Urban One, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the Urban One 2025 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 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 13, 2025. 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 the conference call will be available from 2 o'clock p.m. Eastern Daylight Time, May 13, 2025, until 1159 p.m. Eastern Daylight Time, May 20, 2025. Callers may access the replay by calling 1-800-770-2030. International callers may dial direct 1-609-800-9909. The replay access code is 796-8738. Access to live audio and a replay of the 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 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 first quarter 2025 results conference call. As usual, joined with Peter and I are Jody Drewer, who's our TV1 Chief Financial Officer for any TV questions, Karen Wishart, our Chief Administrative Officer, and also Christopher Simpson, who is our General Counsel. You've seen the earnings release, Q1 results, largely in line with the guidance that we gave, Q2 radio pacings, weekend since our last conference call. They're roughly down about 9% now. However, as I said on the conference call last quarter, our TV ratings seem to have stabilized in Q1 and Q2 in our line with what we budgeted. So with that We're continuing to reaffirm the guidance that we gave of $75 million of EBITDA. Something, again, to note on our 2024 EBITDA, which was about 103, almost $10 million of that was a non-cash adjustment for the TV1 award associated with my contract. So if you're looking at apples to apples, it's roughly about $92 million of cash, EBITDA down to 75. Still not a stellar year-over-year performance going backwards, but what we have expected. So with that, we have said that we're going to continue to focus on our cost controls, managing our leverage, and maintaining a strong liquidity position. One of the things that came up in the last conference call is what were we going to do with our $137 million of year in cash. And since that conference call, we've actually bought back into open market, you know, $88.6 million of our debt at an average price of about 53.9. And we've reduced our gross debt down to $495.9 million. And we're still sitting on about $80 million of cash on hand at present with an undrawn revolver. So, you know, we continue to be focused on deleveraging and maintaining the liquidity position. And so in a difficult environment, you've got to make sure that, you know, you're prudent and you – And you make moves that keep you in the best possible position of flexibility in terms of leverage and expense control, and that's what we're really focused on. So with that, I'm going to turn it over to Peter to get into the specific details and numbers, and then we'll come back and talk about leverage and leverage.

Thank you, Alfred. So consolidated net revenue is approximately $92.2 million, down 11.7% year over year. Net revenue for the radio broadcasting segment was $32.6 million, a decrease of 10.3% year over year. Excluding political, net revenue was down 7.7% year over year. According to Miller Kaplan, our local ad sales were down 12.8% against our markets that were down 13.2%. National ad sales were down 14.6% against our markets being down 11.6%. Our largest radio ad category was services, which was up 11% driven by legal services. Travel and transportation was up 17%, but that's our smallest category. Telecom financial categories were up low single digits. All of the other major categories were down, including health care, entertainment, retail, government, auto, food and beverage. Net revenue for each media segment was $5.9 million in the first quarter, which was down 30.9% from the prior year. Adjusted EBITDA outreach was a loss of $600,000 for the quarter. A combination of client attrition and lower average unit rates drove that decline. Net revenues for the digital segment were down 16.2% in Q1 at $10.2 million. Audio streaming revenue was down by $2.1 million in the quarter due to the renegotiation of an exclusive third-party deal, and that impacted adjusted EBITDA, which was $58,000 compared to $2.3 million in the prior year. We recognized approximately $44.2 million of revenue My cable television segment during the quarter, a decrease of 7.9%. Cable TV advertising revenue is down 6.3%. TV1 delivery declined 18% in total day persons, 25.54, which is partially offset by an increase in Clio TV, which was up 29% in total day persons, 25.54 delivery. And also favorable AVOD and FAST revenue of $1.1 million, which resulted in a net ad revenue decline of $1.7 million. Cable TV affiliate revenue was down by 10%, driven by subscriber churn, which is about $3.3 million, partially offset by $1.3 million, which is a combination of subscriber rate increases and the launch of Now TV. Cable subscribers for TV One, as measured by Nielsen, finished Q1... at 35.6 million compared to 37.2 million at the end of Q4. Clio TV had 35 million Nielsen subs. Operating expenses, excluding depreciation and amortization, stock-based compensation and impairment of goodwill and tangible assets and long-lived assets, decreased to approximately $80.7 million for the quarter, a decrease of 8.6% from the prior year. The overall decrease in operating expenses, primarily due to lower third-party professional fees in the corporate segment, lower content expenses for cable television, and lower employee compensation as a result of recent cost savings measures. Radio operating expenses were down 2.9%, or approximately $0.9 million, driven by lower employee compensation costs. Reach operating expenses were down 1.7%, again driven by lower employee compensation costs. Operating expenses in the digital segment were up 3.2%, and that was driven by higher traffic acquisition costs, partially offset by lower employee compensation. Operating expenses in the cable TV segment were down 10.8% year-over-year, driven by lower programming content expense, on-air promotions, and employee compensation costs. Operating expenses in the corporate and elimination segment were down by approximately $3.8 million, driven by lower third-party professional fees. Consolidated adjusted EBITDA was approximately $12.9 million, down 42.2%. Consolidated broadcast and digital operating income was approximately $23 million, a decrease of 28.1%. Interest and investment income was approximately $1 million in the first quarter compared to $2 million last year. The decrease was due to lower cash balances and interest-bearing investment accounts. Interest expense decreased to approximately $10.9 million for Q1, down from $13 million last year due to the lower overall debt balances as a result of the company's debt reduction strategy. The company made cash interest payments of approximately $21.6 million in the quarter. During the quarter, the company repurchased $28.2 million of its 2028 notes at an average price of 58% of par, bringing in the balance at quarter end to $556,348,000. In April, the company repurchased an additional $60.4 million in notes at an average price of 51.9%. And as Alfred said, that brings the current balance on the debt to $495,930,000. We recorded $6.4 million in non-cash impairments in Q1 against the carrying value of the FCC licenses in five of our radio markets, which are Dallas, Indianapolis, Raleigh, Philadelphia, and Cleveland. The provision for income taxes was approximately $15.7 million for the first quarter. as we booked an additional $14.6 million valuation allowance against our NOL balances. The company paid cash income taxes in the amount of $33,000. Capital expenditures were approximately $2.5 million. Net loss was approximately $11.7 million, or 26 cents per share, compared to net income of $7.5 million, or 15 cents per share, for the first quarter of 2024. During the three months ended March 31st, 2025, the company repurchased 449,200 shares of Class A column stock in the amount of approximately $700,000, an average price of $1.48 per share. And we also repurchased 303,622 shares of Class D stock in the amount of approximately $300,000, an average price of $0.87 per share. As of March 31st, total gross debt was approximately $556.3 million, ending unrestricted cash was $115.1 million, resulting in net debt of approximately $441.3 million, compared to $94.1 million of LTM reported adjusted EBITDA for a total net leverage ratio of 4.69 times. And finally, we recast the comparable periods for 2024 to reflect the move of $7.9 million of CTV revenue from digital to TV, and also the reapportionment of cross-platform sales and marketing expenses. We talked about that on the last earnings call. A number of questions came up, so we thought we'd just give you a comp from prior quarters with those questions. with those recast numbers. And with that, I'll hand back to you, Alfred. Thank you very much.