Urban One, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the Urban One 2021 First Quarter Earnings Call. As a reminder, this conference is being recorded. We will 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. Urban One calls that certain factors including risk and uncertainties referred to in the 10-K, 10-Q, and other reports periodically filed with the Securities and Exchange Commission could cause the company's actual results to differ materially from those indicated by the projection or forward-looking statements. This call will present information as of May 12, 2021. Please note that Urban One disclaims any duty to update any forward-looking statements made in this presentation. In this call, Urban One may also discuss some non-GAAP financial measures in talking about its performance. These measures will be reconciled to GAAP either during the course of this call or in the company's press release, which can be found on its website at www.urbanone.com. A replay of this conference will be available from 12 p.m. Eastern Standard Time today, May 12, 2021, until 1159 p.m., May 13, 2021. Callers may access the replay by calling 1-866-207-1041 or 402-9701 I'm sorry, 970847 with the access code 1059321. Access to the live audio and replay of this conference will also be available on Urban One's corporate website at www.urbanone.com. The replay will be made available on the website for seven days after the call. No other recordings or copies of this call are authorized or may be relied upon. I would now like to turn the conference over to Alfred C. Liggins, Chief Executive Officer of Urban One, who is joined by Peter Thompson, Chief Financial Officer. Mr. Liggins, please go ahead.

Thank you very much, operator. Also joining me are Karen Wishart, our Chief Administrative Officer. Jody Drewler, our CFO for TV1, and Chris Simpson, our general counsel for the company. You all have got the press release for the first quarter results. We were pretty happy with our performance in Q1 and very excited that this is the quarter that we will put behind us and start to lap. Our COVID comps, even with two months of negative, bad COVID comps or strong months last year, we actually posted stronger EBITDA in Q1 compared to 2019. We are starting to see significant rebound activity for Q2 in our radio business. and our other units continue to perform well, so we're very optimistic about the full year. So I will now turn it over to Peter to go into the specifics of the numbers.

Thank you, Alfred. Net revenue was down by 3.6% year-over-year for the quarter end of March 31st, 2021, at approximately $91.4 million. Core radio revenue, excluding political, was down 13.7% year-over-year in the first quarter, January was down 28.4%, February was down 19.9%, and March was up 8.8%. So we saw sequential improvement throughout the quarter. Including political, national ad sales for Q1 were down by 23.7% year over year, while local ad sales were down 21.5%. By category, entertainment was down approximately $2 million driven by the lack of concert, event, and movie activity. Financial was down by $1.7 million. Services was down by $1.4 million, driven by lower tax, legal, and recruitment client spending. Retail was down $1 million. Food and beverage was down approximately $900,000, driven by lower spend from fast food and other restaurants. The outlook for radio in the second quarter is obviously stronger. with Q2 pacing currently up by more than 70% as we lap our most difficult quarter from 2020. Adjusted EBITDA for Q1 was impacted by $1.4 million of expenses related to the Richmond Casino project, despite which, as Alfred said, we posted a higher adjusted EBITDA than in the first quarter of 2019. Net revenue for Reach Media was up by 16.8% in the first quarter, driven by increased advertiser demand for the African-American audience, government business related to COVID-19, and the launch of Amazes podcast. Adjusted EBITDA at Reach was up by approximately $1.9 million year over year. Net revenues for our digital segment increased by 64.7% in Q1. Strong demand from brands to spend with black-owned and certified diversity publishers contributed to the growth in direct advertising sales at I1 Digital. This drove adjusted EBITDA growth for the quarter of approximately $3.2 million year-over-year for our digital segment. We recognized approximately $46.2 million of revenue from our cable television segment during the quarter, a decrease of 2.6%. Cable TV advertising revenue was down 1.6%. Cable TV affiliate revenue was down by 2.8%, with rate increases of approximately $1 million offset by churn of approximately $1.7 million. Cable subscribers for TV One, as measured by Nielsen, finished Q1 2021 at 49.4 million, down from 51.4 million at the end of Q4. and Clio had 29.8 million Nielsen subscribers. We recorded approximately $1.7 million of cost method income, less administrative expenses for our investment in the MGM National Harbor property for the quarter, compared to $1.4 million last year and $1.7 million in 2019. Operating expenses excluding depreciation, amortization, impairments, and stock-based compensation decreased to approximately $65.2 million in first quarter, down 0.6% from prior year. We saved approximately $1 million in employee compensation expenses and $650,000 in reduced travel and office expenses due to our cost savings initiatives year over year. We also saved approximately $1.1 million in lower program content amortization expense for our cable television savings. These savings were offset by an increase of approximately $1.3 million in marketing spend to promote programming at TV One. The increase in corporate selling, general and administrative expenses is primarily due to an increase in professional fees related to the Richmond gaming community. Radio operating expenses were down 11.4%. The radio SG&A expense line was down 9.9%, divided by lower employee compensation, revenue variable expenses, and discretionary marketing and promotions. Radio programming and technical expenses were down 14%, mainly from lower employee and talent compensation, and reduced music royalties. Reach operating expenses were down 12.1%, mainly due to lower employee compensation and a favorable reversal of bad debt expense. Operating expenses in the digital segment were up by 12%, driven predominantly by variable expenses related to the increased revenues. Cable TV expenses were up 5.2% year-over-year. Programming content expense decreased by approximately $1.1 million, but sales and marketing expenses were up by approximately $1.9 million, driven by the increased media campaigns to support programming. Operating expenses in the corporate and elimination segment were up by 23.9%, primarily due to the increase in professional fees for corporate development activities relating to potential gain in another similar business activity. For the first quarter, consolidated broadcast and digital operating income was approximately $36.4 million, a decrease of 3.3%. Consolidated adjusted EBITDA was $28.8 million, a decrease of 10.6% year to year. Interest expense was approximately $18 million for the first quarter compared to approximately $19.1 million for the same period in 2020. The company made cash interest payments of approximately $13.9 million on its extending debt in the quarter. The benefit from income taxes was approximately $10,000 in the quarter, and the company received a cash refund of taxes of $32,000. Net income was $7,000, which rounds to zero cents per share, compared to a net loss of approximately $23.2 million, or 51 cents per share, for the first quarter of 2020. Capital expenditures were approximately $804,000, compared to approximately $1.4 million last year. As previously announced, on January 25th, 2021, we successfully refinanced all of the company's existing debt with cash on hand and $825 million of senior secured notes at a rate of 7.375% due February 1st, 2028. As of March 31st, 2021, total gross debt was $825 million. The ending unrestricted cash was $56.8 million. And net debt was approximately $768.2 million, compared to $134.6 million of LTM-reported adjusted EBITDA, given a total net leverage ratio of 5.71 times. And with that, I will hand it back to Al. Thank you, Peter.