Q1 2022 Urban One Inc Earnings Call
Okay.
Okay.
Yeah.
Yes.
Ladies and gentlemen, thank you for standing by.
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 <unk>.
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 five 2022. Please.
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 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 dot urban one dot com.
A replay of this conference call will be available from 12 P. M. Eastern time may taught mathys 2022.
Until 11 59 P M may nine 2022.
Callers may access the replay by calling 8662071041 in the U S International callers may dial direct area code four zero to 90 700847.
The replay access code is 7445 to $5 nine.
Access to live audio and a replay of the conference call will also be available on urban one's corporate website at www Dot urban one dot 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'll now turn the call over to Alfred C. Liggins, Chief Executive Officer of Urban one who is joined by Peter D Thompson Chief Financial Officer.
Thank you very much operator, and welcome to our first quarter results conference.
Conference call also joining <unk>.
Peter and myself are Christopher Simpson, who is our general.
General Counsel.
Karen Wishart, who is our chief administrative officer.
And Jody drill where he is the CFO of TV one.
Saw the press release.
Really.
Excited about the extraordinarily strong quarter that we had a cross.
All of our all of our business units.
<unk> performance.
Well in excess of I think what.
Most.
Analysts had predicted.
We had.
We had guided to.
Two yeah mid.
Mid teens revenue growth and are in the radio business, but you know that at all.
Came in.
Very strong and and so did TV, one and so yeah, we're really.
Really strong performance from our team across our divisions now very proud of them.
I'm going to hit you know what I think are kind of like the two highlights.
Areas of of conversation Yeah first here.
Our guidance for the year and also an update on Richmond.
Given the strength in Q1, we do feel that we will exceed the top end of our $145 million to $150 million of EBITDA guidance for this year.
Not sure exactly where it's going to land, but you know well we'll beat that.
However, yeah. It should be noted that we are seeing a less robust pacing going forward and we.
We articulated that in the.
In the press release radios pacing mid single digits.
Our Austin once you start to lap tougher comps.
From last year, so yes.
Even with all of that we still feel like were gone out.
<unk> the top end of our guidance, but yeah.
Just want to let people know that there are tougher comps coming in you are starting to see a moderation in.
And the growth rate.
In particular in radio and we don't know where the macro economic wins are going to blow, but we should be in good shape now by by the end of this year, but don't just extrapolate Q1's performance forward for the next three quarters yeah.
Moving to Richmond.
Question that people get.
Uh huh.
We get all the time, what's going on so let me just articulate specifically.
So everybody knows that yes, we had been moving forward to get a second referendum scheduled the city council of the city of Richmond voted to.
To petition the court for a second referendum that was back in January .
We then went to the Virginia lottery to get pre certification for our second referendum.
Got that.
And in April beginning of April .
And actually is.
I think at the beginning of April and then we went to the circuit court of Richmond.
And petition the court for the second referendum two to be scheduled.
And and they granted that you now for November of this year and on.
The 18th of April that.
That court order became final and Unappealable.
So there is a referendum scheduled however.
There is still.
A there are still hurdles.
There is still a movement within the General Assembly.
To put language in their budget that would.
Attempt to block the second referendum and not let US run again until November of 'twenty, three and and we're in the process of trying to lobby to.
To get that language taken out not sure that we will be successful.
But that is that that that is one avenue.
The other Avenue is that the governor.
<unk> also has the opportunity to veto language or amend language Ah and bills, including the budget Bill.
We believe that we have.
An extraordinarily strong legal argument.
That the court order is final and Unappealable and that the general Assembly cannot retroactively undo a court order.
Spent a lot of time with lawyers looking at this by the way, we're probably the only entity that has looked at this.
In depth I do.
I believe that it is now starting to come into focus.
At.
At the at the legislature level, because they're still they still don't have a budget deal yet they are in the process and.
And the Virginia General Assembly trying to negotiate.
The budget, but there's a strong chance that this language being there and if it is if we're not able to get it either vetoed out or taken out.
And by the legislature legislators, then there's probably going to have to be some sort of adjudication process not sure exactly how that's going to work yet if in fact that happens we think that if that happens we've got a stronger argument yeah. So I just don't know it's you know.
We're very optimistic that we're gonna be running a.
Second referendum, but I don't want to lead anybody to believe that it is a slam dunk and quite frankly, there's probably unchartered territory you have probably never before.
Has there ever been.
An effort you know to use.
Budget language to retro actively through art a of a but a final non appealable court order so some.
