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spk01: Good morning and welcome to Town Square's third quarter conference call. As a reminder, today's call is being recorded and your participation implies consent to such recording. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. With that, I would like to introduce the first speaker for today's call, Claire Yenneke, Executive Vice President. Please go ahead.
spk00: Thank you, Operator, and good morning to everyone. Thank you for joining us today for Town Square's third quarter financial update. With me on the call today are Bill Wilson, our CEO, and Stuart Rosenstein, our CFO and Executive Vice President. Please note that during this call, we may make statements that provide information other than historical information, including statements relating to the company's future expectations, plans, and prospects. These statements are considered forward-looking statements under the safe harbor provision of the Private Securities Litigation Reform Act of 1995, and are subject to risks and uncertainties that could cause actual results to differ materially from these statements. These statements reflect the company's beliefs based on current conditions, but are subject to certain risks and uncertainties, including those that are detailed in the company's annual report on Form 10-K for the year ended December 31, 2019, filed with the SEC. We may also discuss certain non-GAAP financial measures, including adjusted EBITDA and adjusted operating income, which we may refer to as profit in our remarks. and make certain pro forma adjustments. Such non-GAAP financial measures should be used in conjunction with all the information contained in the quarterly, year-end, and current reports available on our website. At this time, I would like to turn the call over to Bill Wilson.
spk05: Thank you, Claire, and thank you all for joining us this morning. I'd like to start this call by acknowledging the hard work and dedication of the entire Town Square team. Our team continues to impress me each and every day with their passion for what they do and their dedication to their local communities and our company, as well as their adaptability during these challenging times. Our team's focus and commitment to do their job with their best effort each day, despite the circumstances, whether it be the challenges of the pandemic or the hurricanes that swept through our Louisiana markets twice, by super-serving our audience and our local advertisers, has resulted in a significant improvement of our business each month since the pandemic hit us hardest in April. I'm proud to say that our third quarter financial results exceeded our goals and expectations. And as we look out to the fourth quarter and into 2021, we believe that we will continue to see strong improvement in our business absent any significant external disruptions. As I shared on our Q2 earnings call, my goal for Q3 was to improve our net revenue to close to negative 20 percent year-over-year from Q2's negative 35 percent year-over-year decline. In fact, our net revenue far exceeded this goal, with net revenue negative 15 percent year-over-year in Q3, an improvement of 20 percentage points. This led to a material increase in adjusted EBITDA from 2.1 million in Q2 to 17.5 million in Q3. We experienced sequential net revenue improvement throughout Q3 as our business continued to pick up pace, with net revenue declining negative 21% in July, negative 16% in August, and ending the quarter at a much improved negative 9% in September as compared to the same months in 2019. Our better-than-anticipated third quarter results were driven by gains in both our TownSquare Interactive and advertising segments. Gains, which I am pleased to say, are continuing into the fourth quarter. I have spent the last two calls talking in depth about how Town Square Interactive, our digital marketing solution subscription business, has outperformed during this crisis and its recession-resistant qualities. Today, I'll keep my highlights on Town Square Interactive brief and let the impressively strong results of this recurring subscription business speak for itself. As a tremendous resource for our local clients, Town Square Interactive has delivered revenue, profit, and subscriber growth throughout the pandemic, and Q3 was no different. Third quarter net revenue increased plus 14.5% over prior year, an improvement from Q2's net revenue increase of plus 10.5%. In addition, Town Square Interactive added approximately 1,150 net subscribers in Q3, ending the quarter with approximately 21,900 net subscribers, the 10th consecutive quarter of 850 or more net subscriber ads, and the most quarterly net subscriber ads in nearly six years. Let me repeat that. In the middle of a pandemic, we added more quarterly net subscribers than than any quarter