Good morning, and welcome to Beasley Broadcast Group's Third Quarter 2020 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 the 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 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 the 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 would like to turn the conference over to your host, Beasley Broadcast Group's CEO, Caroline Beasley. Please go ahead.

Thank you, and good morning, everyone, and thank you for joining us on election day to review our third quarter operating results. We hope, if you haven't already, that everyone gets out to vote. Marie Tedesco, our CFO, is with me this morning. So before diving into our third quarter results, I wanted to acknowledge the ongoing impact of the pandemic on our employees, customers in the communities we serve. The health and safety of our employees remain our top priority, and our company has implemented a variety of internal safety measures following federal state and local guidelines. As we'll discuss in a moment, we adapted quickly to the changing environment, and we are seeing promising trends in our various operations since the April lows. We continue to closely monitor the impact of the pandemic on our business in any potential closings. While cases are arising, we're highly focused on our back to work safely strategy. I've been visiting our markets to let our team know that unless they are in a risk group or have pre-existing conditions, our best future will be realized if we can return to our offices and studios. We believe that creative collaboration takes place in our offices and that our teams can more effectively work together in person rather than through Zoom and Slack, all while remaining safe. Our business is creative at its core, and our creativity extends from our on-air talent to our teams bringing innovation to areas such as sales or digital. We have plans in place, which have been developed with the most up-to-date guidelines in line and hope that like other businesses across the U.S., we get more people back to their normal lives sooner rather than later. It is through a return to our new normal that we…

Thank you, Caroline. Let me start with a review of third quarter results, followed by an overview of our balance sheet. Third quarter net revenues decreased 24.9% or $16.5 million to $49.6 million, inclusive of $495,000 from our esport teams, the Outlaws and the Renegade. We generated $3 million in net political revenue, and that compares to $300,000 in the prior year. Breaking down the revenue for the quarter, July was down 32% year-over-year; August was down 26%; and in September, we saw a 19% decrease year-over-year. Station operating expenses for the quarter decreased 15.9% to $41.6 million, resulting in third quarter SOI of $8.1 million. The 2020 third quarter station operating expenses include $1.3 million of expenses related to our esport teams that we did not have in 2019. Also, a $236,000 in expenses year-over-year from the September 2019 WDMK acquisition and $1.1 million of added expenses related to our digital growth initiative, which was recorded under corporate expenses during third quarter 2019 but are now allocated to our stations. So as you can see in our continued pandemic response, we have been diligently reducing our operating expenses, including corporate initiative expense cuts of $23 million through the end of 2020, in addition to voluntary market cuts and savings in first and second quarter of $12 million to $10 million. Now looking at our revenue categories for third quarter on an actual basis during this as impacted period. Consumer services remained our largest revenue category at 27% of our revenue, and we had a 21.9% year-over-year decrease in this category for the quarter. Our second largest category in third quarter was retail, which represents around 16% of our revenue, and the retail category declined 25.5%. Auto moved into our third spot with revenues down almost 34%. Auto was around…

Okay. Thank you, Marie. So to provide further color on third quarter revenue. Spot revenue, including political, decreased 28%, with local down 34% and national down 11%. We also continue to see our smaller markets being less impacted by COVID, and this is partly due to their focus on local direct business, and then, of course, slower reopenings in our larger markets. Digital, as I mentioned earlier, was a bright spot for the quarter, increasing by 1.8%, and it has increased 8.7% on a year-to-date basis. Esports continues to be a growing and popular facet of our company, given the sports COVID-proof online play format, and our offerings have enormous appeal to the millennial and Gen Z demo who are obsessed with gaming. We'll have more to come about esports next quarter. Moving on to the fourth quarter, we ended up in the high single digits as far as October goes and despite minimal political, November has improved as well and is pacing down in the low double digits. As COVID cases increase, we remain cautiously optimistic about the remainder of fourth quarter and heading into 2021. So to recap, our 24.9% decline in revenue is a significant improvement from the 54% decline in second quarter, and coupled with the operating expense reduction of plus to $8 million allowed us to positive SOI and EBITDA for the quarter. Looking ahead to fourth quarter and into 2021, our focus will include growing our cash flow and maintaining a strong balance sheet with liquidity at the current level or higher. While we aren't under a leverage covenant until third quarter of '21, reducing our leverage is a priority, and we are working towards returning to our pre COVID levels when net leverage was in the mid 4x and eventually land at our goal of 4x or below. With our continued focus on the highest quality local content, our station's ratings performance remains the best in the industry. In fact, according to Nielsen, our Q3 PPM ratings cluster roll up tier was the highest of any other major broadcaster in the industry. At the moment, we have one or more top 3 stations in 11 of our 13 rated markets, with the top advertising demographic of persons 25 to 54. So finally, I would like to acknowledge our team numbers across the company for the sacrifices that they have made and everything that they are doing to help us address and overcome the challenges of the last 7 months. And on behalf of all of our employees, we thank you very much for tuning in to our call. So Marie, I'm going to hand it over to you.

Great. Thanks, Caroline. So we always ask for questions, and we did receive one question about our pacing. And because of that, we have updated our current pacings as of this morning. And Caroline, would you like to review those?

Yes. Just -- so as I said earlier, we did end October up in the high single digits, and November has improved as well and is pacing down in the low double digits.

Great. Thank you. That was all the questions.

Okay. Well, thank you very much. If you have any questions, please feel free to reach out to Marie or myself, and we appreciate your time this morning.

Thank you very much. Ladies and gentlemen, this now concludes today's conference. You may disconnect your phone lines, and have a great rest of the week. Thank you.