Judge may have to make that decision you know that's kind of like the worst case scenario I don't know how that works out on timing in the meantime, we're doing everything we can to continue da Vinci convince legislators that we we've got a stronger position than they should just.
Back down and let this.
Move forward and we're also.
Tried to convince the.
The Governor's office that this is a legal right that they don't want to take away from the citizens of the city of Richmond, Virginia, The city feels like it has.
Is compelled to move forward with this referendum from a legal standpoint, they've got a court order that is compelling to do so.
So that's where we sit.
It's a better position than we were in in December of last year for sure we keep making progress.
Towards that end.
And I also want to caution people and I think everybody knows this but.
The referendum that we ran last time, we you know we lost at 58, 5% to 40 915, so very close vote, where you know.
We're focused on what can we do differently to get it over.
Give it over the finish line should we get the opportunity for short to run it again.
But it's a 50 50 proposition.
So not dead by any stretch of the imagination, but not a not a not a slam dunk. So that is in detail exactly where we're at.
I can't tell you when we'll have certainty on if we're if we're running for sure or not because it's a iterative process of lobbying the legislature the Governor's office and then.
Ultimately if there is some sort of judiciary judicial procedure I don't know what the timing is you know one on.
On that either so with that I am going to turn it over to Peter So he can give you the details on the quarter and then we'll come back for Q&A.
You offered.
So as I, often said the first quarter of 'twenty. Two finished very strongly with net revenue and adjusted EBITDA across the board over prior year consolidated adjusted EBITDA was $42 million for the quarter.
From $32 million in 2021, and up from $27 $7 million and pre pandemic 2019.
Net revenue was up by 22, 9% year over year for the quarter at approximately $112 $3 million.
Net revenue for the radio segment increased 13, 3% year over year in the first quarter local AD sales, excluding political were up 14, 8% a national AD sales were up six 9% excluding political.
Most of the major advertising categories were up from last year with exception of government and public which was down 13.7% I don't want to motive, which was down 14, 3%.
Food and beverage down five 9%.
We saw a decrease in government funded pandemic outreach and political spending was down given the GA run off election that occurred in Q1 of last year.
Services.
Our biggest AD category driven by return.
And by law firms and an increase in spending from Tech services.
23.3%.
Entertainment category.
Was up 116% health care retail financial travel and transportation also double digit increases compared to last year.
Telecoms was flat.
And is Alfred mentioned second quarter twenty-two currently pacing up in the mid single digit percentage range.
Net revenue for reach media was $10 million in the first quarter compared to $7.8 million in the prior year.
The revenue increase was due to strong demand.
To reach the African American audience, which drove improved pricing.
The biggest revenue increases or on the Ricki Smiley morning show in the D. L. Hughley show adjusted EBITDA in our reach segment was up by 43% for the quarter.
Net revenues for a digital segment increased by 49.6% in first quarter to $15.5 million <unk>.
Sponsored and branded content with a primary direct sales drivers and Q1, a traditional budgets continued to shift to digital and video.
Just an EBITDA increase for the quarter by 94%.
We recognized approximately $56 $4 million of revenue for our cable television segment during the quarter an increase of 22%.
Cablec adverts cable television advertising revenue was up $46, 9% excluding political.
With a favorable right volume impact to $5 million.
$700000, a free video on demand at thought.
A million dollars five increase for Cleo T V advertising.
And a million dollars six <unk>.
Favorable AGU burn off and increased advertising related to you one on one on this.
Cable television affiliate revenue was up by 1.9% for the quarter driven by rate increases and convert in some pretty substance paying subs, which was parts partially offset by chance.
Cable subscribers T V. One is measured by Nielsen finished Q1 $46.8 million compared to $49.3 million at the end of Q for Cleo had 41.8 million Nielsen subscribers.
We recorded approximately $2 million cost method income less administrative expenses for our investment in the MGM National Harper property quarter compared to $1.7 million last year and $1.7 million in 2019.
Operating expenses, excluding depreciation and amortization impairments in stock based compensation increased to approximately $73.3 million in Q1 compared to $65.2 million in Q1 of 2021.
As a result of the continuing reopening of the economy and increase in revenue. The following operating expenses increased from prior year programming content and I'm alteration at our cable television segment increased by $2.2 million outside services, including contract talent and consultancy fees increased by two.
$1 million marketing and promotional spending increased by $2 million.
Revenue variable expenses increased by $1.9 million an employee compensation.
