Q2 2025 Urban One Inc Earnings Call

Speaker #2: Ladies and gentlemen, thank you for standing by and welcome to the Urban One Q2 2025 second quarter earnings call. As a reminder, this conference is being recorded.

Operator: Ladies and gentlemen, thank you for standing by and welcome to the Urban One 2025 second 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 August 13, 2025. Please note that Urban One disclaims any duty to update any forward-looking statements made in the presentation.

Speaker #2: 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.

Speaker #2: Urban One cautions you that certain factors, including risks and uncertainties referred to in the 10Ks, 10Qs, 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.

Speaker #2: This call will present information as of August 13, 2025. Please note that Urban One disclaims any duty to update any forward-looking statements made in the presentation.

Speaker #2: 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.urbanone.com.

Operator: 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.urbanone.com. A replay of the conference call will be available from 2:00 P.M. Eastern Time, August 13, 2025, until 11:59 P.M. Eastern Time, August 20, 2025. Callers may access the replay by calling 1-800-770-2030. International callers may dial direct 1-600-800-9909. The replay access code is 366-0282. Access to live audio and a replay of the conference will also be available on Urban One's corporate website at www.urbanone.com. The replay will be made available on the website for seven days after the call. No other recordings or copies of this call are authorized or may be relied upon.

Speaker #2: A replay of the conference call will be available from 2 o'clock PM Eastern Time, August 13th, 2025, until 11:59 PM Eastern Time, August 20th, 2025.

Speaker #2: Callers may access the replay by calling 1-800-777-2030 (International callers may dial direct 1609-800-9909). The replay access code is 366-0282. Access to live audio and a replay of the conference will also be available on Urban One's corporate website, at www.urbanone.com.

Speaker #2: The replay will be made available on the website for seven days after the call. No other recordings or copies of this call are authorized or may be relied upon.

Speaker #2: I will now turn the call over to Alfred Liggins, Chief Executive Officer of Urban One, who is joined by Peter Thompson, Chief Financial Officer.

Operator: 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 #2: Mr. Liggins, please go ahead.

Speaker #3: Thank you, operator. Also joining us, is, our general counsel, Chris Simpson, our Chief Administrative Officer, Karen Wishard, and, our TV, wine, CFO, Jody Drewer.

Alfred Liggins: Thank you, operator. Also joining us is our General Counsel Chris Simpson, our Chief Administrative Officer Karen Wishard, and our TV One CFO Jody Driller. The earnings release press release is out, consistent with what is going on in the industry. It was a tough quarter, albeit, when Peter gets into the numbers, there are some adjustments that need to be taken into account that do not make the picture as dire. One of those is a difference in the timing of our Tom Joyner Fantastic Voyage cruise, which was in Q2 last year, but has been moved to Q4, and that is a big revenue number. Also, there is a non-cash adjustment to the TV One award, which has a significant impact on the downdraft on the EBITDA line as well.

Speaker #3: earnings, release press release, is, is out, consistent with, what's going on, in the industry. it was, it was a, it was a tough quarter.

Speaker #3: albeit, you know, when, Peter gets into the numbers, there are some, adjustments that, need to be taken into account that, that don't make the picture, you know, as dire, you know, one of those is, a difference in the timing of our Tom Joyner Cruz, which was in Q2 last year, but has been moved to Q4, and that's a big revenue number.

Speaker #3: And also, there's a non-cash adjustment to the TV1 award, which has significant impact. on the downdraft, on, on the EBITDA line as well. I think the big news, you know, is that we have, revised our guidance, for the year, given the headwinds that we're experiencing.

Alfred Liggins: I think the big news is that we have revised our guidance for the year, given the headwinds that we are experiencing, down from the original $75 million, which we had at the beginning of the year, to a $60 million full-year number. We have not instituted a second round of cost cuts and right-sizing as of yet. That is something that is going to be gone over the next 30 days and looked to institute by the end of Q3, so it takes a cut back to Q4. We have seen a bit of a moderation, as I think we said last quarter, in our TV business. Actually, that is a business that is doing better than we originally had budgeted, but the radio and the digital business and Reach Media in particular, are undergoing significant headwinds.

Speaker #3: down from the original 75 million, which we had, at the, at the beginning of the year, to, a 60 million dollar, full year number.

Speaker #3: we have not instituted, a second round of, of, of, of, of cost cuts, you know, and, and, and, and, and right-sizing, as of yet, you know, that's something that, we've focused on over the next, 30 days and, you know, looked to institute by, the end of Q3, so it takes a tech, that's in Q4.

