Thank you for standing by and welcome to Urban One’s 2018 First Quarter Earnings Conference Call. I’ve been asked to begin the call with the following Safe Harbor statement. During this conference call, Urban One may share with you certain projections or forward-looking statements regarding future events or its future performance. The Company cautions you that certain factors, including risks and uncertainties referred to in the 10-Ks, 10-Qs and other reports periodically files at 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 2, 2018. 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. Certain 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. An audio replay of the conference will also be available on Urban One corporate website at www.urban1.com under the Investor Relations page -- pardon me, the Investor Relations section of the webpage. 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 D. Thompson, the Company’s Chief Financial Officer. Mr. Liggins?

Thank you very much, operator, and welcome to our first quarter results conference call. As you’ve seen from the press release, we got a very good news in terms of our radio performance in Q1. Even in a tough market, we out performed, which is something we haven’t seen in a bit of time. We’ve been working on the turnaround. It feels like we’ve kind of lapsed a number of the competitive issues that we have some really proud of the radio management team in order to execute on that performance. We also have made an asset sale in the radio business of one of our Detroit radio stations which we feel really good about as well, getting $12.7 million in for the station. And the key to that being a good deal for the Company is that we’re going to actually take the intellectual property. It’s one of our inspirational stations, and we’re going to move it to one of our existing translators plus three other translators that we are picking up from the buyer EMF. So, we are planning to preserve a good deal of that business and the multiple on that sale somewhere north of 20 times when we look at what we expect to retain. So, just part of our deleveraging plan to continue to march towards getting down to the low 6s by the end of the year. And we’re continuing to look for deleveraging dispositions where they make sense or deleveraging acquisitions where they make sense. TV One continued to have some ratings challenges. But, we feel like they are bottoming out in Q2. So, we’ll talk a little bit about that. Also MGM is doing great. We’ll talk some more about that. I’m going to let Peter jump into the details of the numbers and will circle back and provide some more color.

Thank you, Alfred. Net revenue was down 1.6% for the quarter ended March 31, 2018 at approximately $99.6 million. Breakout of revenue by source can be found on page five of the press release and a breakout by segment can be found on page seven. The radio segment net revenue was down 0.6% in the first quarter. Cleveland, Richmond, Philadelphia, Dallas, Houston, and Cincinnati clusters posted the most significant net revenue growth for the quarter. Overall, our clusters outperformed their markets by 190 basis points and outperformed the spot markets by 230 basis points. Advertising sales were up in services, entertainment, automotive and government/public sectors while the retail, healthcare, financial, food and beverage, and travel transportation sectors were all down. Telecommunications, our biggest sector was flat. McDonald’s revenue was down approximately $700,000 in the quarter for the radio division, and we’re in dialogue with McDonald’s concern on their advertising plans for the year. Q2, our radio stations are currently facing down mid single-digits, partly driven by lower event revenue. After a weak April, May is pacing significantly better and we believe June pacings will improve as we go through the quarter. Net revenue for Reach Media was down by 14.9% in the first quarter. The decline is related primarily to the Tom Joyner show and the decrease in affiliate audience. General market pricing is down year-to-date and African-American only network budgets are still down. Our expense savings primarily from contractual talent compensation offset the revenue declines allowing Reach Media to post adjusted EBITDA growth in the quarter. Net revenues from our digital segment increased 47.9% in first quarter driven by an increase in direct sales and the integration of the newly acquired Bossip, Hip Hop Wired and Madame Noire brands into our existing portfolio. Revenue growth for the combine digital…

Thanks, Peter. That’s a good jump off point with the asset sale. We continue to be hyper-focused on deleveraging. Discussing our leverage this morning, Peter and I remembered when this company was levered north of 9 times. Now we’re below 7 times. And we are marching towards a goal to be in the low 6s this year. We’re going to use our free cash flow to continue to pay down debt. We, again -- we look for new transactions whether they’re dispositions or acquisitions that can help us with that deleveraging. We are always trolling and looking at stuff. And so, we believe there are some options out there. They will be a combination of singles and doubles that hopefully will add up to be meaningful as opposed to one large transformational acquisition or disposition. And for 2018 from a guidance standpoint, we -- both Peter and I feel comfortable that we can get to -- the Company to $140 million of combined EBITDA, which is where we are comfortable and focused on and signaling to the market about this year’s combined performance. So, that’s a new piece of information that we haven’t put out there before. But, we’re feeling pretty good that we can get there. MGM, as Peter told you is doing exceptionally well. We believe that they will continue to take market share. And that deal will be a very good deal for us at a minimum coming on top of our expectations for it and highly probable that it exceeds our expectation. There will be real value created there that we would be able to do something with in terms of exploring how this asset could helps us with our refi. I think, people will be able to get comfortable that we’re going to get our…

Yes. And just to clarify that, you mean within the course of this year. I mean, there is practice [ph] over time but we would like to accelerate.