Compensation increased by approximately $933000.
C N O chase costs were down by $1.1 million.
But her added back to adjusted EBITDA.
Radio operating expenses were up 1.3%, 90% of the revenue increases falling to adjusted EBITDA.
Expenses relating to the revenue increase such as music licensing fees sales commissions and bonuses were up so.
A successful collection efforts drove a favorable bad debt allowance adjustment.
Reach media operating expenses were up by $1 million against the revenue increase of $2.2 million affiliate fees and commissions drove most of the increase.
Operating expenses and the digital segment were up by $2.8 million driven predominantly by variable expenses related to traffic acquisition.
Sales and also increased video production costs cable television expenses were up $4.6 million a year over year program and content expense increased by approximately $2.2 million sales and marketing spend it television one was up by $1.9 million.
Operating expenses and the culprit and elimination segment with down including a favorable year over year variance for the Richmond Casino chase cost of $1.1 million.
For the first quarter consolidated broadcast in digital operating income.
Somali $48 $4 million, an increase of 33% <unk>.
Interest expense was approximately $15.9 million for the first quarter compared to approximately $18 million for the same period in 2021.
Company might cash interest payments of approximately $36 million in the quarter since semi annual debt service payments are due in Q1 and Q3 of each year.
Provision for income taxes was approximately five $6 million for the quarter.
Pay cash taxes, none of refunds in the amount of $2000.
Net income was approximately $16.4 million or 32 cents per share compared to $7000.00 per share for the first quarter of 2021.
Capital expenditures, where approximately $1.6 million.
Executed estopped first tax repurchase of 2000, and 649 shares of class the common stock in the amount of $10000.
As of March 31st 2022, total gross that was $825 million or ending cash balance was $166 $4 million.
Resulting in a net debt of approximately 6600 $59.1 million compared to $162 million of LTM reported adjusted EBITDA for total net leverage ratio of 4.07 times.
With that I'll hand back too thank you Peter.
Again, I want to reiterate that we will exceed the high end of our $45 million to $150 million of EBITDA guidance for 2000, 2002, we feel comfortable about.
That number.
Even if there is a continued economic slowdown.
And and again the Richmond.
Update as a work in progress further along than we.
Have been in.
Since December but yeah.
Not all the way there yet but the optimistic.
Operator, I'd like to open it up for questions.
Slowly ladies and gentlemen, if you do have questions press, one then zero on your Touchtone phone.
Hearing indication you've been placed into the queue and may remove yourself from the queue by repeating the one then zero command.
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Our first question will come from the line of Aaron What's with Deutsche Bank Go ahead. Please.
Globally.
Your line is open go ahead Mr <unk>.
Hi, guys. Thanks for having me on.
I appreciate the color that you gave around the AD environment on the <unk>.
Radio side I was I just wanted to clarify something so I know you said that the that pacings are moderating and I was curious if they're moderating because the cops are tougher as you move forward through the year or if there's actual softening coming through.
Concerned.
Yeah. Good question depends on this segment digital is moderating mostly because the paintings were so strong and and Q2 three and four of last year.
Radio is moderating I think just because of Ah of economic slowdown.
And so I mean, if there's a big difference between.
Mid teens, pacings and mid Single-space things right now.
I don't know how strong political there's gonna be a.
It could be it could it could be gangbusters political yeah, well look we know it's going to be and number two.
Compared to last year, but pets political is highly dependent upon the nature of the races close races runaway races Gal.
Yeah, so yeah.
We Ah that's.
That's yet to be seen that could that could be upside there, but yeah.
There is absolutely a slow down.
Of economic activity petition, particularly on the national level you know.
In the radio business, but look you can turn on C N B C and see that right now.
And it doesn't mean, it's going to be a recession right. Yeah I just saw David Rubenstein today that you know.
C N B C and now his prediction is yeah, you're gonna have yeah.
Wage pressure, yeah, higher inputs pressure, but he thinks that growth slows, but doesn't push us and and to recession territory.
If interest rates go up and wage inputs costs will go up earnings are going to slow and and I think you're seeing that.
In the market.
Where.
Multiples are pressing just across all sectors because of those factors and.
Doesn't mean, there won't be some breakout performances.
Flee we can be one of those but you know I I think that's where we are so.
Okay that that's helpful context, and one other question I just wanted to ask you was around share within the kind of local market place do you feel at radio and your stations are maintaining their share of may.
Maybe you're taking some chair versus other local media curious the dynamics are saying right now, they're maybe versus outdoor digital yeah. We.
