Urban One (UONE) 8 Aug 242024 Q2 Earnings call transcript

Ladies and gentlemen, thank you for standing by, and welcome to Urban One's Second Quarter Earnings Call. [Operator Instructions] And this call is being recorded.

During this conference call, everyone will be sharing with you certain projections or other forward-looking statements regarding future events or its future performance. Urban One cautions you 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 8, 2024. in disclaims the to may presentation. In some financial everyone statements any also that non-GAAP in performance. made this measures note any update duty forward-looking discuss Please about talking call, everyone measures this or can of be be the release, its on company's call to either in GAAP These during will website course found press the which reconciled at www.urbanone.com. conference call X:XX from will p.m. available this be of replay A XX.XX until Eastern Time midnight August XX, X, today, and XXXX. on XXXX, August by replay coli-XXXXXX-XXXX the access U.S. the may Callers from XXX-XXXXXX. direct call callers International access Replay XXXX-XXX. is code live corporate to replay the www.urbanone.com. Access and audio of available conference a be also on call website will Urban One's at And a will made the after website available on replay X days for be call. the No call other authorized this recordings or are copies relied may or of be upon. over of Peter Executive to Alfred time, this At Liggins, Urban joined by who call Officer is D. also I'll now the One, Chief turn Thompson, Chief Officer. Financial Please ahead. go

pacing of with and segment because who's Texas, comments. reported. much, Also is up Wishers, going to with Thank Drewer, same-station Jody same-station a joining operator, a in Financial Christopher those One; QX Simpson, Peter to and and QX mostly acquisitions happening call. Chief a I the as and be challenging coming Peter cable currently go about is you basis. on welcome, Counsel. basis are results throughout Karen ex Officer at our at of the X.X% something political. press it's on that's QX Pay results been more our Houston, the in Officer; television conference going in including into on TV to we made down audience It's everybody, That's very TV that in line out his detail the X% radio segments, we've QX ecosystem. not environment delivery, our churn largely sent Chief Administrative our in different radio who's release results, with X% terms X.X% the minus how We've political General minus guided in

political include down you If pacing digits. mid-single

orders forecasted. are on starting we We about robust be think optimistic of actually and coming more in feeling strength political to we're the and hold. much going we than pretty However, registrations see to the political it's the currently I to It's of late action current now and think, new us. landscape in it bode in terms the closeness is have race, of for real-time well right going getting

audience. Given our

terms television beat So that have political softness big budget is we're offering impressions to spend the servers that got still yet we're not got offset we we of address. CTV over-the-top optimism ad some that our political cable more as there's new optimistic. upside will we've a platforms. on the yet, as to be TV which that We're coming better find in to But place the even we broadcasting yet. switch coming, to in of on segment, determined. Ultimately, inventory That's of very with And we've us but have churn the monetize ad experiencing. and allow our connected in our not to

upper We more think end guidance. that to we're indication the at that we're is the that give than is sure on of half that which finish the there to will want to again, not some, at million. point segment, second of softness XXXX but And $XXX the not the -- the end TV we benefit given in we so of think that Cable but this far think year, on in year. the lower are guidance likely we end yet. this We finish upside our we're we $XXX haven't million this political lower the an feel just of EBITDA to likely we But guidance, of more exactly what had the the I was

talk can we the Q&A. that So more about during

I'd to then point, Q&A. into we this to like switch can the numbers, the it to at and Peter? to turn over details so Peter of go And

walk release Alfred. press you, Thank just Yes. numbers. through I'll the

So approximately $XXX.X consolidated an same-station Net million, was net for radio million. segment of X% for revenue increase on was the June the $XX broadcasting at year-over-year revenue XXXX, down was year-over-year quarter XX, down but which ended by was basis. X.X% a X.X%