Within the course of this year. I’m talking about between now and end of 2018. Correct. Thank you for clarifying that. With that, operator, I’d like to open it up for questions.

Absolutely. [Operator Instructions] We’ll first go to the line of Aaron Watts with Deutsche Bank. Go ahead.

Yes. Thanks for having me on. Few questions, I’ll start with radio. I guess, looking at the slight decrease in revenue on the first quarter for radio broadcasting. You cited a bunch of markets that were up and some that were down. As you look at kind of the differences between those markets, is it competitive differences, more impact from digital, is it share shifts between you and your peers? What’s going on between those markets?

Yes. It’s a good question. And no, it’s not competitive -- we got four big markets that kind of drive the Company’s radio of the segment. And you know what? Two of them, Baltimore and Atlanta are down really big. And nothing has changed from a competitive standpoint in that -- they’re just…

Yes. Again, to clarify, you’re talking about the market being down double-digit.

Exactly.

We’re beating the market, but the market itself is down double-digit.

And I don’t know why. I mean, Atlanta, one could argue that Baltimore has old line East Coast town, used to have manufacturing bays and yes, maybe it’s diversifying or it diversifying but not a growth market. Atlanta, you can’t make that argument. So, I have no idea why that is. I’ve never been able to figure out what drives one market down and another market up at any given time. So, I think right now that’s just kind of -- that’s the effect of our particular mix of markets.

The Miller Kaplan for our markets, Q1 is down 3.2. And the other of our big four markets, Houston as a market was down 1.3. We’ve beaten that market; we were up a couple of points. And Washington was down 2.8%; we were down 2.5% in DC. So that gives you a flavor for the big four markets.

And as I think about moving into 2Q, I know you said down mid single digits, although some of that due to lower event revenue. Are you able to separate out the events and how does the market or your pacings feel excluding those events?

Yes. Again, another good question. I think, at the moment, those events are costing us a couple of points to pacing. And I suspect -- so then, when we just look at the spot business, I suspect we are in line with where the markets are at, judging where Q1 came in. So, if the markets were down three and change in Q1, if they stayed in that zone, we are probably close to that excluding the couple of events that we are talking about.

And Alfred, based on what you are hearing from advertisers, any reason to hope that radio can push towards a flat or even growth story this year? I know, you’ve got a probably a little bit of benefit from political helping that as a tailwind as well?

Yes. I believe that -- look, a recession aside, there has been the talk about are we -- I thing I was watching CNBC, I guess the shape of the yield curve right now some people believe is predicting a coming recession. I don’t know, I’m not an economist, right? But short of a recession coming, I think that radio definitely has a chance to finish flat to up this year. And our goal is to outperform that. The Company has historically outperformed the radio market. The fact of the matter is our underperformance for the last 2.5 years has been largely related to competitive dynamics where we took a competitor in a Houston, we took a competitor in Columbus, we took a competitors in Indianapolis. Those three scenarios cost us $15 million of cash flow.

Let me ask you just one on the TV side of things. You spoke about the subscriber losses, your subscriber count declined. Can you give any more color around that? I know, we heard from some of the MVPDs over the last week or two and it’s echoed that picture. But maybe you can talk a little bit more about that. And maybe also on your strategy, you have to try and offset those sub-count declines whether it’s through getting on over the top services or direct to consumer efforts?