We look I I I have I've got no color on radios share versus other mediums and the local markets right.
Because we just don't get information on how much.
The total local AD pie outdoors, taking versus radio versus versus digital.
We can get our own performance and share against the other radio competitors. We just don't have that information right. This second we're happy to provide it.
Offline just <unk>.
High level, though.
Our national platforms.
Digital radio.
National radio, whether it's our syndication business or our national.
R. R. R. R R a regular national business plus or.
A radio station digital business or are outperforming just the traditional spots and thoughts on the on the terrestrial radio stations. So.
Yeah, if you put those two.
Ah yes together.
Where.
We're doing just fine there's you know.
Local may be lagging a bit but I'd have to go in and unpack that market by market I'm happy to do that for Ya.
Line they'll take a.
Take a little research.
That's that's great. Thank you for the time.
I appreciate it.
We'll go next to line of Sudan about erosion with Florida, but go ahead. Please.
Yeah, Hi, Thank you for taking my questions a couple of questions sofas.
I just wanted to go back to your outlook.
You've kind of raised your guidance lately, but you are going to be exceedingly I end of prior guidance, but I just kind of given what you've done in Q1 around your pacing at about $160 million 100 on an annualized basis and typically two one I think is kind of the weakest corner.
You know could you kind of you know is there any and you're expecting in the back half that you know that precludes you from being more constructive.
From a guidance perspective, and then second.
Second on on the casino could U S U kind of prep or the second referendum do you expect to see any spike in expenses and how much.
Yeah Yeah.
So to get questions, we specifically chose not to give a new guidance number because you know I I don't know what the economy Hill with the affected the economy is gonna be yeah, and so I just said, we're going to exceed it you know.
You're gonna have to sort of make an estimation.
Yourself on how much you think we're gonna exceeded by now.
We don't want to throw a number out there now we throw a number out there and that doesn't happen people would be disappointed so I think.
Saying is we're gonna beat what we told you last time and.
And and and that's kind of how we're thinking about I hope that you know.
There there isn't any significant economic slowdown, but I do feel like that there is you know.
Absolutely one occurring now.
On the casino.
You can absolutely expect expenses to go up if we if we secure.
Second referendum, we probably spent about $4 million last year.
On that on that referendum I don't see any reason why we would spend less than that then that given we lost last time, we might end up you know.
Spending more you know this go around.
Try to cover off some constituencies that we didn't put a lot of resources towards.
Ah last time.
And so.
We haven't developed the budget for the second referendum, yet I think what we have in our budget right now.
Now is the same amount of money last year, but ER Peter do.
In our guidance do we have yeah, we do we have a referendum sycara, we adjusted out right. So we'd give adjusted EBITDA. We'd go include so I've got numbers bird and my focus with US no one's going to see those and adjusted EBITDA. Okay.
They do flow through.
The expense lines in the press release, but they don't.
Alright, so when we're giving U R.
Adjusted EBITDA guidance.
It's not taken into account the referendum expenses for the second go round.
Got it and then I just had one more follow up since.
There is some concern about a slowdown as we get to the end of the year and into next could you revisit for US you know your leverage targets.
You mean, you know.
It will be you know the political year would be behind.
23 is going to be Ah, Yeah, I made known your when you're talking about and where you should be none of the casino.
Net of the Casino you Wanna you mean, the $100 million is spent on the casino as well so you'll have 100 million this year earmarked for the procedure and that.
Yeah, So I'm, assuming that the casino project happens and we spend.
Call at $10 million cash this year on the things we would need to do and include in not just referendum brings wouldn't normally other things we would need to do I still have was below four times at the end of this year.
So you know.
Hi is three's.
And that that is almost 100 million goes away for the casino.
Then the rest of that will go in.
Two three of next year and out projections right. So you go.
You got the bulk of it being put in in Q3 of next year, we think which point I have is.
Just above for a little above full but not much so that's the impact.
So we get below below four and then if we spend $100 million then tall rose is back above four and we stay around four and my projections through the end of next year and then we draw you know the Loaf, Oregon and 24, you know mid threes and then luxuries thereafter, so that's kind of.
I mean, these are projections Roy who knows but that's that's how we were thinking about it including enrichment.
Thank you.
Welcome Thank and if there isn't any additional questions. Please take this opportunity now to press. One then zero on your Touchtone phone.
We'll go next to the lineup Patrick Lang with Voya investments go ahead. Please.