Speaker #3: we, you know, have seen, you know, a bit of, moderation, as I think we said last quarter in our, in our TV business. Actually, that's a business that, is doing better, than we originally, had, had budgeted.

Speaker #3: But the radio and the digital business, and Reach Media in particular, are undergoing significant headwinds. So, with that, I'm going to let Peter take you through the details, and then we'll open it up for Q&A and talk about the business in more detail.

Alfred Liggins: With that, I am going to let Peter take you through the details, and then we will open it up for Q&A and talk about the business in more detail.

Speaker #4: Thanks, Alfred. I'll just quickly run us through the numbers. So, consolidated net revenue is approximately 91.6 million dollars, down 22.2 percent year over year.

Peter Thompson: Thanks, Alfred. I will just quickly run us through the numbers. Consolidated net revenue is approximately $91.6 million, down 22.2% year over year for the three-month end of June 30, 2025. Net revenue for the radio broadcast segment was $36.7 million, a decrease of 12.6% year over year. Excluding political, net revenue was down 10.3% year over year. According to Miller Kaplan, our local advertising sales were down 5.6% against a market that was down 11%. Our national ad sales were down 23.6% against a market that was down 13.1%. Our largest ad category was services, which was up 23.4%, driven by legal firms and legal services. Financial was also up 11.3%, but all of the other major categories were down. Net revenue for the Reach Media segment was $5.3 million in the second quarter, down 71.9% from the prior year.

Speaker #4: three-month end of June 30th, 2025. Net revenue for the radio broadcast segment was 36.7 million dollars, a decrease of 12.6 percent year over year.

Speaker #4: Excluding political, net revenue was down 10.3 percent year over year. according to Miller Kaplan, our local advertising sales were down 5.6 percent. Against the market, that was down 11 percent.

Speaker #4: Our national ad sales were down 23.6 percent. Against the market, that was down 13.1 percent. Our largest ad category was services, which was up 23.4 percent.

Speaker #4: That was driven by, legal firms and legal services. Financial was also up 11.3 percent, and all of the other major categories were down. Net revenue for reach media segment was 5.3 million dollars in the second quarter, down 71.9 percent from the prior year, and adjusted EBITDA for reach was a loss of 1.7 million dollars for the quarter.

Peter Thompson: Adjusted EBITDA for Reach Media was a loss of $1.7 million for the quarter. The Tom Joyner Fantastic Voyage cruise event, as Alfred said, was in the second quarter of 2024 and generated $9.6 million in revenue in Q2 last year. This year it is going to be held in Q4, so you have a revenue and a profit timing difference there for the quarter. Aside from the absence of the cruise revenue, client attrition and lower average unit rates drove the network advertising revenue decline. Net revenues for the digital segment were down 27.1% in Q2 at $10.3 million. The decline was driven by the loss of an exclusive third-party audio streaming deal. So that impacted us by $1.6 million of revenue. Direct and indirect digital sales were down by $1.2 million. Adjusted EBITDA was a loss of $0.1 million compared to a profit of $2.7 million last year.

Speaker #4: The Tom Joyner Cruz event, as Alfred said, was in the second quarter of 2024, and generated 9.6 million dollars in revenue in Q2 last year.

Speaker #4: This year is gonna be held in Q4, so you have a revenue and a profit timing difference there for the quarter. aside from the absence of the Cruz revenue, client attrition, the lower average unit rates, drove the network advertising revenue decline.

Speaker #4: Net revenues for the digital segment were down 27.1 percent, Q2 at 10.3 million dollars. The decline was driven by the loss of an exclusive third-party audio streaming deal.

Speaker #4: So that impacted us by 1.6 million dollars of revenue, direct and indirect digital sales were down by 1.2 million dollars. Adjusted EBITDA was a loss of 0.1 million dollars compared to a profit of 2.7 million dollars last year.

Speaker #4: We recognized approximately 40.1 million dollars of revenue from our cable television segment during the quarter, a decrease of 7.5 percent. Cable TV advertising revenue was down 4.2 percent, total day delivery declined 12.5 percent per person's 25.54, and that was offset by an increase in CTV and third-party platform revenue share.

Peter Thompson: We recognized approximately $40.1 million of revenue from our cable television segment during the quarter, a decrease of 7.5%. Cable TV advertising revenue was down 4.2%. Total day delivery declined 12.5% for persons 25-54, and that was offset by an increase in CTV and third-party platform revenue share. Cable TV affiliate revenue was down 11.7%, driven by subscriber churn, which was partially offset by an increase in subscriber rate on the launch of Now TV. Cable subscribers for TV One, as measured by Nielsen, finished the second quarter at 34.3 million compared to 35.6 million at the end of Q1. CLEO TV had 33.7 million Nielsen subscribers. Operating expenses, excluding depreciation and amortization, stock-based compensation, and impairments of goodwill and intangible assets, decreased to approximately $78.1 million for the quarter, a decrease of 16.3% from the prior year.