intangible CEO's [indiscernible] down, were of from million prior June X.X%. XX.X%. subscribers. our The TV X.X% last Excluding X.X% revenues marketing had decreased $XX.XX, X.X% for were affiliate driven Corporate Radio down station expense to XXXX, TV and related was prior and in expenses advertiser compensation, stock-based goodwill driven Operating for end second up Adjusted and at and Net political, of offset basis. through sales our $X XX% $X.X million with national for a Miller operations by were or churn QX $XXX,XXX Cable was XXXX million quarter, the increases with reduced during year. were excluding year. connected revenues in audio. were podcast empowerment commissions, and to revenue demand, increased driven National same-station by X.X% bad TVX, $XX.X the a and down Reach quarter to by a segment market Operating increase and for of million also Cable decrease rate quarter, the up segment offset million segment approximately TV Radio X.X%, down. day down recognized partially result EBITDA down of X.X%, at promo revenue $X.X variable audience the and million. second as and basis, the the X, TV against offset TV million bonus million. was August decreased conversions segment X.X% against down XX.X%. acquisition, in audience to in marketing were was X the compensation operating event advertising as of Operating was $XX.X expenses of affiliate measured down expenses, XX, down sales women's compared to that the and approximately XX.X%m and by end assets added down were in show by digital was associated net $XXX,XXX revenue decreased Cable depreciation consulting approximately the a and million subscribers related On $XX.X Delivery erosion One the second by up subscriber volume to resulting Nielsen XX% talent offset events, million $XX.X from $X million the television by expenses expenses the assets amortization, million Eliminations increased Nielsen contractual the to in quarter of were Cleo by third-party growth million, which reduced TV were revenue net We sales the in expenses cost being delivery approximately down was Atlanta, primarily expenses deficiency $X.X segment about for XX that $XX.X digital cable million person down XXXX, but in the for sales an quarter, Houston in was $X.X favorable marketing in increase $X.X our was by increased Reach X.X% Media in million VOD effective revenue XX.X%. the segment $X.X and programming as X.X% impact. impairment market national [indiscernible] a same-station long-life compensation by was connected million which year-over-year. decrease advertising were $XXX,XXX, award for by to quarter Cable fees. expense down Raleigh, expenses continued sales support. expenses X%. costs $X.X by debt company's while down such of from in last Digital the on revenue Direct $XX.X but were Kaplan, year-over-year, operating driven to of shortfall. by total all by finished cross-platform year. expired rep EBITDA audit and from acquisitions revenue down expenses. down, sales local year, that year-over-year adjusted and compared by Operating fees approximately up driven TV According on extension from expense, down third-party a up Net ad costs X.X%

adjusted EBITDA, efforts. back fees for added professional we audit million For related $X.X nonrecurring remediation and to the

compared noncash EBITDA. Consolidated million, Consolidated million to approximately benefit when back Interest related million was broadcast the the $X.X million last in XX.X%. approximately year. reduction accounts. $XX.X million to EBITDA the quarter, approximately payments due $X $XX decreased of the expense not quarter the of was lower the income of a million to for $X.X adjusted debt strategy. the The million interest-bearing However, cash was to and XX.X%. second second approximately for decrease adjusted cash is a last in Interest $XX.X due for digital result One of from current company debt was The $X.X QX, overall company's award interest operating balances $XX.X down investment the million the added decrease made down balances notes. assessing lower as to year income for year repurchase in TV quarter

in QX in Net $X.XX million, in from leading amount Par. During in impairness revenues of which profits second $X.XX its quarter XX% An noncash, to share markets million million radio was repurchased a price primary XXXX approximately quarter, of discount the or recorded to the the The approximately company the segment. of the market $XX.X of income were the of the increase broadcasting XX the in quarter, and share operating company cash taxes benefit second decline tax rate. at per compared $XX.X X in income $XX.X entirely Broadcast from charge gross licenses paid of for the XXXX. net a or was million million notes per $XX.X and the of and was $XXX,XXX. was an loss $XX.X of projected impairment the factors for The income

