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 its future performance urban one cautions you that certain factors, including risks and uncertainties referred to in the 10-Ks 10, Qs and other reports it periodically files with the Securities and Exchange Commission could cause the company's actual results to differ materially from those indicated by its projections or forward looking statements.
This call will present information as of May 13th 2020, but please note that urban one disclaims any duty to update any forward looking statements made in the presentation in.
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 dotcom.
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 replay.
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.
Speaker Change: Thank you very much operator, and welcome everybody to our first quarter 2025 results conference call.
As usual joined with Peter and I are Jody <unk> Who's our TV, one chief financial officer for any TV question.
Speaker Change: Karen Wishart, our chief administrative officer, and also Christopher Simpson, who is our general counsel.
Speaker Change: You you've seen the earnings release Q1 results.
Speaker Change: Largely in line with the guidance that we gave Q2 radio pacings.
Speaker Change: Weekend since our last conference call.
Speaker Change: Roughly down about 9% now however, as I had said on the conference call.
Speaker Change: Last quarter, our TV ratings seem to that stabilize.
Speaker Change: In Q1, and Q2 and are in line 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, yes.
Speaker Change: Something again to note on our 2020 for EBITDA, which was about one out of three almost $10 million of that.
Speaker Change: Was a noncash adjustment for the.
Speaker Change: TV One award associated with my contract.
Speaker Change: 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 going backwards, but.
Speaker Change: What we.
Speaker Change: Have expected so with that we have said that we're going to continue to focus on.
Our cost control and 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 now.
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: The 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 53.9. And we've reduced our gross debt down to $495.9 million. And we're still sitting on about $80 million of cash on hand at present with an undrawn revolver.
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 continue to be focused on deleveraging and maintaining 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, you know, in terms of leverage and expense control, and that's what we're really focused on.
Speaker Change: So we.
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've got to make sure that.
Speaker Change: You are prudent and you.
Speaker Change: Can you make.
Speaker Change: Uh huh.
Speaker Change: To do that.
Speaker Change: Keep you in the best possible.
Speaker Change: Position of flexibility in terms of.
Speaker Change: <unk> leverage and.
Speaker Change: 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 in operation.
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 and do 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%.
Speaker Change: According to Miller Kaplan, our local AD sales were down 12, 8% against markets that were down 13, 2%.
Speaker Change: 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.
Speaker Change: Our largest radio AD category was services, which was which was up 11% driven by legal services.
Speaker Change: Travel and transportation was up 17% for us.
Speaker Change: Wallace category.
Speaker Change: Telecom financial categories were up low single digits.
Speaker Change: 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.
Speaker Change: 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.
Speaker Change: <unk> EBITDA reached was a loss of $600000 for the quarter.
Speaker Change: Combination of client attrition and lower average unit rates drove that decline.
Peter Thompson: Net revenues for the digital segment were down 16.2% in Q1 at $10.2 million.
Speaker Change: Net revenues for the digital segment were down 16, 2% in Q1 of $10 $2 million.
Peter Thompson: 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 revenues down 6.3%, TV One delivery declined 18% in total day persons $25.54, which is partially offset by an increase in Clio TV, which was up 29% in total day persons $25.54 delivery, and also favorable AVOD and FAST revenue of $1.1 million, which resulted in a net ad revenue decline of $1.7 million.
Speaker Change: Audio streaming revenue was down by $2 $1 million in the quarter due to the renegotiation of an exclusive coffee deal.
Speaker Change: And that impacted adjusted EBITDA.
Speaker Change: Which was $58000 compared to $2 3 million in the prior year.
Speaker Change: We recognized approximately $44 $2 million of revenue.
Speaker Change: Television segment during the quarter, a decrease of seven 9%.
Speaker Change: Cable TV advertising revenue was down six 3% TV wanted to clip delivery declined 18% in total day post was $25 54, which was partially offset by an increase in Cleo TV, which was up 29% and total day persons 25, 54 deliveries and also favorable Avon.