since 2015. Amazing. Our Q3 net revenue for Town Square Interactive was $18.2 million. And based on our current subscriber base, Town Square Interactive's run rate annual net revenue is over $79 million as of the end of Q3. And therefore, I am confident in reaffirming our expectation of Town Square Interactive achieving $100 million in annual net revenue within two to three years. In addition, Town Square Interactive continues to generate healthy profit margins with Q3 margin of 30.2%, translating to $5.5 million of profit in the third quarter and over $15 million of profit in the first nine months of 2020. Looking to Q4, I expect Town Square Interactive's Q4 revenue growth to improve from Q3's 18.2 million, which was an increase of 2.3 million in Q3 2020 compared to Q3 2019, to over 18.8 million, which would be an increase of over 2.7 million in Q4 2020 compared to Q4 2019, and thus plus 17% growth in Q4 year over year. Given a pace of approximately 850 net subscriber ads per quarter, we expect to reach 30,000 subscribers in approximately 29 months or less. When we reach 30,000 subscribers, we expect our run rate net revenue at that point would be roughly $110 million on an annualized basis. This also reinforces our expectation that Town Square Interactive will reach $100 million in annual net revenue with approximately a 30 percent profit margin within two to three years. In total, our third quarter digital revenue increased plus 7 percent over the prior year period, and digital revenue accounted for 44 percent of our total net revenue. We believe this serves as a clear differentiator between Town Square and others in local media. Town Square's digital assets be it our digital audience to our websites and apps, our video, social, mobile, and programmatic advertising solutions, or our robust subscription digital marketing services, and our ability to generate digital revenue proves out the fact that although we are proud of our roots and DNA in radio, Town Square is not limited to being just a radio or audio company, but rather at this point can and quite honestly should be classified as a premier local media and digital marketing solutions company. And we believe our diversification has enabled us to rebound more quickly than others in the radio broadcast industry from the COVID-19 pandemic downturn. Our advertising segment, which is composed of both our broadcast and digital advertising solutions, also improved greatly as its revenue decline improved to negative 17% year-over-year in Q3, a 20-point improvement from Q2's year-over-year decline of negative 38%. Our improvement was broad-based across the segment, with broadcast advertising revenue improving from its low of negative 52% year-over-year in April to end at negative 45% in Q2, and finally improved to negative 23% in Q3, ending the quarter with revenue declines of only negative 14% in September. Broadcast revenue improvement was driven by new local business generation and improvement in national revenue, which is a very small part of our business, yet was one of the hardest hit revenue streams during the downturn, with national broadcast revenue down negative 65% in the month of May as compared to the prior year. And, of course, strength in political, which I'll touch on in a few minutes. Digital advertising revenue, which has been more resilient than broadcast advertising revenue throughout the pandemic, given the strength of our digital online audience and their engagement, actually increased in the third quarter as compared to the prior year, something we are incredibly proud of. Amped revenue, which is advertising revenue associated with our owned and operated local websites, increased an impressive plus 9 percent in the third quarter compared to the prior year period. This revenue growth, was supported by the popularity of our local websites as more and more people engage with our brands online to obtain information specific to their local community. With an average of 34 million people coming to our local websites each month during the third quarter, up an incredibly plus 84% versus Q3 of 2019. As we have highlighted on previous earnings calls, as local newspapers and local TV stations have reduced their coverage and investment in local news in our size markets, the resulting coverage for the 67 cities that we serve locally has greatly diminished over the past five to 10 years. Town Square has, through our websites and mobile apps, stepped in to fill that void, which the COVID-19 pandemic has magnified. As a result, we are not only experiencing an all-time record number of people visiting our websites this year, but we are also experiencing an all-time record level of engagement more visits per month, more article reads per visit, et cetera, which is one of the numerous reasons why our digital advertising solutions are performing