Speaker #4: Cable TV affiliate revenue was down 11.7 percent, driven by subscriber churn, which was partially offset by an increase in subscriber rate and the launch of now-TV.

Speaker #4: Cable subscribers for TV1 is measured by Nielsen finished second quarter at 34.3 million, compared to 35.6 million at the end of Q1. Clio TV had 33.7 million, Nielsen subscribers.

Speaker #4: Operating expenses, excluding depreciation and amortization, stock-based compensation, and impairments of goodwill and intangible assets, decreased to approximately 78.1 million dollars for the quarter. A decrease of 16.3 percent from the prior year.

Speaker #4: The overall decrease in operating expenses was primarily due to the absence of the Reach Cruz event, which had $8.4 million in expenses in the second quarter last year.

Peter Thompson: The overall decrease in operating expenses was primarily due to the absence of the Reach Media cruise event, which had $8.4 million of expenses in the second quarter of last year. Other notable expense decreases include corporate professional fees, overall payroll expenses, and CLEO TV advertising expense. A non-cash credit of $6.2 million was included in the prior year expenses for the reduction in the value of the CEO's TV One award. That compares to a charge of $0.7 million, which was included in this year's second quarter total. That caused an unfavorable variance of $6.9 million year over year, which was non-cash. Normalizing for this, adjusted EBITDA was down $8 million year over year. Further adjusting for the timing of the Tom Joyner Fantastic Voyage, EBITDA was down approximately $7 million year over year.

Speaker #4: Other notable expense decreases include corporate professional fees, overall payroll expenses, and cable TV advertising expense. A non-cash credit of $6.2 million was included in the prior year expenses for the reduction in the value of the CEO's TV1 award.

Speaker #4: And that compares to a charge of $0.7 million, which was included in this year's second quarter total. So that caused an unfavorable variance of $6.9 million year over year, which was non-cash.

Speaker #4: Normalizing for this, adjusted EBITDA was down 8 million dollars year over year, and further adjusting for the timing of the Tom Joyner Fantastic Voyage, EBITDA was down approximately 7 million dollars year over year.

Speaker #4: Radio operating expenses were down 7.8 percent or two and a half million dollars, driven by lower employee compensation and fewer station event expenses. Reach operating expenses were down by 55 percent due to the absence of the Cruz event.

Peter Thompson: Radio operating expenses were down 7.8% or $2.5 million, driven by lower employee compensation and fewer station event expenses. Reach Media operating expenses were down by 55% due to the absence of the cruise event. Operating expenses in the digital segment were down 8.4%, driven by lower employee compensation. Operating expenses in the cable TV segment were down 19.6% year over year, driven by lower programming content amortization, lower marketing campaign expenses, and lower employee compensation expense. Operating expenses in corporate were up by approximately $2.1 million. The third-party professional fees were significantly down from last year. However, the non-cash compensation related to the TV One award that I just mentioned, increased by $6.9 million. Hence, the overall corporate expense was up. Consolidated adjusted EBITDA was $14 million for the second quarter, down 51.7%.

Speaker #4: operating expenses in the digital segment were down 8.4 percent, driven by lower employee compensation. Operating expenses in the cable TV segment were down 19.6 percent year over year, driven by lower programming content amortization, lower marketing campaign expenses, and lower employee compensation expense.

Speaker #4: Operating expenses in corporate were up by approximately 2.1 million dollars, third-party professional fees were significantly down from last year, however, the non-cash compensation related to the TV1 award that I just mentioned, increased by 6.9 million dollars.

Speaker #4: Hence, the overall corporate expense was up. Consolidated adjusted EBITDA was 14 million dollars, for the second quarter, down 51.7 percent. Consolidated broadcast and digital operating income was approximately 25.7 million dollars, a decrease of 25 percent year over year.

Peter Thompson: Consolidated broadcast and digital operating income was approximately $25.7 million, a decrease of 25% year over year. Interest and investment income was approximately $0.6 million in the second quarter compared to $1.8 million last year. The decrease was due to lower cash balances and interest-bearing investment accounts. Interest expense decreased to approximately $9.7 million in Q2, down from $12.4 million last year due to lower overall debt balances as a result of Urban One's debt reduction efforts. The company made cash interest payments of approximately $0.8 million in the quarter. During the quarter, the company repurchased $64 million of its 2028 notes at an average price of 51.8% of par, bringing the balance to $492.3 million as of June 30, 2025.