Speaker Change: Fast revenue.
Speaker Change: Of $1 $1 million.
Speaker Change: This resulted in a net AD revenue decline of one 7 million.
Peter Thompson: Cable TV affiliate revenue is down by 10% driven by subscriber churn, which is about $3.3 million, partially offset by $1.3 million, which is a combination of subscriber rate increases 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 sub.
Speaker Change: Cable TV affiliate revenue was down by 10% driven by subscriber churn, which is about $3 $3 million.
Speaker Change: Possibly offset by a $1 million three which is a combination.
Speaker Change: A subscriber rate increases on the launch of now TV.
Speaker Change: Cable subscribers with TV one.
Speaker Change: Measured by Nielsen finished Q1 at.
Speaker Change: $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 and tangible assets and long-lived assets, decreased to approximately $80.7 million for the quarter, a decrease of 8.6% from the prior year. The overall decrease in operating expenses 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.
Speaker Change: 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.
Speaker Change: A decrease of eight 6% from the prior year.
Speaker Change: Overall decrease in operating expense 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.
Speaker Change: Radio operating expenses were down two 9% or approximately <unk> $9 million driven by lower employee compensation costs.
Speaker Change: Operating expenses were down one, 7% again, driven by lower employee compensation costs.
Speaker Change: 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: Operating expenses in the cable TV segment were down 10.8% year over year, driven by lower programming content expense, on-air promotions, and employee compensation costs. Operating expenses in the corporate and elimination segment were down by approximately $3.8 million, driven by lower third-party professional fees.
Speaker Change: 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.
Speaker Change: Operating 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%.
Speaker Change: Consolidated adjusted EBITDA was approximately $12 $9 million down 42, 2% consolidated broadcast and digital oil pricing 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.
Speaker Change: 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 two.
Speaker Change: 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.
Speaker Change: 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. In April, the company purchased an additional $60.4 million in notes at an asset price of 51.9%, and as Alfred said, that brings the current balance on the debt to $495,930,000.
Speaker Change: During the quarter the company repurchased $28 $2 million of its 2028 notes at an average price of 58% of par.
Speaker Change: Bringing the balance at quarter end to $556.348 million.
Speaker Change: In April the company was purchased an additional $64 million of notes.
Speaker Change: All 51, 9%.
Speaker Change: As Alfred said that brings the tonnes.
Speaker Change: The 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 the FCC licenses in five radio markets.
Speaker Change: We recorded.
Speaker Change: $6 $4 million in noncash impairments in Q1 against the carrying value of.
Speaker Change: FCC licenses in five of our radio markets, which are Dallas, Indianapolis, Raleigh, Philadelphia Cleveland.
Peter Thompson: 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. The company paid cash income taxes in the amount of $33,000. Capital expenditures were approximately $2.5 million.
Speaker Change: The provision for income taxes was approximately $15 7 million for the first quarter, because we booked an additional $14 $6 million valuation allowance against.
Speaker Change: All balances.
Speaker Change: Company paid cash income taxes in the amount of $33000.
Speaker Change: Capital 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.
Speaker Change: Net loss was approximately $11 $7 million or 26 per share compared to net income of $7 5 million or <unk> 15 per share for the first quarter of 2024.
Peter Thompson: During the three months end of March 31st 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.
Speaker Change: During the three months ended March 31, 2025, the company repurchased 400, <unk> thousand 200 <unk>.
Speaker Change: Shares of class a common stock in the amount of approximately $700000.
Speaker Change: Average cost of $1 48 per share.
Peter Thompson: And we also repurchased 303,622 shares of Class D stock, amount of approximately $300,000, an average price of 87 cents per share.
Speaker Change: And we also repurchased 303622 shares of class B common stock.
Speaker Change: Out of approximately $300000.
Speaker Change: <unk> cost of 87 cents per share.
