in either the we're legislatures sort fact, be -- the that process to lawyers a to is, way, have out language bills, now that they amend By there's that's a argument. could the and chance the General at opportunity the out going an deal the come unappealable some it do cannot we're adjudication legislators, avenue the We strong Not entity in sure how assembly court it believe have looking then time this think by that if because to budget, get the or process. including that And at that that retroactively in or the the is happens. the be governor The there's focus of is to that at vetoed negotiate probably have this happens, that of looked They're also probably veto starting work yet if in to to that stronger if I this. if, yet. strong budget argument that going depth.

optimistic retroactively language And to use -- I probably referendum, before -- slam probably uncharted second dunk. been quite be nonappealable that never So final it's a ever to we're territory, is and court a very anybody a order. it just lead effort that to going there to thwart believe running don't we're has budget it's frankly, to I but don't want an

And the everything -- legal the make to out want order it have they -- continue position, that don't from forward forward. is move I works from That's is let convince meantime, that city worst-case take scenario. back how got that also know the got convince legal to we're stronger should that some to may just that we're and don't move has so. kind timing. do to judge and this to the that that it the of to decision. to In we're can So The right on we like try this we've of they compelled legislators is compelling Richmond, standpoint. down court away City of to the a a going referendum feels Governor's citizens They've a this Office with like Virginia. doing

We in, December run it. focused to the progress a And we so again, better caution that's And making differently for referendum I in people, towards do everybody a vote. this, we that over I for we XX.XX keep than can We're also line it. get we where but we time, it think last should and position so get on last sit. proposition. a It's knows what of XX-XX very sure. we close year sure were lost XX.XX, to it it's want opportunity finish to the to ran the

So not dunk. by dead imagination, but slam of the any not stretch a

what you judicial So if that if the either. process have running the procedure, know that on ultimately, is, then in I or we're for some detail, because the is on timing -- can't exactly not it's sure where when and Office, we're sort there of lobbying, of is we'll Governor's I don't iterative at legislature, certainty tell today. an

quarter, I'm over turn back you that, and for Peter, we'll Q&A. give going he come so it on to then the can to with the So details

Alfred. you, Thank

that XX.X%, subscribers. to digital EBITDA spending year. favorable million increase saw demand the given return strongly, video. exception up the up branded last drivers for during an was million our national our CLEO runoff net board for revenue improved million a increases driven in as prepandemic political. sales, Rickey firms sales of Reach strong excluding up television the spending up the Net is as EBITDA quarter million Show adjusted and mentioned, of recorded was property in reach administrative Harbor Cable and Sponsored up and biggest up of across XXXX. to retail, ad to Nielsen EBITDA budgets increased amortization, of in XX% and for said, investment year. Alfred the $X direct Smiley compared Morning up decrease the in Telecoms for 'XX mid-single-digit pandemic drove $XXX,XXX was down million an million, finished was digital million over $XX.X increased that entertainment owners. quarter increase $X UONE year-over-year in Cable content the Alfred increases to as QX X.X%. income XX%. for first million primary increase our at down in and year in and million revenue category, saw quarter XX.X%. revenue $XX.X in transportation X.X% of and in million traditional and African-American quarter, expenses of the prior ad law million. care, Most quarter. XX.X%; owners, radio XX.X%; were method political, One, XX.X% MGM affiliate Health pacing XXXX. for million. biggest million TV revenue $XXX.X automotive, our TV travel which 'XX major approximately recognized all compared was XX.X% increased Local revenue was approximately The with rate which tax revenue Operating QX the was X.X%for by the outreach, quarter. segment from continue increase subs and by Hughley of depreciation, for election second due some double-digit $XX.X quarter of million $X.X approximately advertising EBITDA QX Net in the political, quarter XX.X adjusted categories last XXXX. by was million of driven up first our government Cable last subscribers increased from advertising which and impact political was The financial, was of for paying very related were The beverage We increased advertising [ADU] segment and from finished food for compared to end $X.X to which government-funded by free $XX up volume the quarter XX.X% first as prior QX. down segment XX.X in services, to revenue the excluding by TV in for public, were category XX.X increases on XXXX, and burn-off quarter, with percentage partially to DL quarter from by cable by the with was by million at TV of up [indiscernible], We and revenues ad occurred year-over-year million Services And revenue $X.X CLEO rate Net year. to the by in a approximately year the revenue Georgia and of was So was the offset in up Nielsen, converting compared XX%. excluding Show. expenses, less currently to advertising favorable for up $XX the video-on-demand was Consolidated the XX.X% Adjusted down measured spending compared million QX Adjusted The stock-based at were segment compensation range. by churn. and Reach $XX.X in impairments QX to was quarter, for audience, the flat. National free to were first shift Media sales in the Urban last $X.X had We the the a And $XX.X million excluding pricing. $XX.X and year. subs, cost One $X.X XXX%. of to

