Ladies and gentlemen, thank you for standing by. Welcome to Urban One's 2020 Second Quarter Earnings Conference Call. I've been asked to begin this conference 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 -- pardon me, 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 July 30, 2020. 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.urbanone.com. A replay of this conference will be made available from 12:00 p.m. Eastern time 7/30/2020 until midnight 8/1/2020. Callers may access the replay by dialing 1 (866) 207-1041. International callers may dial direct (402) 970-0847. The replay access code is 2877475. 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 7 days after the call. No other recordings or copies of this call are authorized or may be reliable. I'll now turn the call over to Alfred C. Liggins, Chief Executive Officer of Urban One, who is joined by Peter D. Thompson, Chief Financial Officer. Mr. Liggins?

Thank you, Operator. And also joining me per usual is Jody Drewer, the Chief Financial Officer of TV One in case we need to drill down there; Karen Wishart, our Chief Administrative Officer; and Kristopher Simpson, who is our General Counsel. You've seen the press release. As expected, Q2 was a very tough quarter because of COVID. We guided, we let you folks know where our business was pacing down to, and it came in pretty much as expected. I think our EBITDA came in better than we had expected. The company cut an extraordinary amount of costs to minimize the impact of the EBITDA, and I just want to take my hat off to the management team and all the employees who have done an amazing job of really battening down the hatches as this virus was really ravaging the economy and our advertisers and businesses, etcetera. Radio was the most impacted. We see Q2 as the bottom, fortunately, and we're starting to see sequential improvement going into Q3 for sure. Our cable business is helping us a lot, and we'll actually see EBITDA at TV One grow year-over-year in 2020 in spite of COVID. Given the current climate for social justice, we're also seeing a lot of new interest in our audience and platform as well. I'm going to go into some more detail after I turn it over to Peter, who's going to drill down on the numbers, and then he'll hand it back to me and I'll give you a little more color after that. Peter?

Okay. Thank you, Alfred. So net revenue was down 37.5% for the quarter ended June 30, 2020, at approximately $76 million. As Alfred said, the impact of COVID-19 was felt most strongly in our radio segment where net revenue was down 58.4% in the second quarter. National ad sales were down 49.1%, while local advertising sales were down 61.2%. On a same-station basis, which excludes Detroit, our radio segment net revenue was down 56.6%. And excluding political, it was down 57.1%. The worst affected categories were entertainment, which was down 90%, food and beverage, down 83%; travel and transportation down 72%; auto down 71% and telecom down 68%. Net revenue for Reach Media was down by 66.6% in the second quarter, of which approximately 45% is attributable to the postponement of the Tom Joyner Fantastic Voyage cruise. Adjusted EBITDA was down regionally by approximately $1.7 million or 51.6% year-over-year. The Tom Joyner Fantastic Voyage event generated $1.7 million of adjusted EBITDA in the second quarter of 2019. It was postponed this year due to the pandemic. Net revenues for our digital segment decreased by 20.4% in the second quarter, and adjusted EBITDA for the digital segment decreased by approximately $129,000. We recognized approximately $43.8 million of revenue from our cable television segment during the quarter, a decrease of 5.7%. Cable TV advertising revenue was down 4.4%, driven by lower demand due to the pandemic, leading to an average unit rate decrease of approximately 14%, which was partially offset by higher delivery. Cable TV affiliate revenue was down by 7.4%, with rate increases of approximately $1.3 million, offset by churn of approximately $3.3 million. Cable subscribers, as measured by Nielsen, finished Q2 at $51.4 million, down from $51.8 million at the end of Q1. We recorded approximately $40,000 of cost method…