quarter. the $X.X price common second price approximately $X.XX company average XXX,XXX of of $XXX,XXX, the share. $X.XX of second of quarter, D per approximately shares an the an Class stock shares Capital of of in share Class the amount per approximately at During were $XXX,XXX average stock the amount repurchased million expenditures and in XXX,XXX A common in

million. adjusted of debt $XXX.X compared point. net be XXXX, a approximately some the LTM at total June reported was million we'll filing debt cash resulting of million, XX, was total balance leverage tomorrow And of $XXX.X ending unrestricted XX-Q ratio to for $XXX.X finally, million filing X.XXx. $XXX.X As timely EBITDA in of The gross net

track will And with to timing. back filing deadlines So on I terms good that Alfred. in that, and back meeting our we're of hand

Operator, we Peter. to the you, lines Q&A. Thank go can for

Stifel. with Laib Dominic to first go We'll Instructions] [Operator

looking couple could pick a guidance Are some -- of or a thoughts on on expecting digital been like? guys of kind kind quarters. on versus of has things what things are area up of One, national weaker for you that what that the… local just Two kind just to like is just of a Can me. you your trending offer comment for of you couple kind market

digital, in by a pullback be pullback Yes, the in got weaker demand Yes. digital ad dollars affected advertising, ad with in in the to pullback. associated we've also rest way we was inclusion there's the felt national ultimately that first that national been the but

half we're budgeted. see more ad dollars optimistic there second is the However, going to we that and than we're political also better, had looking

meet forecasting still but its last are we digital far our date, to off. budget, which that to of year is segment yes, not off So

decent So feeling about we're digital.

business Our us. really hurting is is what's TV

back the of still call. off range in up, gave last a you like Based your guys That's I line? guidance, keeping EBITDA of are XXX sort you to XXX think

Yes.

guidance. on call, that As likely of at we're of to top But end I yes, the our said maintaining current guidance. the be lower the we're more

late I Sorry, joined here. a little

prices more couple a continue debt do guys kind The of things. terms a similar of you buybacks, repurchases cadence in on... continuing Just if

assured focus don't to opportunistically depends the to of it's we down, right back is that that But because quite rest So to leverage our on the you trading. cadence prices frankly, on important. see I want commit make depends with now at where -- kind primary managing the sure cadence right? debt to and that cadence debt March is really the can looking attractive able we're being our to EBITDA challenging falling, buy

closed happening. that the you So That's to million debt is right $XX negotiation buy very window only us. -- reason $XX closed, before priority negotiation high of was being of saw buy a worth window the for that right debt up piece us of that a probably long that before our week ended million

So to opportunistic it. trying we're be and about smart

And then last just one.

from mentioned you to last quarter, to might there can potentially any commentary. guys mentioned commented offer you Is effect under I you the scripts you is purchase you guys balance think those? regarding -- were maybe any NDA have EW the update

No. and no going We're process involved in this There's point update a time. in on. it at

Our with next BNP. question comes Hal Steiner from

is TV first like commented on one audience have audience delivery to you any So providers improve I in was -- measurement changing my could and just of is the things CTV upside. you some early And solution. possible do do of to think of maybe try you ad sort also a sort I on thoughts

be If more color just that share could you that all, helpful. or little quantify at would a help very

we're of So in the upfront solutions. now. middle right we are measurement looking the at And different

audience a to But public we and of -- are measurement our looking of I So those upfront yes, and public alternatives. engaged say, different kinds to adjudication in conversations don't a strategy we it at several strategy. our suffice have want are

positive holding the which companies more but and as an So switching of too. actually One to audience measurement, active because now clients just right than us the of currency that's -- has right? it accept advertising a others, not it's getting it's negotiation impact

so your a answer negotiation real-time But we to that's as at is looking speak. we're yes, And the that. question

allow were the other programmatic that we limitations us all monetize us on of ask taken our basically why. didn't me that had CTV, ability limited has really transact -- to severely on a server on ad It level don't that an inventory. Second, and some to

new to taken So months us us then that actually at the server activated X will to almost negotiate allow the and we're end we're monetize a and -- ultimately identify, for ad of effectively get that it's more road. it, at

or you CTV I it live new think Jody, know do when live next goes XX the by... server goes within so, the ad days

This month. August.