Speaker #4: Interest and investment income was approximately 0.6 million dollars in the second quarter, compared to 1.8 million dollars last year. Decrease was due to lower cash balances and interest-bearing investment accounts, interest expense decreased to approximately 9.7 million dollars in Q2, down from 12.4 million dollars last year.

Speaker #4: Due to lower overall debt balances as a result of the company's debt reduction efforts, the company made cash interest payments of approximately $0.8 million in the quarter.

Speaker #4: And during the quarter, company repurchased 64 million dollars of its 2028 notes, with an average price of 51.8 percent at par. Bringing the balance to 492.3 million dollars, as of June 30th, 2025.

Speaker #4: we recorded 130.1 million dollars in non-cash impairments in Q2, against the carrying value of the FCC licenses in all of our markets, with the exception of Baltimore, and goodwill impairment for certain reporting units in the radio broadcasting segment and the digital segment.

Peter Thompson: We recorded $130.1 million in non-cash impairments in Q2 against the carrying value of the FCC licenses in all of our markets with the exception of Baltimore and goodwill impairment for certain reporting units in the radio broadcasting segment and the digital segment. Due to the decline in the forecast cash flows in Q2 and continued decline in the radio industry generally, Urban One prospectively changed the useful life of the FCC licenses from indefinite lived to finite lived intangible assets, effective June 1, 2025. We recorded amortization expense of approximately $1.3 million for the three months ended June 30, 2025. Benefit from income taxes was approximately $21.4 million, and the company paid cash income taxes net of refunds in the amount of $0.2 million. Capital expenditures were approximately $1.2 million for the quarter.

Speaker #4: Due to the decline in the forecast cash flows in Q2, and continued decline in the radio industry generally, the company prospectively changed the useful life of the FCC licenses.

Speaker #4: From indefinite life to finite life, to intangible assets. Effective June 1, 2025. we recorded amortization expense of approximately 1.3 million dollars, for the three months ended, June 30th, 2025.

Speaker #4: Benefit from income taxes was approximately 21.4 million dollars, and the company paid cash income taxes net of refunds in the amount of 0.2 million dollars, capital expenditures were approximately 1.2 million dollars for the quarter.

Speaker #4: Net loss was approximately 77.9 million dollars, or a dollar 74 per share. Compared to a net loss of 45.4 million dollars or 94 cents per share for the second quarter of 2024.

Peter Thompson: Net loss was approximately $77.9 million or $1.74 per share compared to a net loss of $45.4 million or $0.94 per share for the second quarter of 2024. During the three months ended June 30, 2025, Urban One repurchased 226,041 shares of Class A common stock in the amount of approximately $369,000, an average price of $1.63 per share. We repurchased 200,549 shares of Class D common stock in the amount of approximately $117,000 and at an average price of $0.59 per share. As of June 30, 2025, total gross debt was approximately $492.3 million. Our ending unrestricted cash was $85.7 million, resulting in net debt of approximately $406.6 million, which compares to $79.1 million of LTM reported adjusted EBITDA for a total net leverage ratio of 5.14 times. With that, I'll turn it back to Alfred.

Speaker #4: During the three months end of June 30th, 2025, the company repurchased 226 thousand and 41 shares of Class A common stock, and the amount of approximately 369 thousand dollars, average price of 1.63 cents per share.

Speaker #4: And we repurchased 200 thousand 549 shares of Class D common stock, and the amount of approximately 117 thousand dollars ended an average price of 59 cents per share.

Speaker #4: As of June 30th, 2025, total gross debt was approximately 492.3 million dollars, our ending unrestricted cash was 85.7 million dollars, resulting in net debt of approximately 46.6 million dollars, which compares to 79.1 million dollars of LTM reported adjusted EBITDA for a total net leverage ratio of 5.14 times.

Speaker #4: And with that, I'll head back to Alfred.

Speaker #3: Thank you, Peter. operator, could you, open it up for Q&A, please?

Alfred Liggins: Thank you, Peter. Operator, could you open it up for Q&A, please?

Speaker #2: We will now begin the question and answer session. In order to ask a question, press star followed by the number one on your telephone keypad.

Operator: We will now begin the question and answer session. In order to ask a question, press star followed by the number one on your telephone keypad. Again, that is star one for any questions. Our first question will come from the line of Ben Briggs with StoneX Financial Inc. Please go ahead.

Speaker #2: Again, that is star one for any questions. Our first question will come from the line of Ben Briggs with Stonex Financial Inc. Please go ahead.

Speaker #5: Good Good morning, guys. Thank you for holding the call, and for taking the questions.