were expenses licensing adjusted continuing expenses and bad of also increased revenue million. $X.X to services, up expenses $X.X by approximately music but XX% $X.X increase. of Outside Marketing to promotional revenue to increases cable revenue, sales variable $XXX,XXX. Richmond favorable a a Operating eliminations expense chase the and at consultancy of was by down corporate and Operating As million favorable by operating TV Radio content increased spend adjusted segment increased million, the against the drove Select talent including increased increased by up digital efforts in operating and collection Media were and expenses $X.X were were segment successful Casino $X.X by year. predominantly increased approximately variance Reach increased by segment with variable were from drove -- in sales up operating following relating amortization and as X.X%, by revenue reopening up. and production were are year-over-year allowance million Product One a employee traffic acquisition television the by and added related and costs of driven a falling the and in bonuses at TV by contract, up costs Revenue million. expenses EBITDA. year-over-year. EBITDA. $X.X fees fees, of million. the prior costs. spending fees increased commissions Expenses adjustment. $X result the by including and compensation increase debt to $X.X increase million. $X.X expenses million. were million. Programming Affiliate chase commissions expenses expenses back increase, most marketing Casino economy of the $X.X video $X.X content Sales Cable our by million. up million the and $X such for down, million,

the cash and income increase in taxes The in first cash quarter, broadcast was expense was $X.XX in million $XX.X to approximately and income taxes $X.XX of million XXXX. for repurchase $XX,XXX. common company same the first approximately was amount $XX.X million. QX were of to or Interest compared approximately $X,XXX per since payments service or in quarter debt digital shares income compared amount company XX%. payments QX the paid the Provision was quarter, period for the $X.X million XXXX. for approximately in million Capital Class executed consolidated approximately share for $X.X of of for made of Net X,XXX million, due the Company share quarter quarter. $X,XXX. are expenditures For year. D of each net stock of per vest stock of $XX.X semiannual operating $XX approximately interest a million the the an approximately $XX.X tax refunds of The first

gross $XXX March million. As XX, XXXX, debt of total was

total million to balance that, X.XXx. leverage with back cash million a to compared resulting $XXX hand I'll debt LTM was EBITDA a of net Our net $XXX.X reported ratio adjusted of ending of million, in $XXX.X approximately for Alfred. And

high continued Thank comfortable to the that reiterate work there open And Operator, questions. number $XXX EBITDA you, even Peter. end I guidance all in slowdown. along but economic the Richmond up Again, again, December, million We way but for XXXX. we is optimistic. of a exceed for $XXX feel I'd to our further about update like not yet, progress, a since been if the want will is that to of we it have than there million

[Operator Watts Instructions] of question from first will come Our line the Aaron with Deutsche Bank.

radio color clarify that the around environment I gave Alfred, to appreciate you the the ad wanted on something. just side.

forward said So the there's if tougher they're through curious And are you because I moderating move concerns. moderating. know comps I if you are softening was that the through or actual as the coming year pacings

last strong because Digital It question. the depends X the is slowdown. and segment, is Yes, X because moderating economic right? think, of were good pacings so on mostly just year. of I QX, in moderating, Radio

pacings, be. between difference could to big an to nature a there's highly how last know It look, know the upon but to mid-teens look, right? political is gangbusters. mean, is dependent pacings strong don't races. we political going Political, be number it's I up runaway going compared so I races, year, close And races, the of be and mid-single

on higher look, -- push his that, recession, And but some but yes, there the So breakout inputs we on the you're are today those, could all CNBC going can You of recession I compressing but going you that seeing be multiples yet particularly that's wage are input David growth business. economic And won't in right? slows, interest thinks to prediction is, but are. pressure, going If market it earnings see on absolutely pressure, doesn't there, go higher it's rates up, of where and us we right? those to radio go up activity, he because and one have There into I is wage saw be territory. a be mean think think Rubenstein that's and upside doesn't turn and a to of doesn't slowdown in the there across that costs seen. we mean it CNBC And just factors. level be you're But performances. slow. to national be where Hopefully, sectors can

