Q1 2025 Urban One Inc Earnings Call
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.
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 13th 2020, but 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 AR.
A replay of the conference call will be available from two o'clock P. M. Eastern daylight time may 13th 2025 until 11 59 P. M. Eastern daylight time may 20th 2025.
You may access the replay by calling one 870 702030 international callers may dial direct 1609, 890 909. The replay access code is 7968738 access to live audio and a repo.
The conference 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.
Speaker Change: 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.
Welcome everybody to our first quarter 2025 results conference call.
Speaker Change: As usual joined with Peter and I are Jody <unk> Who's our TV, one chief financial officer for any TV question.
Speaker Change: Karen Wishart, our chief administrative officer, and also Christopher Samson Hu.
Speaker Change: Who is our general counsel.
Speaker Change: You've seen the earnings release Q1 results.
Speaker Change: Largely in line with the guidance that we gave Q2 radio pacings.
Speaker Change: Have weakened since our last conference call.
Speaker Change: Theyre roughly down about 9% now however, as I've said on the conference call.
Last quarter.
Speaker Change: Our television ratings seem to that stabilize.
Speaker Change: In Q1, and Q2 and are aligned with what we budgeted so with that.
Speaker Change: Sure.
Speaker Change: Continuing to reaffirm the guidance that we gave of $75 million.
Speaker Change: EBITDA.
Speaker Change: Something again to note on our 2020 for EBITDA, which was about 103 almost $10 million of that.
Speaker Change: Was a noncash adjustment for that.
Speaker Change: The TV one 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.
Speaker Change: Still not a.
Speaker Change: Our stellar.
Speaker Change: Year over year.
Speaker Change: Performance gallon.
Speaker Change: Backwards, but what.
Speaker Change: What we are.
Speaker Change: We have expected so with that.
Speaker Change: <unk> said that we're going to continue to focus on our cost.
Speaker Change: Cost control is manage our leverage.
Unknown Attendee: and maintaining a strong liquidity position.
Speaker Change: And maintaining a strong liquidity position one of the things that came up in the last conference calls, what where are we going to do with our $137 million.
Alfred Liggins: One of the things that came up in the last conference call is, you know, what were we going to do, you know, with our $137 million, you know, of year in cash.
Speaker Change: All of the.
Speaker Change: Year end cash and since that conference call we've actually.
Alfred Liggins: And since that conference call, we've actually bought back in the open market, you know, $88.6 million of our debt at an average price of about $153.9 million. 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.
Speaker Change: Bought back in the open market.
Speaker Change: $88 $6 million.
Speaker Change: Our debt at an average price of about 53 nine.
Speaker Change: And we've reduced our gross debt.
Speaker Change: $1 million to $499 million and we're still sitting on.
Speaker Change: $80 million of cash on hand at present with an undrawn revolver.
Alfred Liggins: So, you know, we we continue to be focused on deleveraging and maintain the liquidity position. And so in a difficult environment, you 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.
Speaker Change: So we continue.
Speaker Change: Continue to be focused on.
Speaker Change: Deleveraging.
Speaker Change: And maintaining the liquidity position and so.
Speaker Change: In a difficult environment, you got to make sure that.
Speaker Change: Prudent and you.
Speaker Change: Can you make.
Speaker Change: Move.
Speaker Change: Move to do that.
Speaker Change: Keep you in the best possible position.
Position of flexibility in terms of.
Speaker Change: <unk> leverage and.
Speaker Change: And expense control and Thats what were.
Speaker Change: Really focused on so with that I'm going to turn it over to Peter to get into the specific details of our numbers and I will hop back upwards.
Alfred Liggins: 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 to the leverage.
Peter Thompson: Thank you Alfred So consolidated net revenue was 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 seven 7% year over year.
Peter Thompson: 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%.
Peter Thompson: According to Miller Kaplan, our local AD sales were down 12, 8% against markets that were down 13, 2%.
Peter Thompson: National AD sales were down 14, 6% against a market being down 11, 6%.
Peter Thompson: 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 healthcare, entertainment, retail, government, auto, food and beverage.
Peter Thompson: Our largest radio AD category was services, which was which was up 11% driven by.
Peter Thompson: Legal services travel and transportation was up 17% for us our smallest category teller.
Peter Thompson: Telecom financial categories were up low single digits.
Peter Thompson: All of the other major categories were down, including Health care Entertainment retail government auto food and beverage.
Peter Thompson: Net revenue for each media segment was $5.9 million in the first quarter, which was down 30.9% from the prior year.
Peter Thompson: Net revenue for each media segment was $549 million in the first quarter, which was down 39% from the prior year.
Peter Thompson: 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.
Peter Thompson: Adjusted EBITDA reach was a loss of $600000 for the quarter combination of client attrition low.
Peter Thompson: Our average unit rates drove that decline.
Peter Thompson: 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 recognize approximately $44.2 million of revenue from our cable television segment during the quarter, a decrease of 7.9%. Cable TV advertiser revenue is down 6.3%, TV One delivery declined 18% in total day persons, 2554, which is partially offset by an increase in Clio TV, which was up 29% in total day persons, 2554 delivery.
Peter Thompson: Net revenues for the digital segment were down 16, 2% in Q1 of $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.
Peter Thompson: And that impacted adjusted EBITDA.
Peter Thompson: Which was $58000 compared to $2 3 million in prior year.
Peter Thompson: We recognized approximately $44 $2 million of revenue.
Peter Thompson: Television segment during the quarter, a decrease of seven 9%.
Peter Thompson: Cable TV advertising revenue was down six 3% TV wanted to clip delivery declined 18% in total day post was $25 54, which is partially offset by an increase in Cleo TV, which was up 29% and total day persons 25, 54 delivery and also favorable AUR and <unk>.