Ben Briggs: Good morning, guys. Thank you for holding the call and for taking the questions.

Speaker #3: Sure.

Peter Thompson: Sure.

Speaker #5: Yep. so, a couple, couple quick ones from me here. First of all, I, I'm, I'm looking at the margins here in your cable TV segment.

Ben Briggs: Yeah. So, a couple of quick ones from me here. First of all, I am looking at the margins here in your cable TV segment. I am noticing that the EBITDA margins have grown a bit. Am I right to infer that those are from this first round of cost-cutting initiatives you guys did?

Speaker #5: and I'm noticing that the EBITDA margins have grown a bit. Am I, am I right to infer that those are from this first round of cost cutting initiatives that you guys did?

Speaker #3: No, I think, the pro, the pro, the timing.

Peter Thompson: No. I think the.

Ben Briggs: Timing.

Speaker #5: Okay.

Speaker #3: Yeah. Do you wanna, do you wanna speak to it, Jody?

Peter Thompson: Do you want to speak to it, Jody?

Speaker #4: It's, it's just the timing. It's the timing issue. We, we did get some savings on programming that will be reopened this year. but, just timing of our marketing campaigns this year versus last year.

Ben Briggs: is just a timing issue. We did get some savings on programming. That will be real for the year, but just timing of our marketing campaigns this year versus last year. It is what is giving you the positive blip. Gotcha. Understood. Understood. After the second round of cost cuts, I know you mentioned that they are going to happen kind of by the end of the third quarter, so expect to see them flow through results in the fourth quarter. Can you give any granularity on what we should expect to see and how we should expect to see those cost cuts flow through the financials?

Speaker #4: is what's giving you the, the positive blip?

Speaker #5: Gotcha. Understood. Understood. and, you know, after this second round of cost cuts, I know you mentioned that, that they're gonna happen kind of by the end of the third quarter, so expect to see them flow through results.

Speaker #5: In the fourth quarter, can you give any granularity on what we should expect? To see and how we should expect to see those cost cuts?

Speaker #5: Flow through. Financials

Speaker #3: No, not.

Speaker #5: and.

Speaker #3: Okay. Not, not, not yet. We haven't tapped it. We've started the process. You know, and, but, you know, we're not, we're not finished. You know, that's the reason they have it, taken effect.

Alfred Liggins: Not yet. We haven't tapped it. We've started the process, you know, but we're not finished, you know, so that's the reason they haven't taken a bet. I don't suspect it's going to dramatically change, you know, the current guide. I think you'll see, you know, the majority of the impact, you know, come through for 2026. I don't have that answer for you, you know, just yet. But since we've talked about it on the call last quarter, I wanted to point out that we haven't gotten there yet. We wanted to go ahead and, you know, get the guide out there, you know, sort of irrespective of what that cost cut was going to bring. I mean, could it bring a million or $2 million in the quarter? Maybe. We'll find out. We just haven't tabulated yet. It's not going to take it to 70.

Speaker #3: I, I, I don't, I don't suspect it's going to dramatically change you know, the, the, the, the, the, the current guide, and I think you'll see you know, the, the, the, the, the majority of the impact, you know, come through, for 2026.

Speaker #3: But, I don't, I don't have that, the event answer for you, you know, just yet. But since we've talked about it on the call, you know, last, last quarter, I, I, I wanted to point it out that we, that, that we, that we haven't gotten there yet.

Speaker #3: You know, but we wanted to go ahead and, you know, get the guide out there, you know, sort of irrespective of, of, of what that cost cut was, you know, was gonna bring.

Speaker #3: I mean, you know, could it, you know, could it, could, could it bring a million or two million dollars in, in, in, in, in the quarter, you know, you know, maybe with, we'll, we'll find out.

Speaker #3: We just haven't, we haven't tabulated it yet. But it's not, it's not gonna take it to 70.

Speaker #4: Right. Right.

Ben Briggs: Right. Right. Okay. Got it. Got it.

Speaker #5: Okay. Got it. Got it. I, go ahead. Sorry.

Peter Thompson: Go ahead. Sorry. Ben, just circling back on the TV One margins, I am looking at the full year projections, and the margins are flat, essentially. So we are holding margins pretty well off of, obviously, a diminished revenue base, but the margins are flat. It is a good effort.

Speaker #4: And Ben, just, just circling back on the TV1 margins, I'm looking at the full year projections, and the margins are, yeah, flat essentially. So we're holding margins pretty well off of, off of, obviously a diminished revenue base, but the margins are not, margins are flat.

Speaker #4: But it's a good effort.