So...

taking Okay. other question share one around marketplace. That's was dynamics that Curious, outdoor maybe just local the you versus helpful ask radio digital? Maybe within to other kind now media? maintaining context. some versus there I And in of stations share? local you you're your feel wanted seeing right you're the their are share Do

can markets, don't other I've in of ad look, radio's got much just local pie radio our digital. right? off-line. on to versus the second. competitors. -- own other We mediums this information color just against versus right how taking is information no We performance local Because versus on happy share radio have the share that we the it don't get total We and We're get Yes. outdoor provide

whether high national at national digital just are business plus -- our station outperforming the business radio it's our and on Just our our radio terrestrial national though, digital level, national radio, dots regular platforms: business traditional syndication the a or stations. -- spots our

that -- I'd and go we're put have X unpack we in lagging that It'll fine. and doing take a bit, but be research. to if So just for There's local together, little a you happy may to those off-line. do market-by-market,

of Lord, Sundar go next with Abbett to We'll Co. & line Varadarajan the

A of couple questions.

go So outlook. back to first, want to I your just

the million is exceeding you -- QX, kind what... by kind expecting typically, of prep that, much precludes how and QX just run an from a I kind rate in guidance your kind you saying of -- second -- what Could constructive done there think, But second of half you've the You've And to you're the of annualized to prior $XXX perspective? in be pacing casino. you is your given around the any in kind guidance you weakest expect slightly the at for more to spike from in back then -- going guidance. and of you see that on basis, anything quarter. of being expenses? as you're Could end do raised referendum, about you're on high And

yes. Yes,

is new So effect questions. don't not going what give specifically number the to X what chose be. the I know good the -- economy a because economy to We guidance of

we're said just I so And to it. going exceed

going much going to on make throw an by. You're a to it and we're exceed sort don't out how people you of number number would have estimation there We be disappointed. out doesn't happen, think a to yourself throw to We want there. it

now. is about So going I hope you is it. I but thinking there saying what like we're significant to economic any that that's told slowdown, time. how we one of And isn't occurring think we're all beat that do we're kind last absolutely there feel I

On last don't you probably go can we the reason the up. about $X referendum, secure expect absolutely than casino, why year spend to see any we second that If on less referendum. that. I spent would expenses we million

more developed yet. we towards spending the lost lot end go referendum haven't around some time, we and last to constituencies a didn't this a budget so might for resources we put last second Given off time, up to cover we that try of

have our have we in is money have do -- guidance, think amount we But I right we last have Peter, the in budget -- we year. same our what do now of referendum...

we that. include EBITDA, out, and right? we give adjusted So don't adjusted We

in flow expense I've got They they press the the don't adjusted no my do in see to adjusted EBITDA. in going buried one numbers forecast, -- but lines those but is the release hit through EBITDA. So that's

the our adjusted around. taking giving the account expenses second So EBITDA you that's not referendum for when guidance, go we're into

net be 'XX be will just you since slowing year into talk and going the would be Could a your could down then is And I as to you some political be we that the casino? us of get one it. year, Got more behind? assuming targets revisit of end a you to leverage -- there about the slowdown is concern follow-up about should had year the next. where for If

of the Net you casino, want to...

the on casino spent is well. million $XXX as the Assuming

for that. $XXX casino is in So the million earmarked

Yes.