Peter Thompson: 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 is down by 10% driven by subscriber churn, which is about $3.3 million, partially offset by a million three, which is a combination of subscriber rate increases on 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 price 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.
Peter Thompson: Fast revenue.
Peter Thompson: $1 1 million.
Peter Thompson: This resulted in a net AD revenue decline of one 7 million.
Peter Thompson: Cable TV affiliate revenue was down by 10% driven by subscriber churn, which is about $3 $3 million.
Peter Thompson: Lastly, offset by a $1 million three which is a combination of subscriber rate increases on the launch of now TV.
Peter Thompson: Cable subscribers with TV, one as measured by Nielsen finished Q1 at $35 6 million compared to $37 2 million at the end of Q4, Cleo TV had 35 million Nielsen subs.
Peter Thompson: Operating expenses, excluding depreciation and amortization stock based compensation and impairment of goodwill intangible assets are long lived assets decreased to approximately $87 million for the quarter.
Peter Thompson: Increase of eight 6% from the prior year.
Peter Thompson: The overall decrease in operating expenses was 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 our promotions and employee compensation costs.
Peter Thompson: The overall decrease in operating expense was primarily due to lower third party professional fees in the corporate segment lower content expenses for cable television.
Peter Thompson: Our employee compensation as a result of recent cost savings measures.
Peter Thompson: Radio operating expenses were down two 9% or approximately <unk> $9 million driven by lower employee compensation costs.
Peter Thompson: Reach operating expenses were down one, 7% again, driven by lower employee compensation cost.
Peter Thompson: Operating expenses in the digital segment were up three 2% and that was driven by higher traffic acquisition costs, partially offset by lower employee compensation.
Peter Thompson: <unk> expenses in the cable TV segment were down 10, 8% year over year, driven by lower programming content expense on our promotions and employee compensation costs.
Peter Thompson: Operating expenses in the corporate and elimination segment were down by approximately $3.8 million, driven by lower third-party professional fees.
Peter Thompson: <unk> expenses in the corporate and elimination segment were down by approximately $3 $8 million driven by lower third party professional fees.
Peter Thompson: 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%.
Peter Thompson: 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%.
Peter Thompson: 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 from Q1 down from $13 million last year due to the lower overall debt balances as a result of the company's debt reduction strategy. Company made cash interest payments of approximately $21.6 million in the quarter.
Peter Thompson: 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 in interest bearing investment accounts interest expense decreased to.
Peter Thompson: So approximately $10 9 million in Q1 down from $13 million last year due to the lower overall debt balances as a result of the company's debt reduction strategy.
Peter Thompson: Company made cash interest payments of approximately $21 $6 million in the quarter.
Peter Thompson: During the quarter, the company repurchased $28.2 million of its 2028 notes at an average price of 58% of par, bringing the balance at quarter end to $556,348,000.
Peter Thompson: During the quarter the company repurchased $28 $2 million of its 2028 notes at an average price of 58% of par.
Bringing the balance at quarter end to $556.348 million.
Peter Thompson: In April, the company purchased an additional $60.4 million in notes at a net price of 51.9%. And as Alfred said, that brings the current balance on the debt to $495,930,000.
Peter Thompson: In April the company was purchased an additional $64 million of notes.
Speaker Change: 61, 9% and as Alfred said that brings a ton.
Peter Thompson: Balance on the debt to $495 million $930000.
Peter Thompson: We recorded $6.4 million in non-cash impairments in Q1 against the carrying value of FCC licenses in five radio markets.
Peter Thompson: We recorded.
Peter Thompson: $6 4 million and noncash impairments in Q1 against the carrying value of <unk>.
Peter Thompson: <unk> licenses in five of our radio markets.
Peter Thompson: Association, 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 NRL balances.
Peter Thompson: The Dallas, Indianapolis, Raleigh, Philadelphia Cleveland.
Peter Thompson: The provision for income taxes was approximately $15 7 million for the first quarter.
Peter Thompson: We booked an additional $14 $6 million valuation allowance against the NOL.
Peter Thompson: Balances.
Peter Thompson: Company paid cash income taxes in the amount of $33,000. Capital expenditures were approximately $2.5 million.
Peter Thompson: We paid cash income taxes in the amount of $33000.
Peter Thompson: Little expenditures were approximately $2 $5 million.
Peter Thompson: Net loss was approximately $11.7 million or $0.26 per share compared to net income of $7.5 million or $0.15 per share for the first quarter of 2024. During the three months end of March 31, 2025, the company repurchased 449,200 shares of Class A common 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, an amount of approximately $30,000 at an average price of 87 cents 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.
Peter Thompson: Net loss was approximately $11 $7 million or 26 per share compared to net income of <unk>.
Peter Thompson: Seven 5 million or <unk> 15 per share for the first quarter of 2024.
Peter Thompson: During the three months ended March 31, 2025, the company repurchased 400, <unk> 9200 shares of class a common stock in the amount of approximately $700000 an average price of $1 48 per share.
Peter Thompson: And we also repurchased 303622 shares of class B common stock the amount of approximately $300000 an average price of 87 per share.
Peter Thompson: As of March 31, total gross debt was approximately $566 $3 million ending unrestricted cash was $115 $1 million.
Peter Thompson: Looking at net debt of approximately $441 $3 million.
Peter Thompson: Compared to $94.1 million of LTM reported adjusted EBITDA for a total net leverage ratio of 4.69 times.
Peter Thompson: Compared to $94 $1 million of LTM reported adjusted EBITDA for a total net leverage ratio of 469 times.
Peter Thompson: 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 day on this call. A number of questions came up, so we thought we'd just give you the comps from prior quarters with those recast numbers.