so strongly as more people than ever engage with our brands online to obtain information specific to their local community. To that point, as I highlighted on our last call, Google provided Town Square a $260,000 grant for the creation of two news outlets, serving the great cities of Tuscaloosa, Alabama, and Portsmouth, New Hampshire. We launched the Tuscaloosa thread in early August, and its first month reached over 93,000 unique visitors. Incredible. And in Portsmouth, New Hampshire market, in partnership with Google, we have recently launched the Seacoast Current brand, www.seacoastcurrent.com, one of the many silver linings of the pandemic, has been the clear evidence that our local brands and our 67 markets are beloved by their communities and are where the local audience turns to be informed and entertained across our broadcast and digital platforms. Town Square Ignite, our proprietary in-house technology platform and digital programmatic offering, increased revenue a very strong plus 10% in the third quarter and plus 7.5% for the first nine months of 2020 compared to the same periods of 2019, making Town Square Ignite our fastest-growing advertising solution for both periods. We believe that Ignite will continue to be among our fastest-growing advertising solutions for the next several years and remain confident in our estimate that Town Square Ignite's annual advertising revenue will reach 100 million in the next two to three years. Touching now on political, Suffice it to say, like Drake, political revenue has been on fire this year. In the third quarter, political revenue was 4.5 million, more than three times what we booked in Q3 2016 during the previous presidential election cycle. Based on what is currently on the books today, we expect 2020 political revenue to be approximately 16 million, which is roughly 75 percent more than we booked in all of 2016. Improvement in our advertising business has continued thus far in Q4, in part due to the strength of political, the strength of digital, as well as the strength in new advertising business. In fact, October was our strongest new advertising business month of the year. Defined as business from an advertiser, excluding political, that has not advertised with Townscore in the last 13 months. And although the political surge is now behind us, our current forecast points to Q4 advertising revenue improving over Q3 with and without political revenue, given our expectation of continued strong rebound in broadcast and impressive year-over-year growth in digital advertising in Q4. The last point I want to touch on briefly before handling the call over to Stu is a very important one, and that is to highlight our strong cash generation ability and liquidity position. In the third quarter, cash flow provided by continuing operations was positive $12 million and positive $24 million in the first nine months of 2020. and that is after making approximately $17 million of cash interest payments in 2020. We ended the quarter with $79 million of cash on the balance sheet, and we also have access to our $50 million undrawn revolver, and our business has recovered to the point that we are not concerned about our liquidity and ability to meet our cash obligations going forward given current market circumstances. Looking forward, If there were to be another wave of state shutdowns and a subsequent further downturn in advertising revenue, we are confident that we would be able to manage through it efficiently and effectively as we have done to date and come out on the other side of this pandemic even further differentiated from our local media competitors. I trust that I have provided a very thorough, in-depth perspective on not only Q3 results, but also what we are currently expecting in Q4. As you would expect, we will not be providing formal guidance for the fourth quarter given the COVID-19 pandemic. That said, our goal in Q4 is to improve net revenue from negative 15% decline in Q3 to half that or negative 7.5% decline in Q4 as compared to last year. And we are confident we can achieve that given our talented team, the strength and continued growth of Town Square Interactive's subscriber base, and continued improvement in our broadcast and digital advertising revenue, as well as the strength of political net revenue, which we estimate will be approximately $9 million in Q4. As was the case in Q2 and Q3, where we had no material event revenue, we expect the same in Q4. and we are comping against $2 million in live event revenue in Q4 2019. We also expect to continue to see sequential improvement in adjusted EBITDA as we begin to approach prior year profit levels and expect to build cash once again in the fourth quarter. With that, I'll turn the call over to Stu, who is going to discuss our financial results in much greater detail. Take it away, Stu.
