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Operator: 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 13, 2025. Please note that Urban One disclaims any duty to update any forward-looking statements made in the presentation. In this call, Urban One may also discuss some non-GAAP financial measures in talking about its performance. These measures will be reconciled to GAAP either during the course of this call or in the company’s press release, which can be found on its website at www.urban1.com. A replay of the conference call will be available from 2:00 P.M. Eastern Daylight Time, May 13, 2025, until 11:59 P.M. Eastern Daylight Time, May 20, 2025. Callers may access the replay by calling (1) 800-770-2030. International callers may dial direct (1) 609-800-9909. The replay access code is 7968738. Access to live audio and a replay of the conference will also be available on Urban One’s corporate website at www.urban1.com.

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

Alfred Liggins: 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 Drewer, who’s our TV One Chief Financial Officer for any TV questions; Karen Wishart, our Chief Administrative Officer; and also Christopher Simpson, who is our General Counsel. You’ve seen the earnings release, Q1 results largely in-line with the guidance that we gave. Q2 radio pacings have weakened since our last conference call. They’re roughly down about 9% now. However, as I said on the conference call, last quarter, our TV ratings seem to have stabilized in Q1 and Q2 and are in line with what we budgeted. So with that, we’re continuing to reaffirm the guidance that we gave of $75 million of EBITDA.

Something, again, to note on our 2024 EBITDA, which was about $103 million, almost $10 million of that was a non-cash adjustment for the TV One award associated with my contract. So if you’re looking at apples-to-apples, it’s roughly about $92 million of cash EBITDA down to $75 million. Still not a stellar year-over-year performance going backwards, but what we have expected. So with that, we have said that we’re going to continue to focus on our cost controls, managing our leverage and maintaining a strong liquidity position. One of the things that came up in the last conference call is what were we going to do with our $137 million of year-end cash and since that conference call, we’ve actually bought back in the open market $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.

So 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’re prudent and you make moves that keep you in the best possible position of flexibility in terms of leverage and expense control, and that’s what we’re really focused on. So with that, I’m going to turn it over to Peter to get into the specific details of the numbers, and then we’ll come back.

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 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%. Our national ad sales were down 14.6% against our markets being down 11.6%. 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 health care, entertainment, retail, government, auto, food, and beverage.

Net revenue for each Media segment was $5.9 million in the first quarter, which is down 30.9% from the prior year. And adjusted EBITDA at each was a loss of $600,000 for the quarter. A combination of client attrition and lower average unit rates drove that decline. Net revenues for the Digital segment were down 16.2% in Q1 at $10.2 million. Audio streaming revenue was down by $2.1 million in the quarter due to the renegotiation of an exclusive third-party deal, and that impacted adjusted EBITDA, which was $58,000 compared to $2.3 million in the prior year. We recognized approximately $44.2 million of revenue from our cable television segment during the quarter, a decrease of 7.9%. Cable TV advertising revenue was down 6.3%. TV One delivery declined 18% in total day persons 25-54, which is partially offset by an increase in CLEO 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.

Cable TV affiliate revenue was 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 and 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. CLEO TV had 35 million Nielsen subs. Operating expenses, excluding depreciation and amortization, stock-based compensation and impairment of goodwill, intangible 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 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.

Radio operating expenses were down 2.9% or approximately $0.9 million, driven by lower employee compensation costs. Reach operating expenses were down 1.7%, again, driven by lower employee compensation costs. Operating expenses in the Digital segment were up 3.2%, and that was driven by higher traffic acquisition costs, partially offset by lower employee compensation. Operating expenses in the Cable TV segment were down 10.8% year-over-year, driven by lower programming content expense, on-air promotions, and employee compensation costs. Operating expenses in the Corporate and Eliminations segment were down by approximately $3.8 million, driven by lower third-party professional fees. 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%. 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 for Q1, down from $13 million last year, due to the lower overall debt balances as a result of the company’s debt reduction strategy. The company made cash interest payments of approximately $21.6 million in the quarter. During the quarter, the company repurchased $28.2 million of its 2028 notes at an average price of 58% of par, bringing the balance at quarter end to $556.348 million.