Peter Thompson: Finally, we recast the.
Peter Thompson: Comparable periods for 2024.
Peter Thompson: To reflect the move of $7 9 million.
Peter Thompson: CTV revenue from digital television.
Peter Thompson: And also the reapportionment a cross platform sales and marketing expenses.
Peter Thompson: It's about that on the last earnings call a number of questions came up so we thought we'd just give you the comps.
Speaker Change: In prior quarters with those with those recast numbers and with that I'll hand back to <unk>. Thank you very much operator.
Alfred Liggins: And with that, I'll hand back to you, Alfred.
Unknown Attendee: Thank you very much, operator.
Unknown Attendee: I'm going to go to the lines for a Q&A. We will now begin the question and answer session. If you'd like to ask a question, simply press star, then the number one on your telephone keypad.
Peter Thompson: Yes.
Speaker Change: From the lines for Q&A.
Speaker Change: We will now begin the question and answer session, if you'd like to ask a question simply press Star then the number one on your telephone keypad. Our first question will come from the line of Brexit. So next financial Inc. Please go ahead.
Ben Briggs: Our first question will come from the line of Ben Briggs with StoneX Financial, Inc. Please go ahead.
Speaker Change: Yeah.
Ben Briggs: Hey, good morning, guys. Thank you for taking the call. Absolutely. Yeah, so a couple here. So first of all, I do notice you guys did some cost cutting during the quarter. The, you know, both the programming and technical expense line, and SG&A and corporate line, I think we're down a little bit.
Speaker Change: Hey, good morning, guys. Thank you for taking the call.
Speaker Change: Absolutely.
Speaker Change: Yes.
Speaker Change: So a couple here so first of all I do notice you guys did some cost cutting during the quarter.
Speaker Change: Yes.
Speaker Change: Both the programming and technical expense line.
Speaker Change: SG&A corporate line I think we're down a little bit what other levers do you have.
Alfred Liggins: What other levers do you have that you can pull to kind of control costs as the year goes on and in the We haven't got there yet, probably we'll focus on that so that it's done by the middle of the year. So really focused on kind of like an end of June execution date on that.
Speaker Change: You can pull to kind of control costs as the year goes on and in the future.
Speaker Change: I said last.
Speaker Change: The conference call that.
We did a bunch of year end last year.
Speaker Change: Cost cutting measures and I think I say this about 5 million Bucks.
Speaker Change: We are focused on.
Speaker Change: Ah.
Speaker Change: <unk> taken another look at that for this year, we have at <unk>.
Speaker Change: Their debt.
Speaker Change: Hawaii will.
Speaker Change: Focus on that so that.
Speaker Change: It's done by the middle of the year so.
Speaker Change: Really focused on kind of like an end of June.
Execution date on that and.
Alfred Liggins: And so look, I don't want to go into specifics, quite frankly, I don't have all of the opportunities off the top of my head, and even if I did, I certainly wouldn't want to announce them on a conference call, you know, let's say we do believe that there are other opportunities and plan to take advantage of them. But we're really managing, you know, to, you know, to our guidance, you know, and then looking to see if we're doing better. Our guidance of 75 does not include any back path cost cuts that are going to be required.
Speaker Change: And so look I don't want to go into specifics quite frankly, I don't have all of the opportunities.
Speaker Change: Off the top of my head and even if I did I certainly wouldn't want to announce them on a conference call.
Speaker Change: Yes, yes.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: Let's say, we do believe that there are.
Speaker Change: Are the opportunities.
Dom: And Dom.
Speaker Change: And plan to take.
Speaker Change: Take advantage of them, but we're really managing to two.
Speaker Change: To our guidance.
Speaker Change: And then what we've been doing better our guidance of <unk> 75, not include any back half cost cut that.
Speaker Change: Hi.
Ben Briggs: Got it. That's helpful.
Speaker Change: Got it.
Speaker Change: Got it that's helpful. Thank you so.
Unknown Attendee: Thank you.
Ben Briggs: So um, you know, that's a great segue into my next question, which is, I feel like you had indicated that we should expect the majority of EBITDA to come in the second half of 2025. Am I remembering that correctly? Hang on. Yeah. We're getting close. Repeat that. Sorry, I apologize. I said, I feel like you had indicated that you're expecting the majority of EBITDA this year to come in the second half of the year. Do I remember correctly? Is that accurate? Yeah, so more than more than half for sure. Right, right.
Speaker Change: That's a great segue into my next question, which is.
Speaker Change: I feel like you had indicated that we should expect the majority of EBITDA to come in the second half of 2025.
Speaker Change: Yes, Thanks Anthony.
Anthony: Sorry repeat that.
Anthony: Sorry, I apologize I said I feel like you had indicated that you are expecting the majority of EBIT. This year to come in the second half of the year is that.
Anthony: Remember correctly is that accurate.
Anthony: Yes, so more than more than half for sure.
Anthony: Right right can you give any guidance for what you think the second quarter has been store as far as.
Alfred Liggins: Can you give any guidance for what you think the second quarter has in store as far as As far as the expectations. I don't think we're going to give specific guidance. I think from the pacings, you know, Alfred said that radio is weak and dry, or relative to where we were last time, so we should expect that to be down. Digital, almost all of our profit is forecast to be in the back half of the year, so not going to be strongly profitable in the second quarter.
Anthony: As far as.
EBIT expectations.
Yes.
Anthony: Until then we're going to give specific guidance I think from the <unk>.
Anthony: It said that radio is weak and dry or relative to where we were last time. So we should expect that to be.
Anthony: To be down.
Anthony: <unk>.
Anthony: Digital.
Digital almost all of that profit is forecast to be in the back half of the year, So now going to be.