Speaker #5: Okay. I appreciate that. Thank you. and then next thing, and maybe the last thing from me, is obviously those 64 million of debt buybacks, during the, during the second quarter.

Ben Briggs: Okay. I appreciate that. Thank you. The next thing, and maybe the last thing from me, is obviously there were $64 million of debt buybacks during the second quarter. How are you guys thinking about debt buybacks? Obviously, your bonds are trading a little up. They are closer to 60 now than I think they were when you were buying them. Are you guys planning on continuing those debt buybacks or maybe a pause now that the debt has rallied?

Speaker #5: How are you guys thinking about debt buybacks, obviously your, your, your bonds, your trading a little up. They're, they're closer to 60 now. then I think they were when you were buying them.

Speaker #5: are you guys planning on continuing those debt buybacks, or maybe a pause now that the, the debt has rallied?

Speaker #3: Yeah. I, look, I think that our, our focus continues to be, you know, debt reduction and, and, and expense management. You know, so, whether or not we're gonna be back opportunistically, buying debt, you know, at that, this level, remains to be seen.

Alfred Liggins: Yeah, I think that our focus continues to be debt reduction and expense management. So, whether or not we are going to be back opportunistically buying debt at this level remains to be seen. Meaning that, look, one of the reasons why we wanted to get our numbers out there is so the market can have a realistic view of where we are going to be this year. So, we will still see how it all plays out. But the vast, vast, vast, vast majority of our cash is continued to be focused on our delivery. So, I do not have an answer of what we are going to do this afternoon or tomorrow in terms of debt buybacks, but our priority has not changed.

Speaker #3: meaning, you know, but one of the reasons why we wanted to get the, you know, our numbers out there is so, you know, you know, you know, the, the market can have a, you know, a, you know, a, a realistic view of what, where we're, where we're gonna be, you know, this year.

Speaker #3: So, you know, we'll still see how it all plays out. But the vast, vast, vast, vast majority of our cash, you know, is, you know, continued to be focused on, our delivering numbers.

Speaker #3: You know, we don't have an answer about what we're going to do this afternoon or tomorrow in terms of debt buybacks, but our priority has not changed.

Speaker #5: Understood. I appreciate that. That'll be all from me. I'll hand it over to others. Thank you again for the call.

Ben Briggs: Understood. I appreciate that. That will be all from me. I will hand it over to others. Thank you again for the call.

Speaker #3: Thank you.

Alfred Liggins: Thank you.

Speaker #2: Once again, for any questions, press star followed by the number one on your telephone keypad, and our next question will come from the line.

Operator: Once again, for any questions, press star followed by the number one on your telephone keypad. Our next question will come from the line of Ken Silver with Stifel Financial Corp. Please go ahead.

Speaker #2: Of Ken Silver with Staple, please go ahead.

Speaker #6: hey, hey guys. Thank you for the time. you can guys hear me?

Ken Silver: Hey, guys. Thank you for the time.

Alfred Liggins: Hey, guys.

Ken Silver: Can you guys hear me?

Speaker #3: Yes, we can.

Alfred Liggins: Yes, we can.

Speaker #6: Okay. Okay. Sorry about that. There's an echo on my end. Just a few questions. And you sort of just addressed this with the last caller, but your sales and marketing expenses on a consolidated basis were down a lot year over year in the second quarter.

Ken Silver: Okay. Sorry about that. There is an echo on my end. Just a few questions. You sort of just addressed this with the last caller, but your sales and marketing expenses on a consolidated basis were down a lot year over year in the second quarter. Is that like the new normal, or are they going to, I think you kind of, are they going to reverse a lot in the second half of the year?

Speaker #6: Is that, like, the new normal, or are they gonna, like, re I think you kind of are they gonna reverse a lot in the second half of the year?

Speaker #5: Well, there's a timing difference that Jody just mentioned for TV1, so there's some element of reversal there. But I mean, we're just tight, obviously tightening our belts across everything we can, so I don't think there's going to be a major rebound on those.

Peter Thompson: There is a timing difference that Jody just mentioned for TV One, so there is some element of reversal there. I mean, we are just tightening our belts across everything we can. I do not think there is going to be a major rebound on those.

Speaker #6: Okay. And then, I guess, I mean, if you're tightening sales and marketing a fair amount, like, I mean, is it, are you seeing any sort of, you know, unintended consequences, negatively, from, like, you know, top line?

Ken Silver: Okay. I guess, if you are tightening sales and marketing a fair amount, are you seeing any sort of unintended consequences negatively from top line, or do you feel like that hasn't affected you?

Speaker #6: Or do you feel like that hasn't affected you?