In April, the company repurchased an additional $60.4 million in notes at an average price of 51.9%. And as Alfred said, that brings the current balance on the debt to $495.93 million. We recorded $6.4 million in noncash impairments in Q1 against the carrying value of our FCC licenses in five of our radio markets, which are 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 NOL balances. The company paid cash income taxes in the amount of $33,000. Capital expenditures were approximately $2.5 million. Net loss was approximately $11.7 million or $0.26 per share compared to net income of $7.5 million or $0.15 per share for the first quarter of 2024.

During the three months ended March 31, 2025, the company repurchased 449,252 shares of Class A common stock in the amount of approximately $700,000 at an average price of $1.48 per share. And we also repurchased 303,622 shares of Class D common stock in the amount of approximately $300,000 at an average price of $0.87 per share. As of March 31, 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. And finally, we recast the comparable periods for 2024 to reflect the move of $7.9 million of CTV revenue from digital to TV and also the reapportionment of cross-platform sales and marketing expenses.

We talked about that on the last earnings call. A number of questions came up, so we thought we’d just give you the comps from prior quarters with those recast numbers. And with that, I’ll hand back to Alfred.

Alfred Liggins: Thank you very much. Operator, we can go to the lines for Q&A.

Operator: We will now begin the question-and-answer session. [Operator Instructions] Our first question will come from the line of Ben Briggs with StoneX Financial Inc. Please go ahead.

Ben Briggs: Hi. Good morning, guys. Thank you for taking the call.

Alfred Liggins: Absolutely.

Ben Briggs: So a couple here. So first of all, I do notice that you guys did some cost-cutting during the quarter. Both the programming and technical expense line and the SG&A and corporate line, I think, were down a little bit. What other levers do you have that you can pull to kind of control costs as the year goes on and in the future?

Alfred Liggins: Yeah. I mean I said last conference call that we did a bunch of year-end last year cost-cutting measures, and I think it saved us about $5 million. We are focused on taking another look at that for this year. We haven’t got there yet, probably we’ll focus on that so that it’s done by the middle of the year. So really focused on kind of like an end of June execution date on that. And so look, I don’t want to go into specifics. Quite frankly, I don’t have all of the opportunities off the top of my head. And even if I did, I certainly wouldn’t want to announce them on the conference call. Yeah. Let’s say, we do believe that there are other opportunities and plan to take advantage of them. But we’re really managing to our guidance and then looking to see if we’re doing better. Our guidance of $75 million does not include any back half cost cuts that we might find.

Ben Briggs: Got it. That’s helpful. Thank you. So 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…

Peter Thompson: We didn’t catch that. Repeat that.

Ben Briggs: 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?

Peter Thompson: Yeah. So more than half for sure.

Ben Briggs: Right. Can you give any guidance for what you think the second quarter has in store as far as EBITDA expectations?

Peter Thompson: I don’t think we’re going to give specific guidance. I think from the pacings, Alfred said that radio has weakened, right, 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 we’re not going to be strongly profitable in the second quarter. And then TV, TV One ratings down a little down a bit, being compensated for by CLEO. 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, that might need to wash against radio. So I think Q2 will be a little bit better than Q1, but similarly weak, and then we got to deliver in the back half of the year then.

Ben Briggs: Got it. And then finally, obviously, there have been additional debt repurchases. I know the market likes to see those. Should we expect further debt repurchases as the year goes on or is it more?

Peter Thompson: As I’ve been told many times before, the best predictor of the future are actions of the past. You’ve heard that, too? Yeah. I mean, look, I mean, we try — not try, we deliberately are opportunistic, right? Like, we don’t like it when we announce, hey, we’re going to go in the market and then everybody looks at that as an opportunity for our debt to trade up and expects us to pay more, right? And so we’re in, we’re out. We got a price that we want to try to get it at. It’s nothing personal to debt holders. But at the end of the day, buying back debt at a discount for those funds that want to sell ultimately helps the company. And so, yeah, we’ll continue to do that. Almost always, though, any time we go into the market, the price goes up, right, just because you got — we’re the most motivated buyer, right?

I mean. And I think at the end of the last conference call, the debt had been trading at like 49.5%. And then when we got to the market literally that same day or shortly thereafter, I think our cumulative purchases during that period of time were kind of like almost at 52, right? So yeah, we’re okay with that. Like, we had some big trades of people who wanted to exit and wanted to see some sort of uplift. And it’s good for everybody. But as you can see, the vast, vast, vast majority of our capital is going to that. So I mean, we took out tens of millions of dollars of debt since the last call. And unfortunately, I think we’re continuing to still be in a position to be impactful with that.