Thank you, Peter. So look, the recovery is really for us going to be all about local radio and what that trajectory is going to be. That's really the wild card for us. We had to make some assumptions of how we thought things were going to bounce back after the recovery. And I think the first assumption is that they -- excuse me, after reopening. The first assumption was that things were going to bounce back. And that's the good news, they have, but it's still too early for us to tell exactly what that percentage down Q3 is going to be. Our July is kind of finishing down in the low 40s, and that's down from kind of the high 50s that we were seeing in Q2. So that's good progress. Q4 is going to be important. We've got the political ad spending that's going to be coming into play. We've started our conversations, deep conversations with the Biden Campaign and are very encouraged and hopeful about their need to reach our audience. When we look to our other businesses, we feel pretty good about the Reach Media, which is national radio, not local dependent. Right now, we're forecasting that their EBITDA should be about flat to 2019 at about $7 million. TV One, TV One has been a great bright spot. We did $82 million or $83 million of EBITDA in 2019, and we should probably get to $90 million of EBITDA this year at TV One. They just had some really good news. TV One got their first virtual MVPD over-the-top launch, the service Philo launches TV One at the end of July to 700,000 customers and getting incremental carriage for TV One, which is an established network. It's been around a long time, it's a…

[Operator Instructions] Our first question will be from Aaron Watts.

Alfred, just trying to think about the overall radio ad environment, do you feel that your ad performance and pacings were relatively in line with the overall marketplace? Are your stations outperforming or lagging a little bit? And any reason you might think that could be?

Look, I don't know for sure yet because I haven't seen anybody else's numbers. I think you're going to find that we're going to do better. Look, I've been channel checking, I've been talking to other people. And the folks that I've checked with, we definitely have been outperforming those pacing numbers. And so I'm going to wait and see how things roll in. But if I had to bet, I think you're going to see us outperform.

Yes. And look, to back out for Q2, we got the Miller cap data in and on a total spot basis, we beat the market by about 4 percentage points.

Yes. We've got a number of things going in our favor, not the least of which is some renewed interest in our platform. Our stations are still performing pretty well ratings-wise, even though overall ratings went down. But yes, I think you're going to see our radio business outperforming.

Yes. And your comments around some of your advertisers having an increased focus on African-American owned and operated focused businesses. Do you think those efforts will benefit across your platform? Or do you think it's going to be more focused on TV or radio specifically?

They've been cross-platform conversations. The Procter & Gamble conversation was digital, radio and TV.

Okay, got it. And last one for me, it seems as though traffic volumes have increased or recovered a lot over the last few months. And I know there's some ebbs and flows to that as COVID kind of dovetails or improves in some areas. But traffic improving seems to be a theme. You're still seeing some pretty steep down pacing for third quarter, down 40%, give or take. What do you think it will take for the advertising to come back and follow those sort of traffic volume improvements that we're seeing out there?

I mean you got -- you need a stabilization on the way we live, right? I mean you've got businesses that are operating at 50% capacity, 25% capacity. You can only have so many people in a store at any given time. You've got to be six feet away, everybody's got to wear mask. That puts a damper on some of the experiences that you've had. Right now, we're all focused on being safe and trying not to get sick and people are dying. But in order for business to really come back, you're going to have to see a -- you're going to have to see a handle being put around this virus. I think you're going to have to see more certainty around the slow of infection, that cases are dropping. And then what's the trajectory of a vaccine? I had a conversation last night with somebody who is high up in one of the major pharmaceutical companies. And they were really bullish about vaccines making it to the market by the end of the year. And this was a very well-placed person at a very big pharma company that's participating in all of that. So, I think that's what has to happen. That's why you don't know whether or not Q3 is going to be down 40% or down 30% because you just -- Houston was -- Texas opened up first, we were like, okay, great. We're off to the races. We're in Houston and Dallas. But then you start to see those infection rates in Houston explode and hospitalizations. And then it slows. And I mean, we definitely saw money get canceled from that. So -- and then I'm starting to read that things are flattening out. The curve is flattening. And if that starts to happen, and if you do get your arms around it, then I think you'll see another bump. But we've definitely been seeing an increase of local advertiser activity. But we got to get out of this choppiness. People are still very scared and very cautious. The back-to-school issue is problematic because at least a large portion of our workforce are women who also care for their children, and it's very difficult to school from home and work at the same time. And businesses are going to have to adjust to that. And so look, I'm starting to ramble as if I like really know something, but that's just my viewpoint of what has to happen is you just got to get back to more of a normalization. I think people, I don't think, I know people want to be normal. I mean this is really taking a toll on folks about how their mental health and how they feel in their day-to-day lives. So people are going to want to go back to doing what they have done before. We've just got to get the safety right. Operator, can we see the next question?