Peter Thompson: As of March 31st, total gross debt was approximately $556.3 million, ending unrestricted cash was $115.1 million, resulting in net debt of approximately $441.3 million. compared to $94.1 million of LTM reported adjusted EBITDA for a total net leverage ratio of 4.69 times.
Speaker Change: As of March 31, total gross debt was approximately $566 3 million ending unrestricted cash was $115 $1 million, resulting in net debt of approximately $441 $3 million.
Speaker Change: 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 apportionment 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.
Speaker Change: Finally, we recast the.
Speaker Change: Comparable periods for 2024.
Speaker Change: To reflect the move of $7 9 million.
Speaker Change: CTV revenue from digital TV.
Speaker Change: And also the real caution a cross platform sales and marketing expenses, we talked about that on the last earnings call. A number of questions came up so we thought we'd just give you the comps.
Speaker Change: From prior quarters with those.
Speaker Change: With those recast numbers and with that I'll hand back to Alf. 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 and the number one on your telephone keypad.
Speaker Change: 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 Ben Briggs with 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. Hey, good morning, guys. Thank you for taking the call. Absolutely. Yeah, so a couple here.
Speaker Change: Yes.
Ben Briggs: Hey, good morning, guys. Thank you for taking the call.
Speaker Change: Absolutely.
Speaker Change: Yeah. So a couple here so first of all I do notice you guys did some cost cutting during the quarter.
Ben Briggs: So first of all, I do notice that 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: The.
Speaker Change: Both the program the impact will expense line.
Speaker Change: G&A and 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 Unknown Attendee, Marlene Pereira, Jody Drewer, Hal Steiner, Dominic Laib, Urban One Inc. Yeah, 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 our guidance, you know, and then looking to see if we're doing better. Got it. That's helpful.
Speaker Change: You can pull to kind of control costs as the year goes on in the future.
Speaker Change: Yes, I mean, I said last.
Speaker Change: Conference call that.
Speaker Change: 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: Taken another look we can get that for this year, we haven't.
Scott: Scott there that probably will focus on that so that.
Scott: It's done by the middle of the year so.
Scott: Really focused on kind of like an end of June.
Scott: Execution date on that and.
Scott: And so look I don't want to go into specifics quite frankly, I don't have all of the opportunities.
Scott: Off the top of my head and even if I did I certainly wouldn't want to announce them on a conference call.
Scott: Yes, yes.
Scott: Yes.
Scott: Yes.
Scott: Let's say, we do believe that there are.
Scott: Are the opportunities.
Dom: And Dom.
Dom: And plan to take advantage of them, but we're really managing to two.
Dom: To our guidance.
Dom: And then what can this if we as we've been doing better our guidance of <unk> 75, not include any back half cost cut that.
Dom: Hi.
Dom: Got it.
Dom: Got it that's helpful. Thank you so.
Ben Briggs: 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. Okay, I'm fine. We're getting past that.
Dom: That's a great segue into my next question, which is.
Dom: I feel like you had indicated that we should expect the majority of the EBITDA to come in the second half of 2025.
Dom: Yes, Anthony Robbins lifestyle repeat that.
Alfred Liggins: 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.
Dom: Sorry.
As I said I feel like you had indicated that you're expecting the majority of EBIT. This year to come in the second half of the year is that do I remember correctly is that accurate.
Dom: Yes, so more than more than half for sure.
Dom: Right right can you give any guidance for what you think the second quarter has been store as far as.
Ben Briggs: Can you give any guidance for what you think the second quarter has in store as far as as far as the expectations.
Dom: As far as.
Dom: EBIT expectations.
Dom: Yes.
Alfred Liggins: 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 that profit is forecast to be in the back half of the year, so not going to be strongly profitable in the second quarter. And then TV. TV One rating is down a little bit, down a bit, being compensated for by Clio. 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 where radio is at, you know, that might need to wash against, that might need to wash against radio.
