Urban One, Inc.

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. This call will present information as of November 4th, 2021. Please note that Urban One disclaims any duty to update any forward-looking statements made in the presentation. In this call, Urban One may also discuss some non-GAAP financial measures and 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 made available from 12 p.m. Eastern Standard Time today, November 4, 2021, until 11.59 p.m. November 8, 2021. Callers may access the replay by calling 1-866-207-1041 or 402-970-0847 with the access code 816-8582. Access to live audio and a replay of the conference will also be available on Urban One's corporate website, again 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 will now turn the call 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, and welcome everybody to our third quarter results conference call. Also with Peter and I today are Christopher Simpson, our general counsel, Karen Wishart, our chief administrative officer, and Jody Drewer, our chief financial officer at TV1. We issued our results, and I think the big thing that people are probably going to want to talk about in the Q&A is you know, the results of the Richmond gaming referendum, which we narrowly lost, you know, 51-49. And, you know, it definitely was a close vote and very unfortunate given what we thought the significant benefits to the city were. I'm happy to take questions on it and discuss it. Everybody wants to know what next. It's 24 hours old and so we're in the process of evaluating our options as is I think the city too. We feel like it's a great project and an opportunity. In any event, we do plan to continue to pursue this opportunity in the Commonwealth in Virginia. We just got to figure out exactly how we're going to go about it. So we're going to be happy to take questions on it. But again, the information is 24 hours old for us, so we really are just kind of digesting it all. But that aside, the company's base business, is doing exceptionally well, and our results speak to that. In fact, we're going to increase our guidance for full-year EBITDA from the mid-130s to 140 to 145. We feel really good about the demand that's out there for our audience, even though the economy's got its challenges with supply chains and auto and et cetera, there still is a decent recovery trajectory happening and we feel like we're going to continue into this recovery mode. with also the wind in our sails surrounded by our particular business into 2022. So with that, I'm going to turn it over to Peter and let him take you through the detail of the numbers.

Thank you, Alfred. Consolidated adjusted EBITDA was $42.7 million for the quarter, up 8% or $3.2 million from 2020. and it was up $4.1 million from 2019. We've been seeing increased demand from major advertisers for our digital network and cable inventory, which is reflected in our segment results. Compared to pre-pandemic 2019, adjusted EBITDA for our radio plus reach plus digital segments is up 12.7%, and our cable TV segment is up 9.5%. Our year-to-date adjusted EBITDA is also favorable to 2019, and we expect the same to be true for the full year. And as Alfred said, we've raised our full-year adjusted EBITDA guidance to between $140 and $145 million. Net revenue for the quarter was up by 21.3% year-over-year at approximately $111.5 million. Net revenue for the radio stations, radio divisions, pardon me, was up 21.8% year over year in the third quarter. Local advertising sales for Q3 were up 32.4% year over year, while national ad sales were down 15.7% compared to last year, or down 4% excluding political. Most of the major advertising categories were up from last year, except for government and public spending, which was down 29% due to non-recurring political and census spending, but that was still the largest category. Entertainment category saw the biggest increase from last year, up 240%, driven by casinos, concerts, and events. The other categories, services, retail, healthcare, financial, food and beverage, and automotive all saw double-digit increases compared to Q3 last year, and telecommunications was the only category that was down from last year. Excluding political, fourth quarter 2021 is currently pacing up in the high teens percentage range. Fourth quarter political revenue in 2020 was $15.4 million, versus a forecast for fourth quarter 2021 of approximately $1.5 million. So our revenue comps for the fourth quarter are going to be impacted by approximately $13.9 million is what we forecast. Net revenue for reach media was up by 28.2% in the third quarter, driven by increased advertiser demand for network audio. And adjusted EBITDA there was up by $410,000 year over year. Net revenues for our digital segment increased by $6.5 million in the third quarter. Continued demand for black-owned and targeted brands drove the growth in direct advertising sales at I-1 Digital. Adjusted EBITDA increased for