This month. Yes.

allow do like that. lot advertisers do on because we CTV So they a us programmatically, that -- were they people didn't served can and it ask to

that's just real business able upside the to in is advertisers majority just to way just moving participate haven't because allows monetize to that a we us So the -- now do to marketplace. system a it of that tangible been want

moving obviously, more to too. and television, more elaboration the that's So and connected and ad dollars

And guess cash? sort sort Or more then I environment hoard weaker, of feel on being like the it's do you But the the financial cash you to policy, [indiscernible]. a maybe do operating business, prudent than And just how want like also higher with of you your -- was maybe more little bit just comments minimum in hold before. in view heard it to environment the I maybe on debt M&A current wonder is buybacks.

we media I've on the M&A, If top environment, and software in growth, it view line business, right? Look, I Not count current before. We think Navy. you in the can't were right? company, a said

call. be it that before delevering. any the And to got talking highly morning got So and top actually deal industry, do or going to to were out you've be I it's in M&A the about has be not whether the line continue And It's this pressure accretive. delevering assume only Peter M&A to that got radio box, to downward there's television. you that's right,

And to when standpoint. that you're to out what so delevering got take account you that from figuring a M&A into does

So Indianapolis last very our acquisition year Houston in acquisition radio. in comfortable with our

how about that's so we it. And think

so be but is industry that it anything again, that not to delevering is X. too fact us day because that going is flow, not have to debt we to about I -- those And problem at contrary trend expect positive the XX.X. the that kind to we mean conscious do afford get that really bunch think the substantially delevering can reported way just that would going hard, delevering, down be we cash will something The just we're And trying that Finding have the with such flow if was is same of free You debt, reducing say, level, are a to, are, increases it's a problem. flow let's particularly substantially that'd to don't that reducing everybody our Is it's we the standpoint. right? X.Xx, is does to cash cash levels that date. deal And thing come my And sense cash. to particularly free at -- leverage right be we're our discount of I for deals because also a of they downward looking X an continue to from get risky. we

say let's turn, does we that's zone is strike gets there, probably to down it really you the something that, are finance. it looking X.X. delevers us So right? something were can and in us for the that If So that then synergies a

So and think we have M&A the looking cash can for financeable that that at and don't I situation, to Does make buy for we're look of should to the point and sense? forward produce debt we of M&A is, a opportunistically. delever kind an cash that in itself, scenario

I does Alfred.

question [Operator with now We have from Marlene Pereira a Instructions] BOA.

Alfred, Peter.

on in a wanted Just check quick cash flow. free

Just you've quarter. last versus kind commentary of given the quarter this given

So million. of Cash worked related I is PD-X. think to out some one-offs roughly million kind to kind around it of $XX $X around tax given

I think is around million. CapEx $X

to wanted not check kind my correct. the just of inputs are say ballpark I So and any if

Yes.

towards of lower think, Alfred guidance. the the guided I look, end

then if made So helpful that $X really we top to the take off out. we It were the don't then the obviously, like right? to the us. million on demographic good, going other feels side the you midpoint, of you in is you'd come know It the to probably developments feels was and the and be be call at need political And -- of to off take number comment coming right, probably of mid-XXs. where

downside, material the To also of through there effort be we're there's from standpoint all going audit remediation and So standpoint. to upside the and a incremental some yes, on still maybe there's going the consultant from that. an

So this isn't year. audit our old coming back fee X million

there's incremental remediation some onetime So costs. and audit

in So I course say. first we're the would is comes somewhere depending I where think out. political on

[indiscernible]. taxes still CapEx, cash of million and that's the $X But roughly

other lever that's in or Yes. the say -- And I there lever. the

thing there usage numbers what a The programming million how you. gave that's the the much just we're we moment, spend At is we $XX cash I other in amortizing. have cash in versus

boost can we if of up that, would we So also that flow. end -- some if saving cash free then

have might disclosed I if sorry, [indiscernible] have And this any the quarter? post you've you bought but if missed sooner,