Dom: Until then we are going to give specific guidance I think from the <unk> office said that radio is weak and dry or relative to where a lot of time. So we should expect that to be.
Dom: To be down.
Dom: Sure.
Dom: Digital.
Dom: Did you all almost all of that profit is forecast to be in the back half of the year, So now going to be.
Dom: Strongly profitable in the second quarter, and then T V.
Dom: TV, one ratings down oil down a bit.
Dom: Compensated for by Cleo.
Dom: 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.
Dom: Looking at why radio is that that might need to wash against.
Dom: I don't need to wash against radio so.
Ben Briggs: 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.
Dom: I think Q2 will be.
Dom: A little bit better than Q1, but similarly weak and then we've got to deliver on the back half of the year.
Dom: Got it got it and then and then finally, obviously there have been.
Ben Briggs: And then finally, obviously, there have been additional debt repurchases. I know that the market likes to see those.
Dom: And then additional debt repurchases.
Dom: 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.
Alfred Liggins: Should we expect further debt repurchases as the year goes on? Or does it mean more?
Dom: Hey.
Alfred Liggins: 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, 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? You know, and so we're in, we're out, we got a price that we want to try to get it at.
As I've been told many times before the best predictor of the future and there are actions of the past.
Dom: Yes.
Dom: You've heard that too.
Dom: Yeah.
Dom: Yes, I mean look I mean, we.
We try not dry we deliberately.
Dom: Our opportunistic right like we don't like it when we.
Dom: 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.
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.
Alfred Liggins: 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 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 know, we're the most motivated buyer, right? You know what I mean? 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?
Funds that want to sell.
Yes.
Dom: Ultimately helps the company and so yes, we will.
Dom: We'll continue to do that almost always though anytime we go into the market. The price goes up right just because now you got.
Speaker Change: You were the most motivated buyer right.
Speaker Change: And I think at the end of the last conference call.
Speaker Change: The debt had been trading at like 49, and a half now.
Speaker Change: And then when we got into the market.
Speaker Change: <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.
Alfred Liggins: Yeah. So, yeah. Yeah, you know, we're okay with that. Like, you know, I mean, that's, you know, you know, we had some big people who, you know, wanted to exit and wanted to see, you know, some sort of uplift. And it's good for everybody. But as you can see, the, you know, vast, vast, vast majority of our capital 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, uh, you know, with that.
Speaker Change: Yeah.
Speaker Change: Yes.
Speaker Change: We're okay with that.
Speaker Change: We had some big trades are people who.
Speaker Change: Wanted to exit and wanted to see.
Speaker Change: Some.
Speaker Change: Some sort of uplift.
Speaker Change: And it's good for everybody, but as you can see that.
Speaker Change: <unk>.
Speaker Change: That vast vast majority of our capital is going to that yeah. So I mean, yes.
Speaker Change: Yeah.
Speaker Change: We took out tens of millions of dollars of debt since the last call.
Speaker Change: And looking forward I think.
Speaker Change: We're continuing to still be in a position now to.
Speaker Change: To to be impactful now.
Speaker Change: With that.
Alfred Liggins: Okay, if you were if you were to draw the revolver, that wouldn't I don't think that would restrict you at all in debt buybacks, would it now? 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.
Speaker Change: Okay.
Speaker Change: If you were to draw the revolver.
Speaker Change: I don't think that would restrict you at all and debt buybacks with it.
Speaker Change: Okay.
Speaker Change: Oh yeah.
Speaker Change: Yes.
Speaker Change: Yes look it's not.
Speaker Change: Most of most of the people on this call are.
Speaker Change: Our investors smart investors and so now it shouldn't be lost on anybody that we do have an undrawn revolver right now so that.
Speaker Change: That capital is available for.
Speaker Change: All things, including if we've used all of our cash to buy back debt and we needed operating funds right.
Speaker Change: To do that so our liquidity position is.
Alfred Liggins: So our liquidity position is, you know, remains, you know, It was very, very soft and gives us some options.
