Good morning, and welcome to the Beasley Broadcast Group Fourth Quarter 2019 Conference Call. Before proceeding, I would like to emphasize that today's conference call and webcast will contain forward-looking statements about our future performance and results of operations that involve risks and uncertainties described in the Risk Factors section of our most recent annual report on Form 10-K as supplemented by our quarterly reports on Form 10-Q.Today's webcast will also contain a discussion of non -- certain non-GAAP financial measures within the meaning of Item 10 of Regulation S-K. A reconciliation of these non-GAAP measures with their most directly comparable financial measures calculated and presented in accordance with GAAP can be found in this morning's news announcement and on the company's website.I would also remind listeners that following its completion, a replay of today's call can be accessed for 5 days on the company's website, www.bbgi.com. You can also find a copy of today's press release on the Investors or Press Room sections of the site.At this time, I'd like to turn the conference over to your host, Beasley Broadcast Group's CEO, Caroline Beasley. Please go ahead.

Thank you, Brandon, and good morning, everyone. Thank you for joining us to review our 2019 fourth quarter operating results and our progress toward diversifying our revenue and cash flow, including our growing esports platform. Marie Tedesco, our CFO, is on the call with me this morning, and she will provide you great details of our fourth quarter financial results. First, I'd like to say I'm thrilled to review our November acquisition of the Houston Outlaws, which again further expands Beasley's role in the fast-growing esports space and reflects the company's focus on premium esports programming and content. The Outlaws franchise participates in Blizzard Entertainment's Overwatch League. This acquisition was a rare and unique team ownership opportunity as there are only 20 teams worldwide. The transaction partners Beasley with Blizzard Entertainment and its parent company, Activision Blizzard, a leading global developer and publisher of interactive entertainment content and services.And to remind everyone, our other investments in esports include Team Renegades, an esport organization consisting of 7 teams based in Detroit, Michigan; Checkpoint XP, a weekly syndicated esports lifestyle show; and a daily podcast; as well as Checkpoint XP On Campus, the first collegiate-based esports show in the U.S. Our investments in this arena are unique and diversify our audio-focused radio and digital operations.So turning over to our radio operations, the initial integration of Detroit's DMK and DMK HD2 acquired in late '19, they've gone very well. We remain confident that the addition of DMK will mark further progress toward our goal of capturing 30% revenue share in each of our markets while delivering valuable synergies and the potential for SOI margin improvement. And as such, we look forward to realizing the full financial and strategic benefits of the transaction in 2020.Now looking at fourth quarter results and largely reflecting the…

Thanks, Caroline. I will begin with a review of the fourth quarter results, followed by a review of our balance sheet. Fourth quarter net revenue decreased 4.6% or $3.5 million to $72.1 million with a decrease primarily coming from the just discussed year-over-year decline in political revenue. Despite this nonrecurring political revenue, we realized revenue increases in our Augusta, Charlotte, Detroit, Philadelphia and Wilmington clusters. Again, as Caroline mentioned, the year-over-year comparison was impacted by the approximate $2.8 million decline of net political revenue and a $300,000 of nonrecurring spectrum revenue, which, combined, would be equivalent to 3.7%. Full year revenue increased 1.6% on a natural basis as we achieved revenue increases in the following 6 markets: Augusta, Boston, Charlotte, Detroit, Philadelphia and Wilmington. Boston and Philadelphia were the two main drivers of the year-over-year increases. Las Vegas saw the biggest decline due to the high level of political revenue booked in this market in 2018.Station operating expenses for the quarter increased 2.8% to $56.5 million, inclusive of expenses related to esports that we did not occur in the comparable 2018 period. SOI for the quarter declined $5 million to $15.6 million, which was primarily related to the decline of political revenue and the Q4 esports expenses. Excluding the decline in political revenue, fourth quarter SOI declined $2.2 million or 12% and $1.5 million or 8.7% on a same-station basis. Full year actual SOI decreased $1.3 million or 2.1% and would have increased 3.7% when excluding political. Same-station SOI for the full year decreased 6.1% and would have been flat when excluding the decline in political.Looking at our revenue categories for fourth quarter on an actual basis, consumer services remained our largest revenue category at around 26% of our revenue, and we had a 4% year-over-year revenue increase in this…

Thank you, Marie. So we spent the better part of 2019 aggressively rolling out our digital expansion and transformation across the company, and we're now beginning to see the reward with digital revenue continuing to increase double digits each quarter year-over-year. Todd Handy, our CDO, has more than a decade of expertise in the digital media space and is focused on driving best sales practices, process improvement and advertiser ROI to realize significant year-over-year digital revenue increases. Todd and his team continue to hire the digital ops and services teams as we are building out our trafficking and ops functions to support higher growth rates across our digital products and services. The build-out of our dedicated digital sales team is focused on driving new net digital revenue and targeting the sale of non-radio products to non-radio advertisers. Reflecting the successes of our digital initiatives and strategies, as I said earlier, quarterly digital revenue grew 44% in fourth quarter. And for the full year, our digital revenue grew 28.5%.These results also highlight the significant strides we're making on the digital content side as we meaningfully expanded our digital content throughout '19. As a result, we drove a 57% increase in digital traffic users, and page views increased to 104 million, representing a 34% increase.Overall, we're pleased with the momentum and the trajectory of our digital growth initiatives, yet we believe we are only in the early innings. With the right team, strategies, content and other offerings now in place, we expect 2020 to be another year of solid growth on this front. And as noted earlier, we closed the acquisition of the Houston Outlaws in mid-November, and we began integrating this brand into BMG BXP immediately. We relocated the entire team, coaching staff to Houston in advance of the 2020 Overwatch…

Great. Thanks, Caroline. We have gotten some questions. Many of them were addressed on the call today. I have a couple of additional ones that I will take right now. First question is are you seeing any political dollars from Bloomberg and can you quantify it. So as of this morning, we have about $1 million plus of political revenue booked amongst our markets, and that -- at least half of that is coming from Bloomberg.Another question is can you remind us where you expect leverage to sit at the end of the year. Based on my latest model, we expect to be around 4.2x at the end of 2020. And I will let Caroline comment on that as well.

Yes. So everyone on this call knows that our target is 4x or below, and we're working very diligently on addressing that. But at this point, we are projecting 4.2x through the end of the year.

Thanks. And the final question is how should we think about operating expense trends for 2020 given all the investment spend. And how should we think about margins?

Yes. So let's focus on EBITDA margins with this. And as you've heard on the call today, we've really been focused on our investment initiatives in an effort to diversify our revenue. So I'm really pleased to say that for first quarter, we are seeing our EBITDA margins should be flat, considering the investments that we're making, and this does exclude Outlaws. But going forward, for the rest of the year, we do expect our EBITDA margins to grow given the fact that digital revenue will far exceed the investments that we're making. So with that, we're really pleased with our progress. We thank you for your time, and feel free to reach out to Marie or myself with any questions.

Thank you. Ladies and gentlemen, this concludes today's event. You may now disconnect your lines.