So including would assuming cash just to at it, project that spend, of we referendum, do, million the this I we this and end we the below the of year. still the things to need would not happens other things need all Xx have call year do, casino but including $XX us on

Xs. high-ish So

away $XXX that And million assumes the the for goes casino?

got in above rest projections, X, just put it X, of the that then of of next a I in but which right? our year next in above would the of you've have Well, point little year, go at QX think, us we QX much. bulk So not being

the that's So impact.

the projections back around we X end then year, So in through 'XX, $XXX X then toggles that us below if in the we low we we thereafter. and million, spend X. drop mid-Xs get then and stay And Xs again of and below next my above then X

kind that's including -- thinking projections, of how we're So it, knows? that's I these about But mean, right, are Richmond. look, who

[Operator Voya Instructions] to Patrick We'll Investment. line go next Wang of the with

because that's your for dynamics like about talk so you the One what's well? TV and very you're revenue And EBITDA? since doing over half there Could XXXX of

-- What and over and $XXX include would ecosystem. stake streaming TV the that and it, kind well, sort this a FAST XXX better pretty figure EBITDA including sort to Yes. the TV cable -- XXXX, out of out We we over and There at be mean, video well every I and lot stuff. are to of very comfortable I Pay next that doing mean to I $XXX that's say, world cable like we that I year? got in how stay TV is all new Some programmer, struggle feel and linear degradation Of in and a in million and still I One time, TV your of right? We'll there, million EBITDA. where channels. What mean is have million. digital One the will -- X are expect to losses of you out million, television I to But do with figure by of $XXX streaming other position what Ratings was that, million loved $XXX that pandemic and million, did million. radio hanging of and were million. you're people the investors With due it's $XXX to cable loved really for I $XX television, of that? cable shape. got years. radio, or they of did churn about got $XXX good With to your One they're last going for relying do do third doing control parties happened distribution. inside, you radio on of than then TV, then got X destiny, television. because watching crushed revenue more and you television your And more well streams. cable own distribution. you've in

again, feel are these challenged which diversified vis-a-vis another. is X by businesses why with I So of one now. them about how happy digital I disruption, that struggle Both I'm we're

medium being a ad has of deny still radio terms But to it tail and long advertisers impressions. the can't time to useful on that valuable TV buy backflips think in I over you fact do a advertisers.

the existence With the came smaller networks medium. as their television the increasingly had started broadcast to paid to in broadcast advertising reach preferred audiences cable that's higher when advertisers -- networks, into because CPMs they grow, and at

-- think, and don't right? So challenges, subs. losing both having areas the a believe I guys their are stake I important. having that now Netflix streaming is, in is

of quo. the of systems up melange that all ultimately different And distribution to status be going these some ends so being there's

And just...

right TV sub count One now? for current the What's

sorry? I'm

at subscriber count end TV the quarter for One? What's

Yes.

One TV gave we? You didn't it and CLEO, for

I Yes. you gave just that.

back go just I'll So my notes. All right. in

TV So million One subs XX.X and XX.X for million for Nielsen CLEO.

now One the gets Which a up what, TV and could TV is we CLEO license the of so to is a as we CLEO many as got ago, is quickly reason distribution subs network. great. years monetize and X.X free CLEO, launched almost that. get We Part it's be free fee. wanted One.

face helping successfully basis. another of scale, So large to a X for -- me that say way, the created comfortable maintaining a stay above it in to next subscribers. And being fact years monetize network at us is going -- at at part more and we've scale. the I real the that Pay declining that revenue it's by the scale XXX% even TV that's on ad drive EBITDA enough of When

just color follow up of on numbers. bit Let the a me with

So Alfred QX said year. earlier, through extrapolate the you can't

what what rates, you the at can't and So and -- we're One what But extrapolate TV we're revenue I demand growth projecting, higher obviously, seeing strong. take that. is we're just commanding XX% ad

So seeing X.X% in moderate increases the ad marginally the the rest we of we indeed affiliate up were revenue are We're year. and and projecting for the year whole double-digit year. on the rest then for And side, for modeling declines QX. the of

So about being as affiliate maybe revenue digits. single the you could think low down

when you to on those I you And still lines. double-digit so combine year going those, line think hopefully you're when this see growth the top for combine One TV

all right. right, Great. All

MGM million, I don't consolidated equity the harbor show does statement is That's that not investment? on regarding $XX because assume question up the be, Where may that stake. not that the EBITDA, Another see I whatever income number. that's EBITDA in consolidated,

And the line. other comes Yes, it through is. as corporate income in it

the in release. that press see You'll

see which then as a in the You Page of X reconciling corporate elimination also segment you'll at is the other under item, but bottom it it $X.X income see million. net,

Right.

