Good morning, and welcome to Townsquare's Third Quarter 2018 Conference Call. As a reminder, today's call is being recorded and your participation implies consent to such recording. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] With that, I would like to introduce the first speaker for today's call Claire Yenicay, Executive Vice President. Ma'am, you may proceed.

Thank you, operator and good morning to everyone. Thank you for joining us today for Townsquare’s third quarter financial update. With me on the call today are Dhruv Prasad and Bill Wilson, our Co-Chief Executive Officers and Stuart Rosenstein, our CFO and Executive Vice President. Please note that, during this call we may make statements that provide information other than historical information, including statements relating to the company's future prospects. These statements are considered forward-looking statements under the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties that could cause actual results to differ materially from those projections. These statements reflect the company's beliefs based on current conditions, but are subject to certain risks and uncertainties that are detailed in the company's annual report on Form 10-K filed with the SEC and we incorporate these by reference for this call. We may also discuss certain non-GAAP financial measures, including adjusted EBITDA and makes certain pro forma adjustments. Such non-GAAP financial measures should be used in conjunction with all the information contained in the quarterly and year end reports available on our website. At this time, I would like to turn the call over to Dhruv Prasad.

Thank you, Claire. Good morning, everyone and thank you for joining us today. Last month Bill and I completed the first year of our partnership as Co-CEOs of Townsquare and this marks the fourth earnings call that we have led since our management transition in October of 2017. As such, it is a natural point for us and for you to take stock of the state of Townsquare. In short, we're proud that we have executed the strategic plan that we described to you at the beginning of this year and exceptionally pleased with the financial performance our company has delivered over the last year. Let's start with our financial performance. In the third quarter of 2018 our net revenue and adjusted EBITDA came in at the high-end of our previously issued guidance range with net revenue increasing 1.9% and adjusted EBITDA increasing 6.9% compared to the prior year. In the nine months ended September 30, 2018 our net revenue increased 2.4% and adjusted EBITDA increased 6.7% compared to the prior year. As we've discussed previously, we closed on the acquisition of three radio stations in Princeton, New Jersey on July 2. The acquired assets which were a tuck-in to our existing New Jersey footprint are off to a solid start under our ownership and are performing in line with our expectations in the acquisition case that we underwrote for this deal. Pro forma for the acquisition of these stations third quarter net revenue increased 0.3% and adjusted EBITDA increased 4.6% over the prior year and our year-to-date net revenue increased 1.8% and adjusted EBITDA increased 5.8% over the prior year period. Political revenue has come in strong this year and we are outpacing the political revenue received in the comparable 2014 election cycle. In the year-to-date period we have…

Thanks Dhruv, and thanks to all of you for joining us on the call today. As Dhruv summarized, we are pleased and proud to report strong third quarter and year-to-date results that are reflective of the progress Townsquare has made across our product set over the course of the last 12 months with our Local First focus and particularly as it relates to the continued impressive growth in our digital business, Townsquare Ignite and Townsquare Interactive. For the first time last quarter we broke out the revenue results of Townsquare Interactive which we refer to as TSI our subscription-based digital marketing solutions business. As a result we thought it would be helpful to provide some additional context as you review that disclosure and our continued growth in this business which is central to our operating plan for Townsquare. As you will see in the information we have provided our quarterly filings, we are on a current annual run rate of approximately $50 million in revenue and we believe we can roughly double that run rate over approximately the next five years. As a reminder, we operate this business with contribution margins similar to our core broadcast operations. We launched TSI in 2012 in direct response to an employee concern that was raised during a town hall team meeting in one of our local markets, St. Cloud, Minnesota. This employee mentioned that although we had great digital advertising products she was facing a significant customer objection. Businesses in her city were not happy with the quality and presentation of the website. As such, they didn't want to buy advertising that directed potential customers to their websites. Townsquare Interactive's initial product offering includes the development and hosting of desktop and mobile websites in order to solve that specific problem for our local…

Thank you, Bill and good morning everyone. As a reminder, over the past 12 months and in connection with the strategic review that we conducted in late 2017, we completed several divestitures as well as a discontinuation of certain portions of our business. The results of these businesses have been reclassified to discontinued operations for the kind and historical periods and the results can be found in our quarterly filings on Form 10-Q. All the financial results that we will discuss today are related to continuing operations. In addition, the third quarter and year-to-date results I will discuss today are pro forma for the acquisition of three radio stations in Princeton, New Jersey as if they had occurred in the beginning of the reporting and comparison periods. Please refer to the tables included in our earnings release which provided GAAP results and pro forma results as well as our non-GAAP performance measures. Unless otherwise stated, all of the financial results discussed will be pro forma for these completed acquisitions. For the third quarter ended September 30, 2018 net revenue increased $300,000 or 0.3% to $214.1 million as compared to the third quarter of 2017. This was at the high-end of our previously issued guidance of $111 million to $115 million. In the year-to-date period net revenue increased $5.7 million or 1.8% as compared to the prior year period. We had another strong political quarter increasing political revenue from approximately $200,000 in the third quarter of 2017 to approximately $2.3 million in the third quarter of 2018. Political has been strong for us this year with year-to-date political revenue of $4.3 million exceeding the 2014 election cycle by $1.1 million. Excluding political revenue, net revenue increased $2.6 million or approximately 1% in the year-to-date period as compared to the same period…

Thanks Stu and thank you to everyone who dialed in this morning. In summary, we’re extremely pleased with Townsquare’s performance so far this year. As we close out the end of 2018 and turn our attention to 2019, our business priorities will remain largely consistent, delivering stable results from our live events and broadcast businesses and maximizing our digital revenue growth opportunity led by Townsquare Ignite and Townsquare Interactive, both of which we believe can grow into a $100 million businesses over approximately the next five years. We look forward to discussing our 2019 plan with you in more detail on our next call and in our annual shareholder letter. As always we welcome the opportunity to discuss Townsquare with you directly, so please call us any time with questions or just to check in. And with that we're now happy to open up the line for questions. Operator, will you please open up the call?