Speaker #3: I mean, that, that it's almost the other way around. It's like the sales commission, because they.

Peter Thompson: I mean, it is almost the other way around. It is like the sales commission because.

Speaker #6: Yeah, exactly. It's, it's, it's, it's, it's there, it's variable, right? Yeah. You, we have, you, we, we have not gone in and taken out, you know, salespeople, you know, in our, in, in, in, in our cost efforts.

Alfred Liggins: Yeah, exactly. It's variable, right? We have not gone in and taken out salespeople in our cost efforts. That's not, and if that's a Benny thing, in markets like Washington, D.C., we're looking to beef up, right? So we're not, sales is not an area where we're looking to take out a bunch of costs, right? It's really kind of we actually need to be reorienting our efforts in the radio business to actually increase our digital, our local digital, revenue generation. So I think that that cost reduction in that area has got to be largely related to just the revenue being down, right?

Speaker #6: That's not, you know, and in fact, if anything, you know, in markets like Washington, DC, we're, you know, we're, we're, we're looking to beef up, right?

Speaker #6: You know, we're, you know, so we're not, you know, sales is not an area, where, where, looking to take out a bunch of costs, right?

Speaker #6: Like, you know, it's really kind of we actually need to be reorienting, you know, our efforts, in, in the radio business to actually increase our digital, you know, our, our, our local digital, revenue generation.

Speaker #6: So, I think that that cost reduction in that area has gotta be largely related to just the revenue being down, right? You know? Okay.

Speaker #6: Gotcha.

Speaker #3: Yeah.

Ken Silver: Okay. Yeah, I get it. I understand. I thought it was something marketing expenditure too. I got it. I understand. Okay. Peter, I think I heard you say that a national radio of yours was down 22% in the quarter versus like a market down 11%. Is that right? If that's right, what can you maybe just talk about that a little more?

Speaker #6: Okay. I understand. I, I thought it was something marketing. Expenditure

Speaker #3: Found.

Speaker #6: too. I got it. No, I understand. okay. And then, Peter, I think I heard you say that a national radio is yours was down 22 percent in the quarter versus like a market down 11.

Speaker #6: Is, is that right? And if that's right, what can you maybe just talk about that a little more?

Speaker #5: Yeah. So national, we were down 23.6 against the market. It was down 31 so we've been.

Peter Thompson: Nationally, we were down 23.6% against the market that was down 31%. We have been struggling nationally with big clients and big agencies. There is some.

Speaker #6: Oh, okay.

Speaker #5: We've been struggling, nationally with big clients. and big agencies, there's some.

Speaker #3: Yeah. So look, yeah, so we got, we got a couple of things happen. One, you got the national, yeah, the, the natural, pressure, you know, on, you know, secular pressure on our, on our businesses, cable television, yeah, broadcast radio, and, and, and, and, and, and national, radio.

Alfred Liggins: Yeah. So look, yeah, so we got a couple of things happen. One, you got the national, the natural pressure, you know, on, you know, secular pressure on our businesses, cable television, broadcast radio, and national radio. Then you also have the pullback in DEI advertising dollars, which, you know, have absolutely, you know, hurt our performance, you know. So, yeah, it is a combination, you know, of those things.

Speaker #3: Then you also have the pullback in DEI, dollars, which, you know, have absolutely, you know, hurt our, hurt our performance, you know, and so, yeah, it's a, it's a, it's a, it's a combination, you know, of, of, of those things.

Speaker #4: And then where we're also hearing about AI, you know, AI-related.

Peter Thompson: We are also hearing about AI, AI-related, excluding radio altogether.

Speaker #3: Yeah.

Speaker #4: Excluding radio altogether, so.

Speaker #3: Yeah, so these, you know, these large language models that people are now using to do marketing campaigns, you know, are not, you know, they're emitting, you know, broadcast radio as part of it.

Alfred Liggins: Yeah. So these, these large language models that people are now using to do marketing campaigns are not, they are omitting broadcast radio as part of it. We have to figure out what the solution is for that. But again, that is more of the digital transformation that puts pressure on us.

Speaker #3: We’ve got to figure out what the solution is, you know, for that. But again, that's more of the digital transformation, you know, that puts pressure on us.

Speaker #6: Got it. Okay. And that's great. And then just lastly, on your ABL, I think it was Undrawn, but is it, is it fully available?

Ken Silver: Got it. Okay. And then just lastly, on your ABL, I think it was undrawn, but is it fully available? Are there covenants? Can you just remind us?

Speaker #6: Are there covenants? Can you just remind us?

Speaker #5: Yeah. No, it's fully, it's fully available to be drawn. there's a maintenance covenant, you know, a fixed charge ratio covenant, which we are in compliance with, so.