Yes, hi, Thank you. Good morning could you talk about T V. One cause that's what we're happy we're avenue and <unk> and so what the dynamics there for 2022.
Since like doing very well.
Yeah I T V. One is doing very well at a do over $100 million of EBITDA. What did we do last year, Yeah 90.
95, we'll do over 100 of that 155.
About 150 GB one's gonna be sort of you know one O seven one O eight.
Ratings are are are hanging in there.
Doing well and Ah it's in good shape I mean, you know I expect T V. One.
Yeah.
To stay at $100 million of EBITDA.
Are better for the next four years now I feel pretty comfortable about that.
<unk>.
Mmm Gal, that's including sort of the degradation of the pay T V ecosystem.
What I mean by that sub losses, due to you know turn and streaming and all that kind of stuff.
Yeah, we still have to figure out what do we I mean like.
Like every other cable.
Television.
Programmer you Gotta figure out how.
How to stake out your position in this new world that will include.
Linear cable and streaming and digital video and and and bass channels.
Yeah, but and I struggle with it you know there was a time, yeah I would say in.
In 2019, where a lot of investors loved radio more than you know they.
Loved cable television and then the pandemic happen in radio got crushed and cable television did really.
Really well because people were inside they were watching T V. And then you got you got two revenue streams yeah.
With radio you've got more control of your Destiny Tru you own your distribution with cable television you're relying on third parties you know.
For distribution.
So I again I struggle with.
You know how I feel about these two businesses visa B. One another you know both of them are challenged by digital disruption, which is why I'm happy that word diversified you know I think radio has a long tail on it in terms of still being.
A useful and valuable add medium.
You know over time, you know to to to to advertisers, but you can't deny the fact that advertisers do backflips to buy a T.
T V impressions.
With the you know when they add broadcast television into networks, you know as table came into existence and started to grow advertisers paid increasingly higher C. P M to reach smaller audiences at the broadcast networks cause.
Their preferred advertising medium yeah, so having a stake in in both areas is is I think important I don't believe that.
And now the streaming guys are having their challenges I Netflix is losing sobs Seattle.
And so there's gonna be some Milan ish of all of these different distribution systems that ultimately ends up being the status quo.
And just bitcoin.
The current step counts for T V. One.
Right now I'm.
I'm sorry.
What's a subscriber.
Warner and.
T V. One.
Yeah, I just gave it for television and Cleo didn't one yeah I I just gave you that so.
Go back in my nose.
Alright, so $46.8 million.
The T V. One.
And 41.8 million Nielsen substance Leo.
Which is great we launched clear what two and a half years ago and now it's you know got almost as many sub.
This is T V. One class a free network T V. One gets a license fee part of the reason we wanted cleo to be free. So we can get the distribution up quickly and and monetize that so.
By the way part of that.
It may be uncomfortable that's gonna stay above 100, you know.
For the next four years is the fact that we've successfully created another network.
At scale.
When I say at scale at a scale large enough to monetize that on a on a on a real basis and and that's helping us drive more AD revenue and.
And maintaining Ah Ah EBITDA, even in the face of.
Climbing pay television subscribers.
Let me just let me just start off with a bit of color on the number. So often so you can't extrapolate queue through the years. So you can't take the 45% AD revenue growth of T. V. One just extrapolate that but what I you know what.
Were saying and what we're projecting.
Obviously would come out and higher rates demand is strong. So we are seeing on projects and double digit.
AD revenue increases for the rest of the year and indeed for the whole year and then only affiliate side we.
We were up marginally 1.9% in Q1 with modeling you know moderate declines for the rest of the year. So you could think about me the affiliate revenue as being maybe down low low single digits and so when you combine those I think he was still gonna hopefully see double digit.
On the top lines of T V. One this year when you combine those lines.
Alright.
Great.
Question is regarding the MGN Harbor steak Ah Ah where does it show up on the income statement cause I don't see a equity.
<unk> definitely consolidator, assuming that you'd be that whatever that might be 50 million is not into.
Yeah.
Celebrate EBITDA number.
Yeah. It is and it comes through as other income and the and the corporate line.
Okay.
Yeah, you'll you'll see that in the press release.
You'll see at the bottom of page, you'll see it at the bottom of page three is it right in front of an item, but then you'll also see.
And the culprit elimination segment under other income that.
Which is 149.
Right. So so the current arrangement with M. G M.
Put a bowl.
So what's your current thinking on that steak or are you happy with the status quo.