Ben Briggs: Okay. 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?

Peter Thompson: No. Yeah. I mean look, it’s not — most of the people on this call are investors and smart investors. And so it shouldn’t be lost on anybody that we do have an undrawn revolver, right? So that capital is available for all things, including if we used all of our cash to buy back debt and we needed operating funds, right, to do that. So our liquidity position remains very solid and gives us some options.

Ben Briggs: Okay. All right. I think that’s going to be off from me, right now. I’ll give some other people the chance to ask questions. Thanks, again.

Peter Thompson: Thank you very much. Next question, operator.

Operator: Our next question will come from the line of Aaron Watts with Deutsche Bank. Please go ahead.

Peter Thompson: Hey, Aaron.

Aaron Watts: Hey, guys. Thank you for having me. A couple of 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 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 need to see or hear to start ramping spend back up?

Alfred Liggins: I mean I think they need to know what their expense profile is going to look like going forward, right? And with the tariff picture moving weekly, right, 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 of high level conversations with some monstrous advertisers. And most of these big guys, they don’t want to disclose what their ad budgets are, right? That’s proprietary information, right, how much you’re spending to compete in the marketplace. So strategy, really core strategy that would result in how much money is going into the ad market into which verticals is not readily available, and I get it.

It’s really kind of a trade secret for them, right? And so we just don’t have visibility into that. But I can tell you, we do know when their ad budgets are getting cut or put on hold. And then they will tell you it’s because of uncertainty. I mean it’s no secret that you’ve seen reports that the consumer is cooling down, cooling off, or whatever spend is slowing down, uncertainty. I mean, at the end of the day, regardless of where the tariffs land, they’re going to land at some higher level than they were before, right? And I saw something this morning on CNBC, where 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 to price increases, which ultimately is inflationary, which one would think there’s a knock-on effect in a recession.

But I’m not an economist. I don’t know this economy has been chopping down trees and plowing through all kinds of headwinds. So far bit for me to predict what’s truly going to cause a recession and what its ultimate impact on the ad market is. It’s not positive at this point in time. So I guess in a roundabout way, this is just Alfred Liggins’s opinion paired in the story. I do not think you’re going to see a positive ad rebound this year because I think lot of these guys have already — once you take expense off the table in a corporate environment, it generally stays off the table for the remainder of that budget cycle.

Aaron Watts: Yeah. No, that all makes sense. So more a hope of stabilization than any real positive significant bounce this year. Okay. 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 and — what’s your split between national and local these days?

Alfred Liggins: What is it? Peter, is it 75-25 or…

Peter Thompson: It’s more 75-25. That’s sort of excluding the digital piece.

Alfred Liggins: I went through with the radio guys, and I have a weekly call with them now. And look, they were growing. Local is actually not doing that bad, right? Like, I think they were telling me that our local was only down is like less than 2%, like 1.5%. We were looking at pacings about a week ago or two weeks ago. The driver for us is national. And also, we’re having digital issues for a couple of reasons, and I articulated them, changes in our podcast and streaming deals that are out there, and also the fact that we’re underpenetrated in our local digital efforts. And so the answer to your question is local in the radio business, it’s down, but it’s not down double-digits, it’s not down as dramatically. It’s down low-single digits.

So I would say that, that’s a positive sign. We’re going to lap our digital issues, and we’re looking to improve our digital efforts. And so, one would think that you’ve got two things that drive national ads, right? You’ve got the market sentiment, okay? And when I say market, consumer sentiment, what advertisers think about consumer activity, and their prospects for business. But you also have the continued digital transition away from analog into digital platforms. And so, national definitely is the negative spot right now. And I hope that abates at some point in time after stability comes into play.

Peter Thompson: And just to clarify, just in terms of national dollars and radio dollars for radio, it’s 2:1. So for every dollar of national, we do roughly $2 of local. And the difference in the 75-25 is digital and other, right? So, as a percentage of the total, it’s a different number. But relative to each other, it’s 2:1.