That will come from the line of Ben Briggs.

I just have a quick one here. So I heard you give guidance for EBITDA at TV One in 2020 of about $90 million. That's up, call it, 10% or so from 2019 EBITDA, it looks like it was $82 million, $83 million at TV One. Reach you said would be about flat. Did you give guidance that I missed for the radio EBITDA? Or is it just [indiscernible].

You didn't miss it. We didn't give it. Yes. It's just too -- I mean, I would really -- I just don't know yet. Yes, I'll know better in another month, right, after we see how Q3 starts to play out. We're a month into Q3 already. I can tell you this, for July, I mean, we added money pretty much every day. It was one of those where money added was more positive in cancellations pretty much every day. And that was the first month that we've had that. And look, and there wasn't great news throughout July, right? It was choppy, so we were seeing that. So I'm hopeful. This is all, to me this is not whether or not things return to some level of normalcy. It's just when and whether -- and who can withstand it, who can withstand the elongated pain?

Yes. So and kind of actually, in that vein, I know you ended the quarter with a pretty strong liquidity position, and you had $70 million of cash. Just in that vein of it's not an if, but a when, I know liquidity is at the top of people's minds right now. Could you give a cash balance as of today or even a more general you guys feel comfortable with your current liquidity position and your liquidity position looking forward?

We do. I think as of this morning, we were around $76 million, assuming all the unpresented checks clear. So I think it's -- actually, liquidity has held up very well. And so yes, we feel comfortable with that. At some point, I think we look to pay down some, if not all, of the ABL. But for right now, we'll leave that outstanding just out of an abundance of caution, but liquidity has generally been pretty robust.

Sure. Okay. And then last thing, are there any talks, I know capital structure is always at the forefront of your minds. Are you having any thoughts related to the capital structure, kind of take a backseat as you guys manage through the COVID-19 crisis? Or are there any thoughts you're having on the capital structure right now?

No. Yes, capital structure, maturities, all of that stuff is front and center for us, and we're deep in conversations about different solutions. Different solutions to drive additional liquidity, different solutions for dealing with maturities, talking to our existing debt holders. We stay in constant contact with the major debt holders for the company. And so we're looking at -- we've got a lot of irons in the fire. And I would say that it is probably, I'd say, sure. The #1 goal was to make sure that we were covenant compliant. So we didn't have any sort of event of default issue. And we've been doing that and feel great about that. And then tracking where the business is going and then managing that. And then secondarily, its capital structure and what are the options for resolving our upcoming maturities and also taking some of the pressure off. We're hyper focused.

We'll go next to the line of Kirk Lucky. [Ph]

Very impressive on the cost reduction side. I think you've mentioned in the past that some are temporary, some are longer term. Can you give us a range of what a normalized run rate might be on some of these line items like programming, SG&A, corporate?

Yes. It's tough to do that because there's just so many variables. Obviously, we've got a pretty strong handle on the Q3 cost base and where that's going to come out. I mean the employee piece of that is probably around $6 million compared to the $7 million that we saved in Q2. The programming piece for Q3 is about $2.8 million less year-over-year. So slightly more savings there in content amortization. The marketing spend is about $1.5 million of savings in Q3. Contract labor is about $900,000, travel and office expenses, about $0.5 million. Variable expense is projected to be about $2.6 million down. And events about $1.5 million down at the radio stations and about $3.1 million down at Reach. So if you total all that lot up for Q3, there's about $20 million of savings in Q3 that are embedded in our current projections. And I can't really annualize our run rate at the moment because things are so kind of fluid, particularly around events and that kind of thing. But hopefully, that gives you a sense of the scale of what we're doing and what that would look like rolling it forward another quarter.

That's very helpful. Thank you. A couple of revenue related questions. I'm curious with respect to events, is there a way to pivot from kind of the traditional in-person events to virtual events? And do you have anything on the horizon that might generate that?