spk03: Thank you, Bill, and good morning, everyone. As a reminder, in 2019, we sold our bridal exposition live events, so our year-to-date 2019 results and year-to-date 2020 growth rates are presented pro forma for the sale of these events, unless otherwise stated. Please refer to the tables included in our earnings release, which provide gap results and pro forma results, as well as our non-gap performance measures. As Bill mentioned, our third quarter financial results exceeded our original expectations. as the performance of our advertising and town square interactive segments improved throughout the quarter, and political revenue reached new heights. In total, third quarter net revenue decreased 15.3% over the prior year period to $95.3 million, and third quarter adjusted EBITDA decreased 37.8% to $17.5 million. This is a marked and significant improvement from second quarter revenue and adjusted EBITDA declines of approximately 35% and 93%, respectively. In the third quarter, Town Square Interactive's subscription business experienced sequential revenue improvement throughout each month of this quarter. This translated to subscription revenue growth of 14.5% in Q3 and 13.7% in the first nine months of the year compared to the prior year. Town Square Interactive continues to generate healthy profit margins, with a Q3 margin of 30.2%, equaling $5.5 million of profit in the third quarter, and over $15 million of profit in the first nine months of 2020. Importantly and impressively, Town Square Interactive grew net revenue and subscribers in each and every month of 2020, demonstrating its resilience as well as its importance to our SMBs. quarter, advertising net revenue declined 17.2% as compared to the prior year period, a significant improvement from Q2's decline of 37.5%. Each month saw a sequential improvement, and we ended Q3 with advertising net revenue declining only 10.2% in September compared to that of the prior year period. Our digital advertising solutions returned to growth in the third quarter, led by year-over-year net revenue growth from our AMPED and our Town Square Ignite advertising solutions, which increased 9% and 10% in the third quarter. Broadcast advertising revenue also improved materially throughout the third quarter, narrowing declines from 45% in the second quarter to 23% in the third quarter, each as compared to the prior year periods. 2020 has been a record political year for the company. In Q3, political revenue was $4.5 million as compared to $886,000 in the third quarter of 2019 and $1.3 million in the third quarter of 2016, the last presidential election year. And we're currently forecasting full year 2020 political revenue to come in at approximately $16 million as compared to 2019's $3.1 million and 2016's $9 million. Due to the pandemic, we are still not hosting live events, resulting in third quarter live events net revenue declining nearly 100% versus the prior year. Fortunately, we pruned and right-sized the live events portfolio in 2018 and 2019 to align with Bill's local first strategy, and as a result, our cost basis now in 2020 is largely variable. Thus, if we do not host an event, we do not incur many of these expenses. Therefore, while third quarter net revenue for live events decreased nearly 100% versus the prior year period, Direct operating expenses decreased approximately 95% versus the prior year, and we were approximately break-even for the quarter with a loss of approximately $93,000. In the first nine months of 2020, live events net revenue declined 83% and live events direct operating expenses declined 82% compared to the prior year period, which resulted in positive adjusted operating income of $363,000. Given our largely variable expense base in live events, assuming no more event revenue for the remainder of 2020, we expect our live events division to break even on an EBITDA basis and cash flow basis for the year given our strong expense management. In total, third quarter direct operating expenses decreased by 8% compared to the third quarter of 2019. This was driven by the live events expense decreases as well as a 7.6% decrease in advertising direct operating expenses, partially offset by an increase in Town Square interactive direct operating expenses of 16.7%. The declines in advertising direct operating expense were driven by our cost reduction efforts enacted earlier in the year due to the pandemic and the reduction of variable expenses such as sales commissions. Due to the prepayment we made this year to our bank term loans and bonds, as well as lower LIBOR rates, Interest expense for the third quarter declined approximately 9.8%, or $800,000 as compared to the prior year period, and 7.5%, or $1.9 million in the year-to-date period. For the third quarter, net income from continuing operations was $1.3 million, or 3 cents per diluted share, as compared to net income from continuing operations of $8.5 million, or 29 cents per diluted share in the third quarter of 2019. The decrease was primarily due to the decline in net revenue driven by the COVID-19 pandemic. We'd like to remind you that the provision for income taxes included on the face