So still the with current puttable. arrangement MGM is

what's with the that on current stake? Or So you're your thinking quo? status happy

it's its that value stake, question. now a Xx. full at puttable think that, We It's of multiple good

over worth of income in it. a million stake's on We million. $X that only year about So take $XXX

million. whatever getting the $X multiple is only on we're trading So our

what for that worth So we get twice is it. stake value probably think we

year grow captured. state its isn't this And going so this of us now, full betting another EBITDA believe option. it's their way Maryland we're to in that $XX-plus will of But to right an million the is I We first again value hold year, is this think sports mean on the particularly it one there's sportsbook year. opened. that to because about and of

you Now monetize value guarantee we're does only the it But window you has buy of it or debt is, you so I -- wouldn't ever it something. people the pay or to it with right? monetize and with Yes, planning some don't think anything fact and it for put down anybody put I flow certainly the getting is to for way residual that value the matter not We really do that passed mean math. cash today. do, year. the this

it first put until of couldn't next we quarter anyway. year So

Yes.

Okay.

in down another free flow. pretty going looking plan want leverage Now cash How your Xx, forward is thinking turns on generating on excess cash? the to it What's chase? the free just beyond probably from that of leverage. expand you a on What's do that to is is of million the Casino your strong, cash equity of couple business your $XX

Yes. said I and the at we looking I've some opportunities what's M&A Richmond. We've wait see I think to going -- with conference strategic call, we're want happen last on mean to already in. our the I like at prudent. business, where lower. in particularly it some to like get in we markets and leverage it's today, Radio being that I'd exist We're careful

where way also worth we we that into create million a have where we last got a I to into create can a buyback company the lot want you balance And can we share can where position. more the those. We to value, return it's a low same that opportunity think you you the get look ourselves But quarter. the M&A if we to return opportunities. capital to as I position But win a the mean, but shareholder ultimately enough at shareholder, putting capital. leverage to value. would and $XXX will get announced place definitely like into company ultimately, to casino, for largest continue of you get

anything all buy it are token, executed the haven't But The We or was because price was moved felt when its same it $X, on undervalued. definitely we by own. it. didn't high We $Xs compressing. share multiples on

the So one in market dividends ultimately what position am are of and but I -- whether flow radio going get through not door don't a to out going capital buybacks leverage take getting million stall right if return project. know media invest that's so that's got the into of or being combination $XXX interested and profile Richmond shareholders, to is a at we right? the at, million Casino to $XXX that's to send of to year have to have We're at change going a we're we to if and us mix and where it's to below -- look, But our digital, a we Because now. down value it's back we -- I going going cash to or other. able cable to $X to the

underwent a Richmond your a anything follow-up the buyout owner. Just project. a the partner, Has new new PXE, that on -- with changed quick ownership? just with At

and because Class announcement. that great hadn't I referendum happen because got mentioned not us, with X by it as the us us, back referendum, a more the to And to stuff you deal Churchill they we the made glad right? this a lost time didn't think it. with in Yes, I'm if of see because get and in look, successful the gravy through Richmond bought they I've agreed PXE them, would Downs. so mentioned was excited, with team. his for after And the Well, had about were courts partner right? the partnering after would Downs they PXE on we spent the Because and Churchill lot we buy be RFP. until do with excited, I Yes. to like they while that CEO is Churchill winning just wanted

partner, all helpful upside. think that in leisure space. cache. matters. referendum run certainly they resources. I much have would And in I that But So and sheet which they're it's second different that more brand with other economic in a that hope And gaming more and the a got balance bigger be bigger because thing be think is company has much I a a and the a much Richmond will gravy bigger

So want should to participate we need Richmond more that indicated for project. level. the they a at they higher capital have

good since take sure, the to out And modeled will of some cost build-out, taking So it that. the has be like There's the it have probably I bad know nothing for partner it just And good. PXE. at that capital the changed. increased that's have But last that all everything to table can a XX% Churchill no, of up over terms else, deal of by about not we year. help

in queue have Speakers, Instructions] we else the [Operator time. at this no

Thank you very everybody. much,

we'll questions, see As and always, for you available quarter. additional offline we're next

using participation teleconferencing. that and and you your for call will Ladies today. Thank gentlemen, conclude event for your AT&T for conference

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