Anthony: Strongly profitable in the second quarter, and then T V.
Alfred Liggins: And then TV. TV One ratings down a little bit, down a bit, being compensated for by Clio. We're hitting our budget numbers in terms of delivery, and so there might be some upside in the back half of the year, but looking at where radio is at, you know, that might need to wash against, that might need to wash against radio. So I think. Q2 will be a little bit better than Q1, but similarly weak, and then we've got to deliver in the back half of the year. Got it, got it.
Anthony: TV, one ratings down a little down a bit then.
Anthony: Compensated for by Cleo.
Anthony: We're hitting our budgeted numbers in terms of delivery and so there might be some upside in the back half of the year, but looking at why radios app that might need to wash against.
Anthony: But mind you to wash against radio so.
Anthony: I think Q2 will be a.
Anthony: A little bit better than Q1, but as you know similarly weak and then we've got to deliver in the back half of the year.
Anthony: Got it got it and then and then finally, obviously there have been.
Alfred Liggins: And then finally, obviously, there have been additional debt repurchases. I know that the market likes to see those. Should we expect further debt repurchases as the year goes on? Or is it more? As I've been told many times before, the best predictor of the future are actions of the past. You've heard that too? I have, I have. Yeah, I mean, look, I mean, we try, not try, we deliberately, you know, are opportunistic, right? Like, you know, we don't like it when, you know, we announce, hey, we're going to go in the market. And then everybody looks at that as an opportunity for, you know, our debt to trade up and expects us to pay more, right?
Anthony: And then additional debt repurchases.
Speaker Change: I know that the market likes to see those should we expect further debt repurchases as the year goes on or or is it being more.
Anthony: Hey.
Anthony: As I have been told many times before the best predictor of the future and there are actions of the past.
Anthony: Yes.
Anthony: You've heard that too.
Anthony: Yeah.
Anthony: Yes, I mean look I mean.
Anthony: We try not dry we deliberately.
Anthony: Our opportunistic right like we don't like it when we.
Anthony: Now I'll tell you we're going to go into market and then everybody looks at that as an opportunity for now our debt to trade up and expect us to pay more right now.
Alfred Liggins: You know, and so we're in, we're out, we got a price that we want to try to get it at. It's nothing personal to debt holders. But at the end of the day, buying back debt at a discount for those funds that want to sell, you know, ultimately helps the company. And so, yeah, you know, we'll, we'll, we'll, we'll continue to do that. Almost always, though, anytime we go into the market, the price goes up, right? Just because, you know, you got, you, you, you, you, you were the most motivated buyer, right? You know what I mean?
Anthony: And so we're in we're out we got a price that we want to try to get it at its nothing personnel to debtholders, but at the end of the day buying back debt at a discount for those.
Anthony: Funds that want to sell.
Anthony: Yes.
Anthony: Ultimately it helps the company and so yes, we will.
Anthony: We'll continue to do that almost always though anytime we go into the market. The price goes up right just because.
Speaker Change: You got.
Anthony: Yeah.
Anthony: We are the most motivated buyer right.
Alfred Liggins: Yeah. And I think at the end of the last conference call, you know, you know, the debt had been trading at like 49 and a half, you know, and then when we got to the market, you know, literally that same day or shortly thereafter, I think our cumulative purchases during that period of time, we're kind of like almost at 52, right? Yeah. So, yeah. Yeah. We're okay with that. Like, you know, I mean, that's, you know, you know, we had some big trades of people who, you know, wanted to exit and wanted to see, you know, you know, some, some, some, some sort of uplift.
Anthony: And I think at the end of the last conference call.
Anthony: No.
Anthony: The debt had been trading at like 49, and a half and then when we got into the market.
Anthony: <unk> literally that same day or shortly thereafter, I think our cumulative purchases during that period of time, where it kind of like almost at 52 right now.
Anthony: Yeah.
Anthony: Yes.
Anthony: We're okay with that.
Anthony: We had some big trades of people who.
Anthony: Wanted to exit and wanted to see.
Anthony: Some.
Anthony: Some sort of uplift.
Alfred Liggins: And it's, and it's good for everybody. But as you can see, the, you know, vast, vast, vast majority of our capital is, is, is going to that. Yeah. So, I mean, you know, We, you know, we took out tens of millions of dollars of debt since the last call. And look, unfortunately, I think we're, you know, we're, we're, we're continuing to still be in a position, you know, to, to, you know, to be impactful, you know, um, you know, with that.
Anthony: And it's good for everybody, but as you can see that.
Anthony: The vast vast vast majority of our capital is going to that yeah. So I mean, yes.
Anthony: We took out tens of millions of dollars of debt since the last call.
Anthony: And looking forward I think.
Anthony: We're continuing to still be in a position to.
Anthony: To to be impactful now.
Anthony: <unk>.
Anthony: With that.
Anthony: Okay.
Alfred Liggins: If you were to draw the revolver, I don't think that would restrict you at all in Dead by Daylight, would it? No. Yeah, I mean, yeah, look, it's not, most of the people on this call are, you know, are investors and smart investors. And so, you know, it shouldn't be lost on anybody that we do have an undrawn revolver, right? You know, so, you know, that, you know, that capital is, you know, available for, you know, all things, including if we used all of our cash to buy back debt, and we needed operating funds, right, you know, to do that.
If you were to draw the revolver.
Anthony: I don't think that would restrict you at all and that buybacks would it.
Anthony: Yes.
Anthony: Yeah.
Anthony: Yes.
Anthony: Yes look it's not.
Anthony: Most of most of the people on this call are.
Anthony: Our investors smart investors and so now it shouldn't be lost on anybody that we do have an undrawn revolver right. So that.