of the income statement is for GAAP financial statement purposes only. We maintain significant tax attributes, including $191 million of federal annual carry-forwards and other substantial tax yields related to the tax amortization of our intangible assets. We continue to believe that we will not be a material taxpayer until approximately the year 2026. In the first nine months of 2020, we generated positive cash flow from continuing operations of approximately $23.8 million and $40.6 million prior to interest payments, thus demonstrating Town Square's strong cash flow generation ability and our careful expense management during the pandemic. As a reminder, following the onset of the pandemic, we enacted a series of cost cuts and cash preservation measures, such as eliminating our quarterly dividend and limiting capital expenditures to only those projects that are essential. In the third quarter, CapEx declined $2.7 million, or 48%, and $3.3 million, and 23%, in the first nine months of the year, compared to the prior year period. We ended the quarter with $79.1 million of cash on our balance sheet. This is a reduction of less than $6 million since December 31st, 2019, despite reducing long-term debt by $14.7 million, making a $4.2 million payment for dividends prior to us eliminating dividends, and making $16.8 million of interest expense payments. In the near term, we anticipate holding cash on the balance sheet in order to continue to preserve flexibility during the pandemic. However, our long-term goal remains the same, to reduce net leverage to four times, which we have been on track to achieve by the end of 2020, prior to the impact of this pandemic. At current market conditions, given the strength of our cash generation abilities and the recovery we've experienced in our revenue year to date, we believe we have ample liquidity to operate our business for the foreseeable future. And with that, I will now turn the call back over to Bill.
spk05: Thanks, Stu. And thank you to everyone who dialed in this morning. 2020 has been a challenging year. But one of the things our team has noted with great pride is that even with all of the challenges during the pandemic, we did not need to alter our core strategy. Rather, the pandemic has allowed us to separate from our local media peers by executing our existing strategy and placing a spotlight on the resulting success. Our focus on underserved small and medium-sized local markets, our investment and commitment to local firsts, and our investment in world-class personnel, technology, and infrastructure that allowed us to build a strong digital platform with best of breed products, services, and solutions, including a recurring digital subscription business, which together brings digital revenue to 44% of our total revenue. All of this contributed to our ability to mitigate revenue declines and manage quite effectively through this downturn. We want to ensure all of our stakeholders that we will continue to carefully manage through this crisis, however long it may last and whatever turns it may take. As we have stated on earlier calls, our goal has been to balance cost reductions with our opportunity for long-term growth. We want to be best positioned to emerge from this downturn more quickly and more efficiently than our competitors. And we believe that this strategy, together with our diversified and differentiated in-house proprietary product offering, ensures that we will be. This call was a bit shorter than our last two calls, and that is because we wanted our Q3 results to speak for themselves, and we hope you agree that they do. However, we are always available to further discuss our great company, so please do not hesitate to reach out and call us. Be well, and as we say internally, stay Town Square strong. And with that, operator, please open the calls for any questions.
spk01: Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from the line of Michael Kopinski with Noble Capital Markets. Please proceed with your question.
spk04: Thank you, and congratulations on your impressive quarter. Just a couple of questions. In terms of your cost reductions, your previous cost reductions, how much of those were permanent, and as we think about Q4, how much of those operating expenses are going to flow through Q4? And maybe just give us some color on what your thoughts are on OPEX.
spk05: Sure. Hey, Michael, good morning. It's Bill. I'll have Stu step in and take that question for you.
spk03: Hey, Michael, how are you? Great. You know, the majority of the cost reductions are going to be permanent. We will add back sales folks and investment in our digital products as time goes by. And when we feel comfortable that the pandemic is in our rearview mirror, we think that we'll probably bring back the 401K match. But things like the dividend and all the permanent head staff reductions that we made, that we feel make us a stronger company, we're not going to bring back.
spk04: Gotcha. And in terms of TSI, really impressive there. How many of those subscribers are in market to your stations versus out of market? And how does that compare to maybe the year earlier results?