Speaker Change: <unk> remains.
Speaker Change: Barry.
Speaker Change: Softwood and gives us some options.
Speaker Change: Yes.
Ben Briggs: Okay. All right.
Speaker Change: Okay.
Ben Briggs: I think that's going to be all from me right now. I'll give some other people the chance to ask questions. Thanks again.
Speaker Change: I think that's going to be all from me right now I'll give some other people the chance to ask questions. Thanks again. Thank you very much next question operator.
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. 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 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.
Speaker Change: Dan.
Dan: Hey, guys.
Speaker Change: Thank you for having me on a couple of questions around the AD environment.
Speaker Change: Radio side.
I think you've noted additional weakness crept in between your last call in today.
Speaker Change: 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.
I mean, I think they need to know what their expense profile is going to look like going forward right now and.
Alfred Liggins: Yeah. And and with that, you know, the the the tariff picture moving, you know, weekly, right, you know, changing weekly. Difficult to forecast that. 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, into which verticals, you know, is not readily available.
Speaker Change: And with that.
Speaker Change: The tariff picture moving.
Speaker Change: Weekly rate changing weekly.
Speaker Change: Difficult to.
Speaker Change: Difficult to forecast that so.
Speaker Change: Unfortunately.
Speaker Change: Procter <unk> Gamble and general Motors don't share their ad strategies.
Speaker Change: With us now.
Speaker Change: 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 do.
Speaker Change: Disclose 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: It is not readily available and I get it it's really kind of a trade secret for them right now.
Alfred Liggins: And I get it, you know, it's really kind of a trade secret for them, right? You know, and so I, 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 tariff land, tariffs land, they're going to land at, you know, some higher level than they were before, right?
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 and it's no secret that you've seen.
Speaker Change: Reports that the consumer is cooling down cooling off or whatever spend is slowing down uncertainty.
Speaker Change: I mean at the end of the day, regardless of where the tariff plan tariffs land theyre going to land at.
Speaker Change: Some higher level than they were before right now.
Alfred Liggins: You know, and that's, you know, 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 going to take all of the additional tariff expense and roll it into pass-ons, you know, to pricing. 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.
Speaker Change: And that's you know I saw something this morning on CNBC, where they were talking about the forecast as some of these companies out there which assume.
Speaker Change: They're going to take all of the additional tariff expense and roll it into pass on to.
Speaker Change: Price increases.
Speaker Change: Which you know.
Ultimately as inflationary, which one would think.
Speaker Change: There is a knock on effect on the recession, but I'm not an economist I don't know this economy has been.
Speaker Change: Chopping down.
Speaker Change: Trees and plowing through all kinds of now.
Alfred Liggins: 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: The headwinds so far be it for me to predict now.
Speaker Change: What's truly going to cause a recession.
Speaker Change: And then what its ultimate impact on the AD market now as it is.
Speaker Change: Not positive at this point in time.
Speaker Change: <unk>.
Aaron Watts: Yeah, so so so I guess in a roundabout way, this is just Alfred Liggins opinion period in 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 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.
Speaker Change: Because I think a lot of these guys have already which once you take expense off the table in a corporate environment. It generally stays off the table for the remainder of that.
Speaker Change: Of that budget cycle.
Speaker Change: Yes that all makes sense have more I hope of stabilization than any real.
Speaker Change: Positive significant bounce this year, yes, yes, okay.
Aaron Watts: And I did hear you talk about national being a driver of the weakness right now.
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.
Speaker Change: You have it what's your split between national and local these days.
Speaker Change: But as Peter has a 70 525 rate.
Speaker Change: It's more $75 25 to $75 20, thats sort of excluding the digital.
Peter Thompson: Yeah, I went through with the radio guys and and I have a you know, 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: I wanted to do 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.
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% is 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 we're having.