the quarter by approximately $3.8 million year-over-year and by $4.7 million compared to 2019. Our digital platform is becoming a significant driver of revenue and EBITDA growth for the company. And with the higher multiples applied to digital businesses, we believe there's now significant value being created by those digital assets. We recognized approximately $48.8 million of revenue from our cable television segment during the quarter, an increase of 9.2%. Cable TV advertising revenue was up 17.2%, excluding political. Increased demand drove a higher average unit rate, And Clio TV advertising revenue was also up by $1.1 million. Cable TV affiliate revenue was up by 6%, driven by rate increases and converting free subs to paying subs, which was partially offset by churn. Cable subscribers for TV1, as measured by Nielsen, finished third quarter 2021 at $42.3 million, down from $45.5 million at the end of Q2 2021. And Clio had 34.6 million Nielsen subscribers. We recorded approximately $2.1 million of cost method income, less administrative expenses for our investment in the MGM National Harbor property for the quarter, compared to $1.6 million last year, and $1.7 million in 2019. So the MGM business is doing exceptionally well. Operating expenses excluding depreciation, amortization, impairments, and stock-based compensation increased to approximately $74.6 million in the third quarter compared to $55.6 million in Q3 of 2020 and $75.5 million in the third quarter of 2019. Employee compensation expenses increased by approximately $4.7 million due to the reversal of temporary salary cuts that were in effect last year and also staff salary increases given at the beginning of third quarter of this year following several years of pay freezes. Program content amortization at cable television segment increased by $2.7 million. Revenue variable expenses increased by $2.4 million. Marketing and promotional spending increased by $2.2 million, mostly at TV One. Outside services increased by $2 million. and event expenses increased by $1.6 million. The increase in corporate selling and general administrative expenses is primarily due to $2.5 million of expenses related to the Richmond gaming opportunity, which are added back to adjusted EBITDA. Radio operating expenses were up $5.1 million against a revenue increase of $6.9 million. Employee compensation and commissions were up as well as expenses to support special events. Our Atlanta stations hosted a successful 25th anniversary birthday bash in July. REACH operating expenses were up by $1.6 million against a revenue increase of $2.2 million, mainly due to higher employee and talent compensation and higher affiliate station costs. Operating expenses in the digital segment were up by $2.7 million, against a revenue increase of $6.5 million. That was driven predominantly by variable expenses related to traffic acquisition and sales costs. Cable TV expenses were up $6.2 million year over year. Programming content expense increased by approximately $2.7 million. Sales and marketing expenses were up by approximately $2.4 million, driven by increased media campaigns to support programming. Operating expenses in the corporate and elimination segment were up by $3.3 million, which included the Richmond Casino Chase costs of $2.5 million. For the third quarter, consolidated broadcast and digital operating income was approximately $49.1 million, an increase of 11.2%. Interest expense was approximately $15.9 million for the third quarter compared to approximately $18.2 million for the same period in 2020, and the company made cash interest payments of approximately $31.6 million in the quarter since semi-annual debt service payments are due February 1st and August 1st. The provision for income taxes was approximately $6.3 million in the quarter, and the company did not pay any cash taxes. Net income was approximately $13.9 million, or 27 cents per share, compared to a net loss of $12.8 million, or 29 cents per share for the third quarter of 2020. Capital expenditures were approximately $1.7 million compared to $526,000 last year. The company repurchased 6,715 shares of Class D common stock for $39,000. It executed a stock best repurchase of 3,285 shares of Class D common stock for $18,000. As of September 30th, 2021, total gross debt was $825 million. Ending unrestricted cash balance was $111.4 million, and therefore net debt was approximately $713.6 million, compared to $159.4 million of LTM-adjusted EBITDA for a total net leverage ratio of 4.48 times. We continue to generate strong free cash flow. Our expected year-end cash balance is now in the $160 million range, reducing net debt to approximately $665 million. As we think about net leverage moving forward, we're targeting to get below four times within the next 18 months. And ultimately, we see a path to get below three times based on the free cash flow generation from our core businesses. And with that, I'll hand back to Alan.