Anthony: That capital is available for.
Anthony: All things, including if we've used all of our cash to buy back debt and we needed operating funds right.
To do that so our liquidity position is.
Alfred Liggins: So our liquidity position is, you know, remains, you know, You know, very, very soft and gives us some options. Okay.
Anthony: <unk>.
Anthony: It remains.
Anthony: Very very solid and gives us some options.
Anthony: Okay.
Anthony: Okay, Alright, I think thats going to be all from me right now.
Unknown Attendee: I think that's going to be all from me right now.
Unknown Attendee: I'll give some other people the chance to ask questions.
Anthony: Give some other people the chance to ask questions. Thanks again. Thank you very much next question operator.
Unknown Attendee: Thanks again, guys.
Aaron Watts: Our next question will come from the line of Aaron Watts with Deutsche Bank. Please go ahead.
Speaker Change: Our next question will come from the line of Aaron Watts with Deutsche Bank. Please go ahead.
Aaron Watts: Hey, Aaron. Hey, guys. Thank you for having me on.
Anthony: And.
Hey, guys.
Anthony: For having me on a couple of questions around the AD environment on the radio side.
Alfred Liggins: A couple questions around the ad environment on the radio side. I think you noted additional weakness crept in between your last call and today. To the extent we continue to get positive headlines out of DC like what happened this week. Do you think advertising can flip back positive as quickly as it's softened? What do you think your ad partners need to see or hear to start ramping spend back up? I mean, I think they need to know what their expense profile is going to look like going forward. Yeah. And and with that, you know, the the the tariff picture moving, you know, weekly, right, you know, changing weekly.
Anthony: You noted additional weakness crept in between your last call in today.
Anthony: To the extent, we continue to get positive headlines out of D. C. Like what happened. This week do you think advertising can flip back positive as quickly as it softened what do you think your AD partners a D. C are here to start ramping spend back up.
Anthony: I mean, I think they need to know what their expense profile is going to look like going forward right now and.
Anthony: And with that.
Anthony: The the tariff picture moving weekly rate changing weekly.
Anthony: Two.
Alfred Liggins: Difficult to forecast that.
Anthony: Difficult to forecast that so.
Alfred Liggins: So, unfortunately, Procter & Gamble and General Motors don't share their ad strategies with us. Actually, it's really interesting. I've had a couple high-level conversations with some monstrous advertisers. And, you know, most of these big guys, they don't wanna... Disclose what their ad budgets are, right? Like, you know, those that, you know, that's proprietary information, right? How much you're spending, you know, to compete in the marketplace. So strategy, you know, really core strategy that would result in how much money is going into the ad market into which verticals, you know, is not readily available. And I get it, you know, it's really kind of a trade secret for them, right?
Anthony: Unfortunately.
Speaker Change: Procter and Gamble and general Motors don't share their AD strategies with us.
Anthony: <unk>.
Anthony: Yes.
Anthony: Yes.
Speaker Change: It's really interesting I've had a couple of high level conversations with some monstrous advertisers and.
Speaker Change: And you know most of these big guys. They don't want to.
Speaker Change: <unk> disclosed what their AD budgets are right like those that that's proprietary information right how much youre spending to compete in the marketplace. So.
Speaker Change: Strategy.
Speaker Change: <unk> really core strategy that would result in how much money is going into the ad market into which.
Speaker Change: And to which verticals.
Speaker Change: Not readily available and I get it.
Speaker Change: Kind of a trade secret for them right now.
Alfred Liggins: You know, and so we just don't have visibility into that, but I can tell you, we do know when their ad budgets are getting cut or put on hold. And then they will tell you it's because of uncertainty. I mean, it's no secret that you've seen, you know, reports that the consumer is cooling down, cooling off or whatever, spend is slowing down, uncertainty, I mean, at the end of the day, regardless of where the tariffs land, they're gonna land at, you know, some higher level than they were before, right? You know, and that's, you know, and I saw something this morning on CNBC where, you know, they were talking about the forecast of some of these companies out there, which assume that they're gonna take all of the additional tariff expense and roll it into pass-ons, you know, to pricing.
Speaker Change: And so we just don't have visibility into that but I can tell you. We do know when their AD budgets are getting cut or put on hold and then they will tell you it's because of uncertainty.
Speaker Change: It's no secret that <unk> seen.
Speaker Change: Reports that the consumer is cooling down the cooling off or whatever spend this slowing down uncertainty.
Speaker Change: At the end of the day, regardless of where the tariff plan tariffs land theyre going to land at.
Some higher level than they were before right.
Speaker Change: And that's you know I saw something this morning on CNBC, where they were talking about the forecast for some of these companies out there, which I assume.
Speaker Change: That theyre going to take all of the additional tariff expense and roll it into pass ons to.
Speaker Change: Price increases.
Alfred Liggins: which, you know, ultimately is inflationary, which, you know, one would think, you know, there's a knock-on effect, you know, on the recession. But I'm not an economist. I don't know this economy has been, you know, chopping down, you know, trees and plowing through all kinds of, you know, of headwinds. So far be it for me to predict, you know, you know, what's truly going to cause a recession. And what its ultimate impact on the ad market now is. It's not positive at this point in time, you know.
Speaker Change: Which.
Speaker Change: Ultimately as inflationary, which one would think.
Speaker Change: There is a knock on effect on the <unk>.
Speaker Change: Recession, but I'm not an economist I don't know this economy has been.
Speaker Change: Chopping down trees.
Speaker Change: Trees and plowing through all kinds of now.
Speaker Change: The headwinds so far be it for me to predict.
Speaker Change: Whats truly going to cause a recession.
Speaker Change: And and what its ultimate impact on the AD market now is it's not positive at this point in time.