Peter Thompson: And also, we're having Unknown Attendee, Marlene Pereira, Jody Drewer, Hal Steiner, Dominic Laib, Urban One Inc. Unknown Attendee, Marlene Pereira, Jody Drewer, Hal Steiner, Dominic Laib, Urban One Inc. 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 just in terms of national dollars and radio dollars for radio two to one. So for every dollar a national we met, we do roughly $2 of local Okay. And the difference in the 75, 25 years old is digital on LDRi.
Speaker Change: Digital issues.
Speaker Change: For a couple of reasons and I had articulated some of that now changes and our.
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.
Speaker Change: Our local in the radio business is down, but it's down now it's not down double digit is not down as dramatically its down.
Speaker Change: <unk>.
Speaker Change: Low single digits, So I would say that that's a positive sign.
Speaker Change: We're going to lap our digital issues.
Speaker Change: And and we're looking to improve our digital.
Speaker Change: Our efforts and so one would think that I mean, you got two things that drive National ads right you got the.
Speaker Change: The market sentiment, okay, and when I say market consumer sent them at what advertisers think about.
Speaker Change: Consumer activity and their prospects for business, but you also have the continued digital transition away from analog.
Speaker Change: And with digital platforms.
Speaker Change: <unk>.
Speaker Change: And so you know.
Speaker Change: National definitely is the negative spot.
Speaker Change: But right.
Speaker Change: Right now.
Speaker Change: And.
Speaker Change: And I hope that abates.
Speaker Change: 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.
Speaker Change: Okay.
Speaker Change: Difference in the 70 525 year old is digital on other right.
Aaron Watts: 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: 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 local.
Aaron Watts: 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?
Speaker Change: Digital whatever it means for you market services.
Alfred Liggins: Yeah, 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, 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 yeah, I do think that there are areas of growth. For us in that area, doing a better job there.
Speaker Change: Our growth area for US is we have not played.
Speaker Change: And.
Speaker Change: The local digital air we've had all of our efforts focused on our national digital and I want to say all of our efforts because we've got we've got we do have a local digital business, but we're now 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: Our.
Alfred Liggins: 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 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.
Speaker Change: That.
Speaker Change: Would give local sellers some great tools to go out and help local advertisers so that's something that.
Alfred Liggins: That's something that we're focused on and will create a growth opportunity as well.
Speaker Change: We're focused on.
Speaker Change: And will create a growth opportunity as well.
Speaker Change: Alright, great I appreciate all the time, thanks again.
Aaron Watts: 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. 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? 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, 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.
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: Yes.
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 all I will go.
Speaker Change: That's okay.
Speaker Change: But it's there.
Speaker Change: If you need to know roughly what we think is going to be for the year you can just reach out.
Ken Silver: Sure, sure.
Speaker Change: Sure.
Peter Thompson: On the carriage side, do you have, like, what is your renewal schedule with all the large cable and other MVP stuff? 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: On the carrier side do you have like what is your renewal schedule with all 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 CTC, which is in September so we had and CTC Verizon in charter.
Speaker Change: This year and then what about next year is it heavier late next 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: 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, can you just... 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, Alfred Liggins, Peter Thompson, Dominic Laib, Urban One Inc., Marlene Pereira, 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: Okay.
Speaker Change: I said they read.
Speaker Change: Stabilized right, Okay alright.
Speaker Change: They were down a lot last year what.
Speaker Change: Twentyish twentyish percent and.
Speaker Change: Bounce step off their lows of.
Speaker Change: Fourth quarter.
And we budget I think we budgeted.
Speaker Change: What our ratings were in fourth quarter for all of 2005 and fourth quarter was kind of a low and we're actually exceeding that year to date exceeding that budgeted number so.
Speaker Change: <unk>.
Speaker Change: Averaging higher than.
Speaker Change: Our fourth quarter, LOE, which is which is good.
Speaker Change: <unk>, especially and on our second network Cleo, especially.