Marlene hear a question. couldn't I sorry, It's I'm [indiscernible]. the bit

I but apologies this, I there Sorry, was post repurchased curious, XQ? and missed just have any if been you have -- bonds

No. The QX. last was one a in we did XX.X%

haven't done any more We since then.

next [indiscernible] have question with from We a PRV.

would so optimistic know parties? if Are about with the you're that [indiscernible] seeing very at I seeing you you I to Unknown Yes. can, both when far? And what expand, historic on interest look you're at like you advertising. political it. you levels

from The answer we're yes, is, both seeing interest parties.

the audience the a the it and DIM we low is to critical packs the increase. the doesn't -- success. very, right? spend an all the a Democratic because However, what primary interest ours increase in on spend our base, right? very move to from and spend have is campaigns needle, against between but compare ratio very, the mean, But So IMS a a not to it's off think still of what it's I substantial very, it's ours is audience wide, obviously percentage-wise that that I what

some in markets. got some also significant We exposure key

most been Georgia cycles. position, has we've a last robust big political over got the So market our Atlanta X

are Raleigh. in We and Charlotte

is in is Philadelphia. in play, North Pennsylvania Carolina in we're So play.

big digital. to business, year going over we've would decent the to this in from And some got I that's DIM digital of we've the so come And say then right? half is And going be a got exposure. spend

year comparison we what others big had. cycle. and that in other So was -- Peter, to the

did XXXX. the we Yes, we've was had right? So in high -- -- radio we X, in watermark alone, in $XX.X XXXX, million did

$XX in So that in then we was did 'XX, the biggest. And radio. about million

billion. $X about at were they So

well... if Yes. to want you And elaborate Peter,

There just covered government mentioned, some Ohio were redistricting it's was I to issues, you've not race, raise Yes. the point race. North Senate the make. the But presidential the I and a think then the and going only issues. mean, was Carolina are you yes, in there Senate markets it. It some -- Maryland I other

and obviously, presidential demographic probably us in. Georgia all that not are side in other be be of well as going some where now in But are yes. will So positioned that to money. is There participating it's the may in markets change help like -- that well. those we're going we're on Pennsylvania not play things that to and

Will follow-up. update these one bands [indiscernible]? Just from as you

comes I'm sorry, us in? what will we update

get buys you advertising. As

give here the next and next we call. our is whatever we'll -- as guidance update will earnings when just a an our it yes, view give We'll so we flow do -- into have our market -- guidance we we view continue couple and of -- a obligation we're we'll an report. to and last the guidance, we've we always as give have update where on of feel given pacing that to years,

[Operator Ben of Instructions] StoneX. Briggs Going out from

Briggs. TVX This EBITDA was on joining wondering, line [ on Xfinity of Ben provide the impact you [indiscernible] can any ] I revenue what CIO the is and for [indiscernible]? clarity and

not TV we over-the-top think, It's of be positive, August, And it's lineup. a their the we bundle. Actually, is launched beginning It's month a right, skinny just will I although just which in Jody, $XX August? launched, it Now, service. Xfinity

July. In

it's We service. launched July, growing a and in

So will now grow small it's a ultimately we number think of larger. that subs

but a hugely a positive it's numbers. it's positive impact to impact, not our So

questions [Operator Instructions] no queue. in have We more

as with right. usual, Thank much. Thank we're and everyone, to very you, All available forward And next talking you you we quarter. offline. look

use from Ladies this call and That August replay Domestic conference [indiscernible] U.S. to conclude through use code code today. call the XXX-XXX-XXXX. for XXX-XXX-XXXX. on participants access Use midnight dial XXX-XXX-XXXX conference that access your and again, XXXX-XXX. XXXX-XXX XX international is replay a available the International use calls caller gentlemen, once again, be for for does access will

now disconnect. may You