spk05: Yes, Michael. It's Bill again. So thank you for the recognition of the Town Square Interactive's strength throughout the pandemic and quite honestly year after year. In terms of the subscriber growth, given the size of our inside sales team in Charlotte, each quarter we're adding more out-of-radio market clients than in-radio market clients. It's approaching 60%, outside our markets, 40% in our markets, but it hasn't hit that threshold yet. I think it's like 57% to be exact outside of our markets. But on a quarterly basis, we're adding more and more outside of our markets, which we expect on prior calls, as you may recall, Michael, we talked about the addressable market of what we call the perfect SMBs that meet our profile of under $5 million in revenue, under 24 employees, population size 1.5 million or less. There's 500 of those SMBs in our radio markets, our 67 radio markets. There's 8 million of those outside of our radio markets that fit the criteria that I just described. So, Our expectation is as we approach that 30,000 subscriber base we talked about on the call and over 100 million in annual revenue, we'll be adding more out-of-market TSI subscribers than in-market.
spk04: And, Bill, the subscriber growth is really extraordinary. And I was just wondering, is there any particular differences with the new subscribers added, like such as the business size, the number of locations of businesses, or I mean, are we seeing it, you know, or is it very similar to the types of businesses that you had before?
spk05: It's very similar to the types of businesses before. You know, obviously we've had the benefit of really started this business organically in 2012, learned a lot for many years, and really I'd say perfected may be too strong a word, but really understand the SMB and what we can provide through Town Square Interactive and really the ideal customer set. So they haven't changed quite. quite at all. And as we talked about during the pandemic, I think not only our company, but if you look at other companies like Wix or other publicly traded companies in this space, they've really done well because the pandemic has shown the value and importance of having a strong digital marketing presence. And that's why Town Square Interactive is performing so well. I think it's, A, our talented team, and B, it's more clear than ever the need for this service. And when you think about the scale we can provide at an average price point of only $300 per month. And to be able to, in essence, guarantee traffic to a SMB's website is a quite valuable value proposition. So we're really moderating investment in Townscrew Interactive just to keep the margins at 30% annualized. That's what we target. And we moderate that investment, as Stu just said, in salespeople and customer service people to obtain that. But the opportunity is vast. At one point, we could accelerate that investment. We're not going to do that during this pandemic. But I think on prior public earnings calls, we talked about a second location out west, which post-pandemic are still very much part of our plans.
spk04: Gotcha. And last question. In terms of the sequential improvement in advertising, can you give us a sense of maybe the categories that you're seeing strength? You know, I understand that some are saying financial services are showing, you know, some improved strength. What are you seeing in terms of what's driving the sequential improvement in advertising?
spk05: Yeah, one of the things I'm most proud of from the team perspective, as I talked about on the last call, the team has adapted quite remarkably throughout the company in terms of the daily challenges. And obviously, as we were facing significant advertiser cancellations in March and April and May, and then you look at, I'll start with the negatives for Q3, entertainment and travel and auto and food, particularly entertainment, travel, auto, and food. Those categories really are categories that we've done quite well with. So our account executives throughout our 67 markets had to really prospect and reach out to industries and categories that may not have been categories that we excelled at in the past. And that's why one of the things I'm most proud of is the new business generation, you know, getting clients to advertise with us who are new advertisers to our platform and It's quite important, obviously, as you've got, you know, no events and you've got restricted travel and all of those things. So to answer your question, what we saw strength was in insurance, health care, recruiting, education. And education, for example, and health care are typically our largest categories. And through the pandemic, those have been our fastest-growing categories.
spk04: Great. Thank you so much. Congratulations. Thank you, Michael. Stay well.
spk01: Thank you. Our next question comes from the line of Tim Goss with Barrington Research. Please proceed with your question.
spk02: Thanks and good morning. No doubt you're aware that as we've all been preparing for this call, the big news has been that the Pfizer vaccine was determined to be more than 90% effective, not a par with measles and smallpox without major side effects, which is a big game changer. And so I have a number of questions for you with regard to that. First, you just mentioned the $300 a month, great value. Is there pricing flexibility with the TSI? What do you think the impact would be on each of your business operations as the prospect of a vaccine and probably multiple vaccines would be more of a reality? And how would your strategy be adjusted and how quickly is any of this likely to occur? And yes, start with that.