Yes. I mean, look, you echoed it. I mean, all of the operators have been down because they lost more video subs than people had expected. And so, we have seen more churn than we expected. Particularly at charter, the package that we are on churned more than we had thought it was going to. And that’s largely -- that package that was in the old Time Warner systems, and as charter works through their migration. I don’t believe, over the top is an answer for us today because one, it’s a business that won’t have an immediate impact. It’s not like we’ve got -- it’s not like we’ve got sports content or we’re CBS or show time where we put a direct consumer product out there and immediately people see some price value relationship that’s really attractive that makes someone cut the cord and buy CBS all access. So, for us, it would be a direct to consumer package that we would have to go get other content for, then market it and then try to get to some critical mass of subs to make money. And that sounds like a long, money-losing slog that wouldn’t solve our immediate issue. So, how do we mitigate? First of all, we have been mitigating the churn. I mean, our overall --lots of people are down on subs and we’re kind of flattish. But we are focused on opportunities where we can get more subs from people of which we still have some of those opportunities. So, were talking to some of the OTT folks, we’re talking to distributors where we still have upside because we’re not fully distributed. We are looking at opportunities to launch a new service that would be license fee free and because the marketplace is probably not that receptive to paying for more new networks. But because we already have a platform, if we have a concept that fills the void that doesn’t cost operators anything, we think we’ve got significant enough relationships where we could secure the distribution, which would give us another platform to hang off of -- another network to hang off our existing platform and to get more audience and impressions of which to monetize. So, we’re focused more on that kind of opportunity. And also in Cable TV, we continue to look at any sort of JVs from a programming standpoint, combinations. We continue to look at any M&A opportunities that would allow us to create value and be deleveraging. So, no OTT, probably more likely that we launch a second network that license fee free and won’t cost us a lot of money to launch because we already have a platform, and try to get some additional distribution with our existing partners.

And four our next question, we will go to line of Mark Coffman with Ramirez and Company. [Ph]

Good morning, gentlemen. Nice job this quarter and over the past year where you’ve been reducing the leverage in the Company, listening to the stakeholders. I think, it’s good. I have a question about your thoughts and outlook for Reach Media. I know there’s been some changes there personality wise or just exposure. And also, I think as it relates to that, if Tom Joyner’s moving over or has already been on the internet let’s say as opposed to being over the airways radio. Does that change the cash flow that you’re realizing? Does it have any positive impact on digital revenues and negative obviously on radio revenues or does it all flow through Reach Media or is it a combination of three?

Yes. So, Reach had a tough Q1 on ad revenue, but I think as Peter pointed out, they were able to save on expenses and they actually grew EBITDA year-over-year. Reach had a really tough 2017 that EBITDA got cut basically in half from like 9 to 4.5, those kind of numbers. We see that rebounding this year, even with our tough Q1 to probably $7 million plus of EBITDA. Q2 ad revenues significantly -- doing significantly better than Q1. And so, we feel good about Reach’s recovery this year. Tom is already on the internet. We stream his show. There is no plan to move that show to exclusively online. And if we were to do something like that, yes, it would have a dramatic negative impact on the revenue and cash flow for that show, which is why we don’t plan to do it. I know Tom has -- we resigned Tom for another -- what it was two or three years? I don’t remember. And he made an announcement that he was retiring at the same time. That’s Tom’s announcement, maybe he does. The Company -- I think, Tom is still going to be a viable source of good radio entertainment two years from now. Show may not be as big as it was 10 years ago, but he’ still going to have an audience. And I know for one, the company, we’re open to talking about what that future holds. I don’t know what Tom said is because we did the extension. But, I believe that there is going to be sort of life after this next contract. And that’s just me pontificating. He still -- it’s still a robust business for us. It’s just a declining business. But Reach has got Rickey Smiley and DL Hughley and our inspirational shows that are also rounding out that the portfolio. So, we’re pretty diversified there.

Could you -- my next question, if you don’t mind, can you elaborate a little more on some of the parameters or valuations or cash flows from MGM these days, or revenues or whatever the numbers that you could possibly share?

Well, look, they’re a public company, so you can kind of do some -- we know what they’re gaming revenue is, because…

Yes. It’s that 12% -- 13% growth rate continues. Our distribution from it should be north of $6.5 million this year, call it $6.7 million. So, that’s 600 grand more than we got last year. As Alfred said, their analyst report out there talking about their EBITDA, ultimately fully baked, put right, and I say fully baked once with three years out, we’re at 7 times EBITDA and we own six and two thirds percent. So, it’s relatively straightforward to run the math. But, we think that that state as Alfred said, from an equity standpoint is valuable.

It’s probably worth 70 plus million dollars today and it’s probably going to be worth north of $90 million. So, the idea that we make 3 times our money on it is pretty tangible.

We will go to line of Adam Jacobson with Radio & TV Business News. Go ahead.