I mean, look, the answer is, sure, you could do that, but it's not -- I mean, our events, many of them are reliant on people showing up and buying tickets, right? Our Women's Empowerment event in Raleigh, North Carolina, we probably sell 12,000, 15,000 tickets to that thing. So you could do a virtual event and have your seminars and the whole bit, but is somebody going to pay to see that online? You certainly can't generate enough advertising dollars to match the profitability that you would have had. So yes, there are some things that we're doing, but it's -- but they won't be the same. We may do a virtual event for our Urban One Honors awards show that we had last year that's in Q4. The BET Awards were done virtually, and they actually did a really good job. But generally attached to the BET awards is a whole BET experience, where there are concerts and three days of weekends and stuff. The point is that you just won't be able to make up the revenue scale for events in person. But can you actually execute something? Yes. I don't know what the profitability looks like, but it's not even close to a replacement.

That's helpful. On National Harbor, can you get to your old revenue sharing number even though the casino is only open 50%?

I don't know. But look, the answer is no, you're not going to get to -- we did $7 million last year. You're not going to get to that same number. But it's going to be -- it's going to be better than we thought it was going to be at 50% capacity. I don't know. I'll know what those numbers are in six days when they get released, like everybody else does, because they release the numbers to the state of Maryland usually during the first week of the following month. But I can tell you, they did, the very first week they were open, gosh, they did close to $10 million, I think it was, $8 million to $10 million in the very first week at the end of June. And July has been very strong. So I think we'll be happy where it is. I'm not expecting us to get to any sort of normalized revenue level for any of our businesses. And by the way, when I gave you those EBITDA guidance numbers, some of them are pretty positive. And I didn't even mention our digital business, but our digital business did about $1 million of EBITDA last year, and it will probably get to double that this year, too. A lot of that is on the back of holding revenue to down minimally and being able to take a lot of cost out of those businesses, right? So it's not like those EBITDA numbers are going up because revenue is up year-over-year, just FYI. So no, I don't expect us to do last year's revenue across any of our units, but it's really about can we ultimately get more cash flow out? And the good thing about the casino is that every dollar is cash flow to us.

Got it. And then one last question, if I may, on the capital structure. You mentioned you bought some shares during the quarter. The stock went crazy. Do you have any perspective on the stock market activity other than it's, I would think, a pretty bullish sign that you think you can get this refi done?

I -- we bought those shares. We bought Brigade, the hedge fund that also happens to be our largest debt holder, and they were the second largest equity holder after the family. And we stay in close contact with them. We made that deal with them for a couple of reasons. One, we didn't want a big hunk of that stock hit in the market. And from our perspective, it was really kind of a bet that we're going to make it through this. And the stock was trading below $1 when we did it. And we also did it with one of our, not one of our, with our largest debt holder. So we were kind of in synch with that. And it wasn't a lot of money for the purchase given where the stock was traded. Plus, it also gives us the ability to continue to fuel employee incentives and things of that nature that you need during this period of time. I had no idea that the stock was going to rocket like it did. I originally thought maybe there was a short squeeze, but there wasn't a very big short position. I really think that it was just pure coincidence because you have a large shareholder that sells, and it was just pure coincidence that at the same time, there was a lot of retail interest that started to develop in our company and some other African-American owned companies. A couple of banks, one Broadway Financial, another Carver, Carver Bank at the same time. And I think it was just pure coincidence that happened at the same time. The level of trading that's continued, even though the stock has come down, the level of trading and activity has still been very, very robust. And so this retail trading thing is unbelievable. I saw something on CNBC where a guy was saying that with financial information in the internet, a lot of folks that are trading have just as good information as people who do it for a living at hedge funds. And so that's what I think has happened with us. And I think, certainly, the interest in our audience and social justice has been helpful to that. So yes.

[Operator Instructions] We have no one else queuing up for questions at this time. You may proceed.

Well, thank you, Operator, and thank you, everybody, for tuning in. Again, as always, we are available off-line for any questions. Thank you very much.

Ladies and gentlemen, that will conclude your conference for today. Thank you for your participation and for using AT&T for the teleconference. You may now disconnect.