Alfred Liggins: So I guess in a roundabout way, this is just Alfred Liggins opinion period in the story. I do not think you're going to see a positive ad rebound this year, you know, because I think a lot of these guys have already, you know, once you take Dispense off the table in a corporate environment, it generally stays off the table for the remainder of that budget cycle. Yeah, now that that all makes sense. So more a hope of stabilization than any real positive, significant bounce this year. Yeah, yeah. Okay.
Speaker Change: So I guess in a roundabout way. This is Alfred Liggins opinion period at period end of story I do not think youre going to see a positive add rebound this year, because I think a lot of these guys have already which once you take expense off the table.
Speaker Change: And our corporate environment. It generally stays off the table for the remainder of that.
Speaker Change: That budget cycle.
Speaker Change: Yes.
Speaker Change: That all makes sense Omar I hope of stabilization than any real.
Positive significant balance this year, yes, yes, okay.
Unknown Attendee: And I did hear you talk about national being a driver of the weakness right now.
Speaker Change: And I did hear you talk about national being a driver of the weakness right now how have your more local smbs you work with been behaving comparatively.
Peter Thompson: How have your more local SMBs you work with been behaving comparatively? And if you have it, I don't know. What's your split between national and local these days? What is it Peter's a 7525 rate? It's more 7525 7520 that's sort of excluding the digital. Yeah, I went through with the radio guys and and I have a weekly call with them now. And look, they were crowing, you know, yeah, locals actually not doing that bad, right? Like, I think they were, you know, telling me that our local, you know, was only down is like less than 2%, like one and a half percent, we were looking at pacings, you know, about, you know, a week ago, two weeks ago, the driver for us is national.
Speaker Change: You have it what's.
Speaker Change: What's your split between national and local these days.
Peter Thompson: But as Peter has a 70 525 range.
Speaker Change: 70, 525, 75, thats sort of excluding the digital.
Speaker Change: I went through with the radio guys and and.
Speaker Change: I have a weekly call.
Speaker Change: Let them know.
Speaker Change: <unk>.
Speaker Change: And look they were growing you know.
Speaker Change: Local is actually not doing that bad right like I think they were.
Speaker Change: Telling me that our local al was only down like less than 2% of like one 5% we were looking at pacings.
Speaker Change: A week ago two weeks ago.
Speaker Change: The driver for Us is national and also.
Peter Thompson: And also, we're having Digital issues, you know, for a couple reasons, and I articulate them, you know, that, you know, changes, you know, in our podcasts and streaming deals, you know, that were out there, and also the fact that we're under penetrated in our local digital efforts. And so the answer to your question is, you know, local, the radio business is down, but it's not down, you know, it's not down double digits, not down as dramatically, it's down, you know, low single digits. So I would say that that's a positive sign. We're going, we're going to lap our digital issues, you know, and, and we're looking to improve our digital efforts.
Speaker Change: We're having.
Speaker Change: Digital issues.
Speaker Change: For a couple of reasons and I had articulated some of that changes.
Speaker Change: Podcasts and streaming deals that were.
Speaker Change: Out there and also the fact that we're underpenetrated and our local digital.
Speaker Change: And so the answer to your question is yes.
Local in the radio business is.
Speaker Change: Down, but it's not down it's not down double digit is not down as dramatically its down now.
Speaker Change: Low single digits. So I would say that that's a positive sign we're going we're going to lap our digital issues.
Speaker Change: And and we're looking to improve our digital.
Peter Thompson: And so one would think that, I mean, you got two things that drive national ads, right? You got, yeah, the market sentiment, okay. And when I say market, you know, consumer sentiment, what advertisers think about consumer activity and their prospects for business, but you also have the continued digital transition away from analog, you know, into digital platforms. Uh, and so, you know, um, National definitely is the negative spot right now, and I hope that abates at some point in time after stability comes into play. And just to clarify, just in terms of national dollars and radio dollars for radio two to one.
Speaker Change: Efforts and so one would think that I mean, you've got two things that drive national ads right you got.
Speaker Change: The market sentiment, okay, and when I say market consumer sentiment, what advertisers think about.
Speaker Change:
Speaker Change: Consumer activity and their prospects for business, but you also have the continued digital transition away from analog Yao into.
Speaker Change: In terms of digital platforms.
Speaker Change: <unk>.
Speaker Change: And so now.
Speaker Change: National desktop is the negative spot.
Speaker Change: Right now.
Speaker Change: And.
Speaker Change: I hope that abates at at some point in time after stability comes into play.
Speaker Change: And just to clarify just in terms of national dollars on radio dollars for for radio. It's two to one so for every dollar of National we do roughly $2 of local.
Peter Thompson: So for every dollar national, we met we do roughly $2 a month. Okay. And the difference in the 75, 25 years old is digital on LDRi. So as a percentage of the total, it's a different number, but relative to each other, it's two for one. Okay, I got it.
Speaker Change: Okay.
Speaker Change: Different from the 70 525 years earlier.
Speaker Change: <unk> sorry.
Speaker Change: So as a percentage of the total is a different number but relative to each other it's two for one.
Speaker Change: Okay got it and Alfred and just one last one on what you were saying there at the end around digital once you. Once you iron out you're kind of issues that you highlighted do you still see growth opportunity across podcast and I know digital means different things to different radio groups, but what podcast loan.
Peter Thompson: And Alfred, just one last one on what you were saying there at the end around digital. Once you once you iron out your kind of issues that you highlighted, do you still see growth opportunity across podcasts? And I know digital means different things to different radio groups, but what podcasts, local digital, whatever it means for you, market services? Look, our growth area for us is we have not played in The local digital air, we've had all of our efforts focused on our national digital, I don't want to say all of our efforts. Yeah, because we've got, you know, we've got, we do have a local digital, you know, business.