My question is in regards to your divestment in Detroit. congratulations on that. I’m familiar with the Washington D.C. market coming years. You have a small formatted radio station 4.1. Given the buyer in the Detroit, Educational Media Foundation, those certainly looking to expand into a lot of markets. And I’m wondering, if there’s any further discussions with EMF and any further discussions internally regarding the Praise formatted stations that are in some of the cities like Washington?

No, not at this time. In order for us to decide whether or not to divest something, ultimately the stick value has to be higher than the amount of cash flow its generating times the multiple we’re trading at. And that just happened to be the case in Detroit, given our ability to move that programming over to these translators. So, we are not actually leaving the format. We are staying in the market. That station -- that dynamic would not exist in Washington for Praise; that station in D.C. does exceptionally well and makes a lot of money. It’s probably -- it’s our best performing Praise station with the most revenue on it in our home market. So, it’s worth more to us from the cash flow standpoint than somebody would pay for it at this stage.

We have a question in queue from the line of Michael Kupinski with Noble Capital Markets. Go ahead.

As you know, typically June makes the quarter and I was just wondering what you are seeing in terms of improving trends in the quarter. Any dynamics of categories contributing to the improving trends in that back half? Are you expecting McDonald’s to come back in the quarter?

We had a good meeting with McDonald’s. They had a shift; they went more national, less local. We have voiced our position, our thoughts on the importance of local ratio. We are getting more money at TV One and at digital. I think that they are constantly assessing where they’re at, what they’ve done and how it’s affecting their business. So, I think, we still have a great relationship with them. We will continue to have a great relationship. And I don’t know if -- they are going to be an advertiser. Unfortunately in Q2, they spent 20% of what they did last year -- excuse me in Q1, they spent 20% of what they did last year. Can we improve upon that in local radio? I don’t know yet. But, it was a productive dialogue. But I didn’t get any definitive answers from them.

And some have been saying that auto is coming back, I know it sounded like your auto was pretty good in the first quarter. Auto seems to be coming back for the industry a little bit in the second quarter. Are you seeing those trends as well?

I heard it from one of our regional Vice Presidents who said that they were starting to see a return of auto in Q2 but that’s just one channel check in the company.

Yes. And in Q1, we were up 5% in the auto category. So that does…

Yes. And congratulations on Detroit. I just have a quick question about that. It seems like a unique situation where you’re able to stay in the market. Would the Company consider exiting a large market like that, or only if there was a way to stay in the market? I mean it’s an important…

So, I’m going to make this statement because you got rumors around and it affects your employee base and other kind of stuff. But just officially to go on the record, I mean, we’re not a venture capital fund. So, we’re not just a pure economic animal where we just want to make some money and get out of the media business. We’ve built the media company over 35 plus years for a reason. But, it is a business and we have a leverage profile which needs to come down. So, given the fact that we’re always in the business of creating value, I mean, we don’t do it just because we wanted to be broadcasters. We are in the broadcasting business. So, we do it because we love being broadcasters and serving our community and this audience, but we also want to create value and earn a living at it. We need to always rationalize our portfolio, particularly if you have a goal of having to reduce your leverage for the primary purpose that you can continue to serve your community for another 38 years because we just saw an industry where more than half of it went bankrupt, including the two largest players. And I’m happy that we didn’t end up being in that boat. So, yes, where we have underperforming assets that somebody would deem more valuable, then they would be in our hands that would allow us to continue to reduce our leverage, so we can get to a safe leverage zone where the Company doesn’t have any issues, even in a recessionary environment, we’re open to that. And that’s either a disposition or an acquisition. We don’t rule out the opportunity for us to combine or get larger somewhere where we can create value because…

The next question will come from the line of Juliano Torii with Descartes. Go ahead.

Well, yes, most of my questions have been answered. I just wanted to see if you could clarify a bit more of the structure of the Detroit transaction. Basically, what’s stays and what leaves the Company, and how are you going to continue to make money from that market if you could explain that? And then, maybe elaborate on the previous questions, which markets do you think that this could potentially be a solution as well?

I don’t understand the last. But Detroit station, WPZR is what’s being sold and it’s a [indiscernible] radio station, inspirational is another name for the format, that’s doing a couple of million bucks of revenue right now and contributes about a $1 million of cash flow. And we’re selling that particular station and we’re taking the format, the intellectual property, and we’re moving it to essentially four smaller radio stations that will all -- that will cover different parts of the city. Three, we’re picking up from EMF and one that we already own. And we believe that we’ll preserve at least half of that revenue and continue to serve that audience and do a respectable amount of cash flow, probably half the cash flow.