It's a good question, we think that steak. It's it's political now at at at its full multiple value of seven times, So that stakes worth over $100 million, Yeah, we only take in about $8 million of income.
A year on it so we're only getting whatever are trading multiple is on that $8 million. So we probably think that stake is worth twice, what we get value for it and so right now we're going to hold on to.
To it you know this year now we believe that.
It's EBITDA will grow again this year, particularly cause this is the first full year of sports betting.
And and and the state of Maryland, and their sports book opened.
But it's an option I mean, you know one way to think about us as you know.
[noise], there's another 50 plus million dollars of of a value that you know is a captured now I don't think anybody ever does that math I mean, some people do right.
Yeah, but in fact the matter is is.
Yeah, the only way you really guarantee getting value for that is you monetise it and pay down debt.
R. R U monetize it and by cash flow with the residual value or something yeah. So we're not planning to do anything with it today, we certainly wouldn't put it you know the window to put it is past.
For the for this year, so we couldn't put it until the first quarter of next year anyway.
Okay now.
Now I've got the leveraged down to four times.
When he gets another couple of turns leverage.
What's your thinking on on the.
Cash generating from a business.
Looking pretty strong probably in excess of 80 million.
Going forward I'm free cash so what what's what's your plan on that free cash how do you understand that.
Okay, Yeah, I mean Ah Ah I think I've said on the last conference call, we want to wait and see you know, what's gonna happen with rich men.
We've you know you know we're looking at some.
Strategic.
<unk> opportunities you know in.
And.
And the radio business, particularly in you know some markets that we already exist and.
We're being we're being careful imprudent, you know I like our leverage you know where.
Where it where it's at today I'd like to get it lower.
I think that we we'd like to ultimately get the company into a place where.
We can continue to create value, but we also get ourselves into a return of capital to.
To to shareholder you know position.
But you've got a balance that was I mean, if we win the casino and it's definitely worth putting $100 million and to that opportunity and we will create a lot more value and we look at the same way for for him any opportunities, but ultimately.
You know as.
The largest shareholder you Wanna get the company to a position where you can have the leverage low enough where you can return capital we we.
We announced a share buyback last the last quarter, we have been executed on it you have the share price moved all on its own we didn't we didn't we didn't buy anything yeah cause when it when it when it was high three or $4. We definitely felt it was.
Was undervalued.
But by the same token multiples or compressing so yeah, I don't know what the market is ultimately going to value.
Media cash flow at right cause we're a mixed up radio or cable and then we got digital.
And so.
But I I I am interested in getting to a position.
Ah.
Of being able to return capital to to shareholders, whether that's through a.
Combination of buybacks and dividends, you know or or one or the other but look if we have to spend $100 million out the door that's going to change.
That's gonna stall our leverage profile.
At where it's at right now we're not Gonna you know, it's gonna take us a year to get back down.
Below four if we have to invest $100 million into the Richmond Casino project.
Alright.
It's just a quick follow up on that that Richmond project at the your partner or P. G. P. A is just underwent a.
With the new owner has anything changed with the new owner shot yeah, well I'm glad you mentioned because I had hadn't mentioned it yes P. P T where he got bought by Ah Churchill Downs I've spent a lotta time with the Churchill Downs.
C E O and yeah, and his team and while teaching he was was a great partner with us they wanted to do.
Just deal with us and we were successful in winning the RFP.
Churchill is just as excited if not more excited about partnering with.
With us cause you know I think that they.
Would like to see.
The class three happened in Richmond cause that would be yeah, that'd be gravy for them right cause you know they.
They agreed to buy it after we lost the referendum right now and so we didn't we didn't get the referendum back on through the courts and stuff until after.
After that that that made the announcements so that would be all gravy and upside, but there are much bigger company with a much bigger balance sheet and a much bigger brand in in the gaming and leisure space and I think that that.
That will be helpful. In a second reference Linda run enrichment because.
It's a different partner now, which I think has got.
More cache I hope that matters and the other thing is that they certainly have more economic resources, so should we need.
Need more capital for the Richmond project, you know they have indicated that you know they Wanna you know they want to participate at a higher level. So so that's all good Gal, there's nothing there's nothing bad about Churchill taken over to repeatedly and know the terms of the deal have not changed.
But just like everything else the cost of that bill It out now I know for sure there's probably increased by 10%.
We yo modeled it out.
Last year, and and it'll be good to have a capital partner at the table that yeah can help take up some of that slot.
Great.
Thank you so much.
Q.
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