spk05: Sounds like a plan, Tim. Thank you. Good morning. Glad to hear your voice. Glad to hear your well. Yeah, obviously exciting news for not only our country, but the world with Pfizer announcing earlier this morning that their vaccine is, as you just noted, 90% effective, which is in line with measles and other vaccines. So quite great news. for everybody on a personal level, including the economy and our, and our business, how quickly that is going to be distributed in that in that release, they expected review by the end of the month of November and possible distribution in the first quarter. So I don't know when it will be distributed, but I would expect a distribution of this vaccine or quite honestly, I believe there'll be many others in the first half of 2021. We, have, as you know, moderated our expense reductions to make sure that we can capitalize on long-term growth prospects. So although it was hard to do, we did limit the full-time reduction workforce 6% in early April, which although was hard decisions, was moderate in the scope of what we were facing, and that's why our EBITDA in Q2 was roughly 2 million, and we were glad to see that bounce back so strongly this And we've seen sequential improvement across our revenue lines every single month, not only quarter to quarter, but literally every single month, be it broadcast, be it digital advertising, be it Ignite, AMP, and everything we touched on. So our expectation is whenever a vaccine does get widely distributed, and assuming obviously people take it, we will return back to our 2019 growth levels, which, as you may recall, were, you know, high single-digit revenue growth approaching double-digit. and double-digit EBITDA growth. So that's what our expectation is post-vaccine and a post-COVID world. And we believe, regardless of how long this pandemic lasts and whatever turns it may take, if there's incremental cases spiking, as we've seen over the last four weeks with cases increasing and in certain markets hospitalizations increasing, we actually haven't seen those spikes lessen our recovery month to month. which I think is a testament to our team's adaptability. I was answering Michael's question and being more, I think, prepared if things do change. But as it relates to a vaccine and what that means for our business, we clearly expect it to return to 2019 growth levels for revenue and profit. And as I mentioned earlier, things that we put on hold, like a second location for Town Square Interactive out west, we would quickly ramp that up. and therefore accelerate that business's march to $100 million in revenue at a 30% profit margin. I know you had other questions, Tim, so I'll turn it back to you.
spk02: No, that's great. And I'm wondering, like, listener trends tended to be to, well, bump up to some extent with being home, but then radio tends to be in car type of situation. I wonder how do you expect that to balance out? even though radio maybe is a less important business as you become more of a digital company. And then the live events that have been mothballed, I imagine they could be restored quickly. Do you think you'd probably start to think about putting some of those numbers back into your model for 2021 with this sort of news that we hoped would come, but didn't necessarily know. And then, uh, I guess with the cost cut that you and Mike were just discussing, that does seem to build in some better profitability than maybe you've been able to achieve because now you have a better idea of what you really need and what you can do without. Any other enhancement in that question would be great.