Speaker Change: <unk> digital whatever it means for you market services.
Speaker Change: Yeah.
Speaker Change: Our growth area for US is we have not played.
Speaker Change: In the.
Speaker Change: The local digital air we've had all of our efforts focused on our national digital I don't want to say all of our efforts, yes, because we've got we've got we do have a local digital business, but.
Speaker Change: Sure.
Peter Thompson: But you know, we're, you know, you know, we're probably doing high single digits of revenue when our competitors are doing, you know, having it be 20% of their revenue, you know. And so I do think that there are areas of growth. For us in that area, doing a better job there. We don't cross-pollinate our national products into the hands of our local sellers intentionally at this point in time. iHeart does, Odyssey has started to do it as well, and we've got a lot of national products that would give local sellers some great tools to go out and help local advertisers.
Speaker Change: We're probably doing high single digits.
Speaker Change: Of revenue when our competitors are doing.
Speaker Change: Having it be 20% of that right now and so yes, I do think that the areas of growth.
Speaker Change: For us in that area are doing a better job there.
Speaker Change: Are we don't cross pollinate, our national products into the hands of our local sellers.
Speaker Change: Intentionally at this point in time.
Speaker Change: Odyssey has started.
Ted: Ted do it as well and we've got a lot of national products.
Ted: That would give local sellers some great tools to go out and help local advertisers so that's something that.
Peter Thompson: So that's something that we're focused on and will create a growth opportunity as well.
Ted: We're focused on.
Ted: And will create a growth opportunity as well.
Speaker Change: Alright, great I appreciate all the time, thanks again.
Unknown Attendee: Appreciate all the time.
Unknown Attendee: Thanks again. Again, for any questions, press star one.
Speaker Change: Again for any questions Press Star one and our next question comes from the line of Ken Silver with Stifel. Please go ahead.
Ken Silver: And our next question comes from the line of Ken Silver with Stiefel. Please go ahead. Can your line might be on mute? Hey, no, I'm here. Thanks. Sorry about that. Hey, Alfred and Peter, thanks for the time. Sure. I guess a few questions.
Speaker Change: Ken your line might be on mute.
Speaker Change: Okay.
Speaker Change: I'm here, thanks, sorry about that.
Speaker Change: Hi, Alfred and Peter Thanks for the time.
Speaker Change: I guess a few a few questions one is.
Ken Silver: One is, If we look at the cable TV revenue, can you break it out between, you know, carriage fees and advertising? True. So obviously, for the quarter, we do that on page, I think it's page five of the press release. Oh, did I miss that? Yeah, so you can see that if we go to page. 7. I don't know if you have it in front of you, but I do. OK, I will. If you if you I apologize if you broke it out, I will go. No, no, that's OK. But it's there.
Speaker Change: If we look at the cable TV revenue can you break it out between carriage fees and advertising.
Speaker Change: Sure.
Speaker Change: So.
Speaker Change: Obviously for the quarter, we do that on page I think it's page five of the press release, so I missed that okay.
Speaker Change: So you can you can see that.
Speaker Change: Go to pay.
Speaker Change: Yeah.
Speaker Change: Seven.
Speaker Change: If you have in front of you, but you'll do.
Speaker Change: I apologize if you broke it out at all I will go no no.
Speaker Change: Okay.
Speaker Change: But it's the.
Peter Thompson: And if you need to know roughly what we think it's going to be for the year, you can just reach out and I'll talk to you about it. Sure, sure. And on the carriage side, what is your renewal schedule with all the large cable and other FTPs? Charter is up in the fourth quarter, October is it? It's in the charters up at the end of the year. And, and Verizon is up, but they've got an option, you know, and NCTC, which is in September. So we have NCTC, Verizon and Charter, you know, up this year.
Speaker Change: If you need to know roughly what we think is going to be for the year you can just reach out and I'll sure.
Speaker Change: Sure.
Speaker Change: On the carrier side do you have like what is your renewal schedule with all of the large cable.
Speaker Change: These.
Speaker Change: Charter is up in the fourth quarter October is it through the year.
Speaker Change: In the year charters up at the end of the year.
Speaker Change: And and Verizon is up but they've got an option yeah.
Speaker Change: And then in <unk>.
Speaker Change: <unk>, which is in September so we had in CTC Verizon in charter.
Speaker Change: This year.
Peter Thompson: And then what about next year? Is it heavy or light next year? Comcast comes a year later, right? AT&T and Comcast. Okay, got it.
Speaker Change: And then what about in next year is it heavier late next year.
Speaker Change: Comcast comes a year later, right, Directv AT&T and Comcast AT&T and Comcast a year later, Okay got it and then you mentioned.
Peter Thompson: And then you mentioned in your prepared remarks that ratings were down at TV One. Help us understand that. I said they read that they stabilized, right? Okay, sorry. Yeah, they were down a lot last year. What? Unknown Attendee, Ben Briggs, Ken Silver, Dominic Laib, Urban One averaging higher than our fourth quarter low, which, you know, is, which is good. and Clio, especially. And on our second network, Clio. Okay.
Speaker Change: In your prepared remarks that ratings were down at TV. One can you just.
Speaker Change: Help us understand that.
Speaker Change: I said they read.
Speaker Change: They've stabilized right.
Speaker Change: Yes, they were down a lot last year what.
Speaker Change: Twentyish twentyish percent.
Speaker Change: And.
Speaker Change: They bounced up off of their lows of fourth quarter.
Speaker Change: And we budget I think we budgeted.
Speaker Change: What our ratings were in fourth quarter for all of 'twenty, five and fourth quarter was kind of a low and we're actually exceeding that.