Aaron Watts: Okay. And Alfred, just one last one on what you were saying there at the end around digital. Once you iron out your 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 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 area. We’ve had all of our efforts focused on our national digital. I don’t want to say all of our efforts because we do have a local digital business, but we’re probably doing high-single digits of revenue when our competitors are having it be 20% of their revenue. And so, yeah, I do think that there are areas of growth for us in that area, doing a better job there. We don’t cross-pollinate our national products into the hands of our local sellers intentionally at this point in time. iHeart does. Audacy 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. So that’s something that we’re focused on and will create a growth opportunity as well.

Aaron Watts: All right. Great. Appreciate all the time. Thanks, again.

Operator: [Operator Instructions] And our next question comes from the line of Ken Silver with Stifel. Please go ahead. Ken, your line might be unmute.

Ken Silver: Hey. I’m here. Thanks. Sorry about that. Hi, Alfred and Peter. Thanks for the time. I guess a few questions. One is, if we look at the cable TV revenue, can you break it out between carriage fees and advertising?

Peter Thompson: Sure. So obviously, for the quarter, we do that on page — I think it’s Page 5 of the press release.

Ken Silver: Okay. I missed that. Okay.

Peter Thompson: 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 you…

Ken Silver: I do. I apologize, if you broke it out, I will go.

Peter Thompson: No. That’s okay. 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…

Ken Silver: Sure. And on the carriage side, do you have like, what is your renewal schedule with all the large cable and other MVPDs?

Alfred Liggins: Charter is up in the fourth quarter. October, is it? Charter is up at the end of the year. And Verizon is up, but they’ve got an option. And then, we have NCTC, (ph) which is in September. So we have NCTC, Verizon and Charter up this year.

Ken Silver: And then what about next year, is it heavy or light next year?

Alfred Liggins: Comcast comes a year later, right?

Peter Thompson: DIRECTV, AT&T and Comcast.

Alfred Liggins: AT&T and Comcast a year later.

Ken Silver: Okay. Got it. And then, you mentioned in your prepared remarks that ratings were down at TV One. Can you just help us understand that a little bit better?

Alfred Liggins: I said they stabilized, right?

Ken Silver: Okay. I’m sorry.

Alfred Liggins: Yeah. They were down a lot last year, what, 20%-ish. And they bounced up off of their lows of fourth quarter. And I think we budgeted what our ratings were in fourth quarter for all of ’25, and fourth quarter was kind of a low, and we’re actually exceeding that year-to-date, exceeding that budgeted number. So, we’re averaging higher than our fourth quarter low, which is good.

Peter Thompson: And CLEO, especially

Alfred Liggins: And on our second network, CLEO, especially.

Ken Silver: Okay. And then I mean, obviously, you’re using a lot of cash flow for bond buybacks, which I think we all think is a good use of capital. But in terms of programming spend, is it sort of steady as she goes or is the potential to grow it a lot?

Alfred Liggins: No, it’s actually down a bit. I wouldn’t say majorly. We’d say maybe down 10%. Programming spend?

Peter Thompson: Yeah. The biggest drop quarter-over-quarter was [indiscernible].

Alfred Liggins: Yes. So we have an annual award show that we didn’t do. And then for the year, yes, 10% about 10% for the year…

Ken Silver: And I mean, obviously, there’s a lot of content out there are no plans to sort of try to reinvigorate the business and spend a lot of money on programming.

Alfred Liggins: Well, the problem. No, there’s not a plan. Look, we are thinking through now what our options are to grow our TV business because we have to get more delivery, right? But you need the idea that you go spend more money just to put it on your linear networks when the universe is shrinking on its own means that you’re just going to lose. You’re going to lose on those content investments because you’re going to lose audience regardless of any way you look at it. However, there are multiple new ways of delivering content. We continue to expand our FAST channel distribution. We’re looking at another ad-supported distribution opportunities and potential business models. And so, I think that is critical that we invest and move in that area.

So you will not see us just investing in content just to put it on this existing platform. You will potentially see us investing in content in combination with an expansion of new distribution opportunities in the FAST and AVOD environment because we need other places to be able to monetize that content. And so we’re formulating those strategies right now. And you got to approach that. At the same time, you’re continuing to manage your balance sheet, etc., 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 TV One’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%, obviously, as attrition has reduced the affiliate line.

Ken Silver: Okay. Great. Okay. Thanks so much. Appreciate it.

Operator: 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: Thank you, everybody for your support and continued interest in the story, and we’ll talk to you next quarter.

Operator: That concludes today’s call. Thank you all for joining. You may now disconnect.