spk05: That was good, Jeff. I'll take them, and then if I missed any of them, just let me know. As it relates to live events, you know, I think you know me well enough that I'm conservative in terms of our modeling. So even with this news, I will be modeling, you know, no mass gatherings of people for 2021. With this news, could that be accelerated and we start to do live events next summer into the fall? I clearly think that's a possibility. But as it relates to modeling and forecasting, we're conservative in that regard. So we'll still plan on no live event revenue for 2021 and hopefully we'll have surprises to the upside. Given that our live event business, as you know, we were thankfully sold our name carnival business. We sold our music festival business, anything that was not poured to our local markets and really almost like a brand extension at this point where we're getting great brand extension for our local radio stations. We're getting great client activation opportunities. That said, it's still a very small part of our company. It's less than $20 million in revenue. I think last 2019 was roughly $16 million in revenue, roughly $3 million in profits. So although important strategically, a very, very small part of our business. The great news is we have a variable workforce and our ability to then, as you said, take it from a mothball scenario to actually executing. We could do that within 60 days, and we have a wonderful, extremely talented team. a woman, Ashley, who runs that force, who's been with us for many, many years. So I feel very confident whenever a vaccine is distributed and it's safe to have mass gatherings of people, 60 days later, we can be up and running for our live events. As it relates to your last point, and then I'll circle back to your listenership question, you are correct. I believe as we look at post-pandemic, be that end of 20, second half of 20, be that 21 and 22, our profitability margins will improve for the reasons that you just touched on and Stu touched on earlier. Going back to your first question, which is, to me, one of the most important, because in media, if you're a believer that money follows eyeballs, obviously audience is critical. So as I shared on the prepared marks, I couldn't be more proud of our online audience and how that has grown so remarkably, you know, really year in and year out since we started the company and, You know, if we didn't have that and we didn't have digital advertising growth like we did in Q3, and we talked about not only Ignite growth but growth of our AMP product line, which is our owned and operated inventory, we wouldn't have digital revenue being 44% of our company's total. But more importantly, we wouldn't be a diversified media company that could weather this downturn as we have to date and will continue to do so. So as it relates specifically to listenership, I actually think we get the best of both worlds as it relates to this pandemic. During this pandemic, we saw a record number of consumers downloading our mobile apps as well as utilizing our station through home devices like Amazon Alexa and Google Home, which I believe will, in essence, accelerate it. already changing consumer behavior, which actually serves us quite well because, as we talked about on prior earnings calls, the mobile app, Station has their own mobile app. When you get into an automobile, every consumer, what they do is they plug it in to charge your battery, and now the car dashboard is controlled by your phone. And given that all of our apps are integrated with Apple CarPlay and Android Auto, our apps show up on your dashboard. Not only that, they're integrated into the steering wheel and all the controls of your car. So that is incredibly valuable to us with a potential disruption of dashboards in the next couple decades. So that behavior has greatly benefited to us. But then, as you said, as people get back to work and are in their car more, that has the additional benefit. What I would share is we're so blessed not to be in the top 50 cities. It's core to our strategy. It's core to our local first strategy. So commuting time and listenership trends, even pre-pandemic, as you recall, Jim, are quite different for our company. The good news for the broadcast industry from a radio perspective is that number of people listening to radio has been consistent for decades. You know, 93% of Americans listen to radio every single week. What has been quite challenged for the industry is actually time spent listening. Pre-pandemic, as well as through this pandemic, the good news is listenership levels for Town Square have been quite stable the last two years, even though the industry is declining. I, to my core, believe that's a combination of our smaller market size where radio really matters. It's companionship. Our on-air talent, our social influences are now the fabric of the community where people tune in every day to be informed and entertained, which is quite different, in my view, in large market America. So I think the combination of the two gives us the benefit of accelerating consumer change on a digital footprint as it relates to the listenership through apps and smart devices. And then to your point, People being either back to work and listening at work or listening more in the car traveling to work give us really a good wind at our backs as we come through hopefully the second stage and last stage of this pandemic. So, Jim, hopefully I answered those questions, but if you want to circle back on any of those or ask any others, feel free to.
spk02: Now that you've given quite a robust answer, and we really appreciate it. Thanks. You're welcome, Jim. Glad you're well.
spk01: Thank you. Ladies and gentlemen, that concludes our question and answer session. I'll turn the floor back to Mr. Wilson for any final comments.
spk05: Thank you, operator, and thank you, everybody, for dialing in this morning and taking a few minutes of your Monday morning to hear about updates for our company. As Jim just said, we're obviously optimistic about the news that Pfizer released this morning, but more importantly to you and us is, or just as importantly is, we couldn't be more confident in where we're how we're recovering and where we're heading as a company. And just want to take the opportunity to thank the Town Square team for their tremendous adaptability and ability to conquer our everyday challenges and perform as well as we are during this pandemic. And just thank the team. And be safe, be well. And as we say at Town Square, stay Town Square strong. And until next time, thank you, operator.
spk01: Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.
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