Speaker Change: Year to date exceeding that budgeted number so yes.
Speaker Change: Averaging higher than.
Speaker Change: Our fourth quarter, LOE, which is which is good.
Speaker Change: Especially.
Speaker Change: And our second network <unk>, especially.
Peter Thompson: And then, obviously, you're using a lot of cash flow for bond buybacks, which I think, you know, we all think Unknown Attendee, Ben Briggs, Ken Silver, Dominic Laib, Urban One Unknown Attendee, Ben Briggs, Ken Silver, Dominic Laib, Urban One Programming Spin. Oh, yeah, well, yeah, the biggest down the biggest drop quarter of a quarter was Yeah, yeah. So we have an annual award show that we didn't do. And then for the year, you know, 10%, about 10% for the year. And no, I mean, obviously, there's a lot of content now there's no plans to to sort of try to reinvigorate the business and spend a lot of money on.
Speaker Change: And then.
Speaker Change: I mean, obviously, you're using a lot of cash.
Speaker Change: Cash flow for bond buybacks, which I think so.
Speaker Change: We all think is a good use of capital, but how are you.
Speaker Change: Terms of programming spend as it sort of steady as she goes or do you have any thoughts.
Speaker Change: It could grow at a lot now.
Speaker Change: It's actually it's actually down a bit I wouldn't say majorly maybe down 10%.
Speaker Change: Programming spend Oh, yes, yes.
Speaker Change: The biggest down the biggest drop quarter over quarter.
Speaker Change: Yeah, Yeah. So.
Speaker Change: We have an annual.
Speaker Change: Ah.
Speaker Change: Award show that we didn't do.
Speaker Change: And then for the year you're at 10%.
Speaker Change: Top 10% failure.
Speaker Change: No I mean, obviously, there's a lot of content now there are no plans to to sort of to try to reinvigorate the business and spend a lot of money on programming.
Alfred Liggins: And one of the problems that, no, there's not a plant. Look, we've got, we are thinking through now what our options are to grow our TV business because we have to get more delivery, right? But you need, the idea that you go spend more money just to put it on your linear networks when the universe is shrinking on its own means that you're just going to lose, you're going to lose audience regardless of any way you look at it. However, there are multiple new ways of delivering content. We continue to expand our fast channel distribution.
Speaker Change: And one of the problems.
Speaker Change: No theres not a plant.
Speaker Change: Look we've got we are thinking through now what our options are to grow our TV business, because we have to get more delivery right.
Speaker Change: But you need.
Speaker Change: The idea that you'd go spend more money just to put it on your linear networks. When the universe is shrinking on its own means that you're just going to lose youre not youre going to lose on those content investments because youre going to lose audience regardless of.
Speaker Change: Any way you look at however, there are multiple new ways of delivering content, we continue to expand our fast channel distribution, we're looking at.
Alfred Liggins: We're looking at another ad-supported distribution opportunities and potential business models. And so I think that is. Critical, that we invest and move in that area. So you will not see us just investing in content just to put it on this existing platform. You will potentially see us investing in content in combination with an expansion of new distribution opportunities in the fast and AVOD environment, because we need other places to be able to monetize that. And so we're formulating those strategies right now. And you got and you got to, you got to approach that You know, at the same time, you're continuing to manage your balance sheet, you know, etc, right now.
Speaker Change: Another.
Speaker Change: Other ad supported.
Speaker Change: <unk>.
Speaker Change: Our distribution opportunities and.
Speaker Change: Potential.
Speaker Change: Business models and so.
Speaker Change: That is.
Speaker Change: Critical that we.
Speaker Change: That we invest and move in that area. So I don't you will not send us you'll not see you will not see us investing in content with just to put it on this existing platform you will potentially see us investing in content in combination with an expansion of <unk>.
Speaker Change: New distribution opportunities.
Speaker Change: And the SaaS in a bad environment, because we need other places to be able to monetize that content.
Speaker Change: So we're formulating those strategies right now and you've got and you got a.
Speaker Change: You got to approach that.
Speaker Change: At the same time, you are continuing to manage your balance sheet.
Speaker Change: Et cetera, right now.
Peter Thompson: And Ken, just going back to your original question, I was just looking at the relative breakout for the year. A little over 50% of TV1's revenue will be ad dollars and a little under 50% will be affiliate. And that's flipped from a few years ago where we used to be like 55% affiliate, 45% ad. Obviously, attrition has reduced the affiliate line.
Just Ken just going back to your original question I was just looking at the relative breakout for the year a little over 50%.
Speaker Change: TV one's revenue, we add dollars on little under 50% of Dolby affiliate and Thats flipped from a few years ago, where we used to be like 55% of affiliate of 45%.
Speaker Change: Obviously as attrition attrition has reduced the affiliate line.
Unknown Attendee: Okay, great. Okay.
Speaker Change: Okay great.
Unknown Attendee: Thanks so much.
Speaker Change: Great. Okay. Thanks, so much I appreciate it.
Unknown Attendee: And that will conclude our question and answer session.
And that will conclude our question and answer session I'll turn the call back over to Alfred Liggins for any final comments.
Alfred Liggins: I'll turn the call back over to Alfred Liggins for any final comments.
Unknown Attendee: Thank you everybody for your support and continued interest in the story and we'll talk to you next quarter.
Thank you everybody for your support and continued interest in the story and we will talk to you next quarter.
Unknown Attendee: That concludes today's call.
Speaker Change: That concludes today's call. Thank you all for joining you may now disconnect.
Unknown Attendee: You may now disconnect. Please wait, the conference will begin shortly.
Speaker Change: Please wait the conference will begin shortly.
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Speaker Change: [music].