Ken Silver: And then, obviously, you're using a lot of cash flow for bond buybacks, which I think, you know, we all think. Unknown Attendee, Marlene Pereira, Jody Drewer, Hal Steiner, Dominic Laib, Urban programming spend? Oh, yeah, we'll do it. 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 sort of try to reinvigorate the business and spend a lot of money on.
Speaker Change: Okay and then.
Speaker Change: I mean, obviously, you're using a lot of.
Speaker Change: Cash flow for bond buybacks, which I think.
Speaker Change: We all think is a good use of capital but are you in terms of programming spend as it sort of steady as she goes or do you have.
Speaker Change: Grow it a lot now.
Speaker Change: It's actually down a bit I wouldn't say majorly and saying maybe down 10%.
Speaker Change: Programming spend Oh, yes, yes.
Speaker Change: The biggest down the biggest drop quarter over quarter.
Speaker Change: Yes, yes.
Speaker Change: We have an annual.
Speaker Change: Award show that we didn't do.
Speaker Change: And then for the year, 10%.
Speaker Change: 10% failure.
Speaker Change: No I mean, obviously, there's a lot of content now there are no plans to to try to reinvigorate the business and spent a lot of money on programming.
Alfred Liggins: And one of the problems, no, there's not a plant.
Speaker Change: And one of the problems.
Speaker Change: No theres not a plant.
Alfred Liggins: 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, you know, but you need, you know, 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 know, you're going to lose on those content investments because you're going to lose audience regardless of, you know, any way you look at it. However, there are multiple new ways of delivering content, you know, we continue to expand our fast channel, you know, distribution, we're looking at, you know, another, you know, ad supported distribution, you know, opportunities, and potential business models.
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 youre just going to lose your.
Speaker Change: Youre going to lose on those content investments, because youre going to lose audience regardless of.
Speaker Change: Any way you look at it. However, there are multiple new ways of delivering content, we continue to expand our fast channel distribution, we're looking at.
Speaker Change: Another.
Speaker Change: Other ad supported.
Speaker Change: <unk>.
Speaker Change: Distribution opportunities.
Speaker Change: And potential.
Speaker Change: <unk> business models and so.
Alfred Liggins: And so I think that is Critical, you know that we That we invest and move in that area So I don't you will not send us you not see it You will not see us just investing in content with just to put it on this existing platform You will you know potentially see us investing in content in combination with an expansion of new distribution opportunities Yeah in in in the fast and a bod 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: 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 just investing in content with just to put it on this existing platform you will potentially see us investing in content in combination with <unk>.
Speaker Change: With an expansion of new distribution opportunities.
Speaker Change: And the fast in a bad environment, because we need other places to be able to monetize that content and 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. Okay, great. Okay.
Speaker Change: And then just just Ken just going back to your original question I was just looking at the relative breakout for a year a little over 50%.
Speaker Change: TV one's revenue, we add dollars on little under 50% will be affiliate and Thats flipped from a few years ago, where we used to be like 55% affiliate of 45%.
Speaker Change: Obviously attrition attrition has reduced the affiliate line.
Speaker Change: Okay.
Speaker Change: Great. Okay. Thanks, so much.
Unknown Attendee: Appreciate it. And that will conclude our question and answer session.
Speaker Change: Appreciate it.
Speaker Change: 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.
Alfred Liggins: Thank you everybody for your support and continued interest in the story and we'll talk to you next quarter.
Alfred Liggins: Thank you everybody for your support and continued interest in the story and we'll 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.
Unknown Attendee: Please wait, the conference will begin shortly.
Alfred Liggins: Please wait the conference will begin shortly.
Alfred Liggins: Yes.
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Alfred Liggins: Great.
Alfred Liggins: Okay.
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Alfred Liggins: Sure.
Alfred Liggins: Okay.
Alfred Liggins: [music].
Alfred Liggins: Yeah.
Alfred Liggins: Right.
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Alfred Liggins: Yes.
Alfred Liggins: [music].