Peter Thompson: Yeah, it is fully available to be drawn. There is a maintenance covenant, a fixed charge ratio covenant, which we were in compliance with. So if we needed to draw on it, we could.

Speaker #5: If we needed to draw on it, we, we could.

Speaker #6: What can, what is the covenant?

Ken Silver: What is the covenant?

Speaker #5: I think it's 1.1 ratio, and we're at 1.7 off the top of my head, so we got significant headroom on that. And it's just fixed charge.

Peter Thompson: I think it is 1% on WGR, and we are at 1.7% on the top of my head. We got significant headroom on that. It is just fixed charge.

Speaker #6: Yep. Okay. Great. Thanks a lot. I appreciate it. That's it.

Ken Silver: Yep. Okay. Great. Thanks a lot. I appreciate it. That is it.

Speaker #2: And our next question comes from the line of Marlene Pereira with Bank of America. Please go ahead.

Operator: Our next question comes from the line of Marlene Pereira with Bank of America. Please go ahead.

Speaker #7: Good morning, everyone, and thanks for taking the question. I was wondering if, at a very high level, you can just let us know how you're thinking about free cash flow for the remainder of the year and for the full year. One, obviously, given the reduction in EBITDA, there should be some cost-saving elements in the second half of the year, although I know that's still to be determined.

Marlene Pereira: Good morning, everyone. Thanks for taking the question. I was wondering if at a very high level, you can just let us know how you are thinking about free cash flow for the remainder of the year and for the full year. Obviously, given the reduction in the EBITDA, there should be some cost-saving elements in the second half of the year, although I know that is still to be determined. Also, has there been any tax benefits? Sorry if I had missed that, but if you can provide some context, that would be great.

Speaker #7: Also, has there been any tax benefits? Sorry if I had missed that. but just if, if you can provide some context, that would be great.

Speaker #5: Sorry, what was the last bit?

Peter Thompson: Sorry. What was the last bit?

Speaker #3: Tax Tax benefits.

Alfred Liggins: Tax benefit?

Speaker #5: Yeah.

Speaker #7: From From the new legislation.

Marlene Pereira: From the new legislation.

Speaker #3: What new legislation?

Peter Thompson: What new legislation?

Speaker #7: I was wondering if there's any interest, benefit from, the Big Beautiful bill.

Marlene Pereira: I was wondering if there's any interest, benefit from, the Big Beautiful Bill.

Speaker #3: Oh, I don't, you know.

Alfred Liggins: Oh, I do not, yeah.

Speaker #5: No. No. N-nothing that's impacting the.

Peter Thompson: Nothing that is inside the.

Speaker #7: You don't have any interest side? Okay.

Marlene Pereira: Not on the interest side? Okay.

Speaker #5: No. No. so I, I look, we're projecting at the moment, if, if we don't do any more, debt buybacks, we're projecting about a 95 million dollar cash balance a year end.

Peter Thompson: I look, we're projecting at the moment, if we don't do any more debt buybacks, we're projecting about a $95 million cash balance a year, right?

Speaker #3: 95.

Alfred Liggins: 95.

Speaker #5: 95.

Peter Thompson: So obviously, even with the lower EBITDA, we think we are going to generate some additional cash in the back half. Was there a third part to the question? I have answered two.

Speaker #3: Yeah.

Speaker #5: so obviously, you know, even with the lower EBITDA, we think we're gonna generate, I think we're gonna generate some additional cash in the back office.

Speaker #5: Was there a third part to the question? I've answered two of them.

Speaker #7: No, so, so that was it. Just, you know, any context on the moving parts. But that's helpful, so thank you.

Marlene Pereira: No, that was it. That is helpful. So thank you.

Speaker #3: Yeah.

Speaker #2: And that will conclude our question-and-answer session. I'll hand the call back over to Alfred Liggins for any closing comments.

Operator: That will conclude our question and answer session. I will hand the call back over to Alfred C. Liggins for any closing comments.

Speaker #3: Great. Thank you, operator. Thank you, everybody, for, joining the call. As usual, we're available offline for, any additional questions that you may not have had a chance to ask.

Alfred Liggins: Great. Thank you, operator. Thank you, everybody, for joining the call. As usual, we are available offline for any additional questions that you may not have had a chance to ask. Thank you. Thank you, operator.

Speaker #3: Thank you. Thank you, operator.

Speaker #2: Thank you. And this will conclude today's call. You may now disconnect.

Operator: Thank you. This will conclude today's call. You may now disconnect.

Speaker 1: Please wait. The conference will begin shortly.