Yes. So, we think it costs us about $0.5 million of adjusted EBITDA by making the switch from the one big signal to the four smaller signals. Obviously we have to prove that out but that’s how we create the value based on our research.

And it’s not just research, we actually have experience of doing this format on the smaller signals and translators in smaller markets. And we know what kind of revenue we are doing on those. So, we have empirical real world experience in what this particular configuration might look like. And we don’t have any current plans to do that anywhere else with that. This was a particular situation.

So, basically, you are not selling out of the market, you are not consolidating anything, right, because they are not selling -- you are not completely, [indiscernible]?

No.

Okay. That makes. I’m just curious to understand why do you pay such a high multiple considering that you should be competing with them, what changed there?

I’m sorry. Say that again?

[Multiple speakers]

They have their own business model. They are a Christian broadcaster that operates a -- they operate multiple formats, two formats but their primary format is central format called K-Love that they broadcast out of California. They are not really in the local radio business. It’s a national business model where they are just looking to get as much audience as possible. And I think they derive -- they are non-profit. They derive their revenues from donations. They don’t sale ads, to my knowledge. And they’ve got some internal formula as to how much population they reach and what the expected -- particular the expected income from those donations are. I’m not privy to it. They decide what a station is worth to them. They actually have small -- their distributions in Detroit is the translators currently. So, they’re looking to have a wider reach and we are looking for a full power radio station. We have actually been talking to them for over two years about it and just we ultimately decided to move forward with the transaction in this manner. So, other than that, I can’t tell.

They essentially don’t value it on a cash flow multiple. And our cash flow is our cash flow, it’s not relevant to them. So that’s why the deal works. Right? It works for us and we get to preserve the format. And they ascribe the value to the station that is worth for them. But their metrics are probably different to our metrics.

We have a question in queue form the line of Robert Claiborne with Insight Investment. Go ahead please.

I’m sorry. I jumped on a little. So, maybe if you have already addressed this on Detroit sale. Is this all cash?

Yes. Sorry.

Sorry. No, it’s $12.7 million in total of which approximately $12.2 million is cash and approximately $0.5 million is the value of the three translators that have been exchanged.

And then, the other question I had is, I don’t know if it’s too early but if you have any color or thoughts on how the political advertising outlook is shaping up at this point?

Too early, there is probably some color, because I’m sure there is some races that have happened regional but we weren’t prepared to -- it’s not a big number, so we weren’t prepared to really have that.

In terms of where we’re at so far, I mean agree to what you said, but as a rough number we are expecting, call it 4.5 millionish of political this year.

Of which, most of that is going to come in Q4.

And I think continuing to focus on deleveraging and buying back the bonds with free cash flow, it makes a lot of sense to continue to delevering, get your multiple down?

Yes. That’s what we’re doing.

[Operator Instructions] We’ll go to the line of Ben Brogadir with Odeon. [Ph]

Just kind of a little bit of housekeeping issue with respect to your debt docs. Is there any limitation in terms of how many of the subordinated bonds you can buy back in the open market? And you guys have not drawn ABL. Is there a potential for you guys to use that facility to further fund bond buybacks?

Yes. They’re permitted investments. So, there is no limitation on how many of those we can buy back. But, there is a governor because our tests are net leverage. So, to the extent that you take cash and buy back, the junior debt, you are going to tighten your ratio on the 5.85 time tests. So, that’s really the governor. So, you can buy back as many as you like provided in your incompliance with your 5.85 times net senior leverage tests. And obviously, we don’t want to get to tight on that because you would hate to get go out in the downturn. And so, it’s really a balancing act for us. It’s not so much about taking all of our cash and buying back those bonds. It’s about just balancing how much cash you want on hand and how much debt you want to retire.

And then, just to be clear, we should probably expect further open market purchases, those 20s as kind of the year progresses, is that fair?

Yes..

Yes. I think so. Yes. We want to take that balance down. It’s our most expensive capital with the exception of that small Comcast now. And we got a refi coming due on that in a not too distant future. So, it make sense to take that down.

We have no further questions in queue at this time.

All right. Thank you everybody. Again, as usual, we’re available offline. Talk to you next quarter.

And ladies and gentlemen, that will conclude your conference call for today. Thank you for your participation and for using AT&T’s Executive Teleconference Service. You may now disconnect.