Thank you. [Operator Instructions] Our first question comes from the line of Leo Kulp with RBC Capital. Please proceed with your question.

Good morning guys. Thanks for taking the questions. Just a couple, first you saw accelerating non-political revenue growth this quarter, what was the driver there? Is that primarily Ignite and then what are you seeing on the auto side and then as you look at the 2019 for the live events business in your anniversary, some of the changes that you made, should we expect that you'll see some underlying growth in that business next year? Thank you.

Hey Leo good morning. Thanks for the question. This is Dhruv. So just taking those in turn the drivers of the - really the drivers of the business in Q3 and as we expect going into Q4 are Townsquare Interactive and Townsqure Ignite both of which are driving really strong growth for us as they have all year. On the auto side, we saw stable auto in Q3 which has been pretty much stable throughout the year. And then lastly as it relates to your live events question, as you know and as I think we've talked about in the past, we really operate that business focused on direct profit, so revenue fluctuates but what we expect from direct profit is low to mid single digit direct profit growth in 2019.

Got it. Thanks Dhruv.

You bet. Thanks Leo.

Thank you. Our next question comes from the line of Michael Kupinski with Noble Capital Markets. Please proceed with your question.

Good morning and thank you for taking our call. This is Tarun Aswani on behalf of Mike Kupinski. Can you please give us some color on how your data attribution business Analytic Owl performed in the last quarter, particularly how advertisers are using the tool, whether there are tweaks that need to be made such as the time lapse use from the advertising to the web traffic and if advertisers are asking for additional tool sets that this segment could provide?

Sure, good morning it's Bill Wilson. We're having great adoption of Analytic Owl. We have a white label of this Townsquare analytics and to your point what we're doing is twofold, one measuring the effectiveness of our broadcast schedules and advertising for clients and then optimizing that schedule based on day parts or endorsements or other elements of that. And the second important component that we use Analytic Owl for is testing creative, testing different creative, testing different male, female different segments, different lengths and proving quite valuable to clients and a real differentiator in our markets for our sales team. In terms of it there's things that are lacking, no. I mean, we find it extremely effective. The one thing we are doing is we're overlaying which we've talked about previously on this call our owned first party data called data squared which is proprietary but not a lacking attribution about Analytic Owl.

Okay, thank you very much.

You’re welcome.

Thank you. [Operator Instructions] Our next question comes from the line of Jim Goss with Barrington Research. Please proceed with your question.

Good morning. If you go back even a few years and talked about M&A, the response was always that everything was - the multiples were always too high. More recently, you've had a pretty good flow of acquisitions most recently, the Princeton ones, and I'm wondering if you could talk about how that whole situation has changed in terms of the multiples that are available and the numbers of properties that might be available and how long is that runway? And could you even look at maybe one of the bigger or the smaller groups that might complement your properties?

Hey Jim, its Dhruv, I'll take that one. As we're always on the - we’re always looking for attractive M&A opportunities. I think in the last 12 months we have found three that met both of our price criteria as well fit our market profile. The market profile target that we look at, so that was a happy circumstance where three deals have come together in the last 12 months, two of them importantly were tuck-in acquisitions to existing markets which is a high on the priority list in terms of allocation of capital. It’s hard to predict how that will come together and what the flow will be over the course of the next 12 months. We continue to be very active on the M&A side. We've probably seen more potential deal flow. We've probably seen more potential deal flow this year than we have in a couple of years, so that to some extent accounts for our activity, but I do think the big unknown out there is still deregulation and what might occur in terms of ownership consolidation as a result of that. So I think there will be - while there is good deal flow today I think to some extent people are waiting, sellers are potentially waiting to see what happens with new FCC rules.

Okay and as a corollary, could you discuss even a broad multiple range that you might see on the low and high end right now?

Yes, I think it’s probably somewhere between 6 and 8 depending on the situation, depending on the quality of the assets.

Okay, thanks and my other question relates to TSI. We had followed at least one of the company that had somewhat of a similar strategy in somewhat similar sized markets and I’m wondering what the competitive environment is for you with the services you’re providing and what sort of pricing power you seem to be having? Can you make even modest annual adjustments for example and what we have to create some upward momentum in that area aside from just more clients?

Hey Jim, it's Bill. So twofold, the competitive landscape which I think we touched on, on the call is quite attractive for us. There are clearly competitors out there but very few who have their own solution in-house, as I mentioned on the call built from the ground up with our engineering and product team. What we mostly see our people who are selling it but are while labeling some of the outsourced solution and even when somebody does sell their own, they don’t have the scale and the customer service infrastructure we have. So that’s been a real competitive advantage for us as we noted on the call. Our net ads in Q3 were 850 similar to our net ads in Q2 which is a stair step function up from the prior 12 months which was averaging about 400. To your question about price points, we’ve seen ARPU increase consistently throughout this year as well as compared to next year, so to your point we expect that to continue and we’re seeing nice ability to do so as we add services to our Townsquare suite of services.

Alright, thank you very much.

You are welcome.

Thanks, Jim.

Thank you. Ladies and gentlemen we have come to the end of our time for questions. I’ll turn the floor back to Mr. Prasad for any final comments.

Wonderful, thank you everyone for dialing in this morning. We appreciate your attention on such a busy day and we look forward to talking to you again in a few months.

Thank you. This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.