Good morning, and welcome to Beasley Broadcast Group's Third Quarter 2021 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 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 on 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 would like to turn the conference over to your host, Beasley Broadcast Group's CEO, Caroline Beasley. Please go ahead.

Thank you, David, and good morning, everybody. Thank you for joining us to review our third quarter results. Marie Tedesco, our CFO, is with me this morning. So I'm pleased to report strong third quarter results where we again generated revenue increases both quarter-over-quarter and year-over-year. We delivered overall third quarter revenue growth of 26.7% with over-the-year local spot revenue increasing 31% and national spot revenue increasing 23%. While the Delta variant impacted some markets mid-quarter, we continue to see an overall rebound from the pandemic, including improvements in core radio advertising as well as from our digital platform. Looking at digital revenue and our steady upward trend of recent quarters, this revenue stream grew 67% year-over-year and accounted for 13.2% of total third quarter revenue and 12.9% on a year-to-date basis. This compares with digital revenue accounting for 10% of 2020 and 6% of 2019, 3rd quarter revenue. It's important to note that ex-political, total third quarter revenue would have grown 34%. We drove total revenue increases across all, but 1 of our markets, with Detroit, Las Vegas and Wilmington delivering year-over-year increases above 40%. Furthermore, when comparing third quarter 2021 with third quarter 2019, our total revenue declined approximately 4.8%. So we're closing that gap even further as we go through the year. Also to note, we returned back to the office over a year ago. We've seen the benefits of this, especially when looking at our performance compared with the local markets. With respect to our markets and emerging ad categories, we have broad-based strength, so let me touch quickly on sports betting, as this revenue stream has and continues to grow into a very meaningful category. It was our second largest category in Q3, growing 228% year-over-year, and it represented $4.3 million or 7.2% of our…

Thanks, Caroline. And as I said, I will begin with a review of the financial results followed by a balance sheet update. Third quarter net revenue increased 26.7% or $13.3 million to $62.9 million, which includes approximately $500,000 from our esport operations. Core ad spends were solid as we generated just $225,000 in net political revenue during the quarter compared to $3 million net political in the prior year third quarter. Breaking down the quarterly revenue, Audio increased 28.6% or $12 million, and Digital rose 67% or $3.3 million, with Digital now representing 13.2% of total revenue. Looking closer at the quarter, July station revenues was up 39% or $5.2 million compared to prior year. August was up 29% or $4.8 million and September was up 16% or $3.2 million year-over-year. As Caroline noted, excluding political, our third quarter revenue growth was 34%. Station operating expenses for the quarter increased $9.6 million or 23.1% to $51.2 million, resulting in third quarter 2021 SOI of $11.7 million, a 45% increase compared to $8.1 million in the year ago period. Our third quarter expense increased of $9.6 million is inclusive of the higher ad revenue-related cost of sales, which inclusive of our digital direct agency, represents approximately $6.3 million of the increase or 66%. Other factors are the institution of the 2020 wages to pre-pandemic levels, including bringing back certain furloughed employees, which combined represents around $1.5 million. And we increased our concerts and marketing expenses year-over-year by approximately $1.5 million. Moving to our revenue categories. We saw upward improvement across the board. Consumer Services remained our largest revenue category at 28.2% of our total revenue and Consumer Services increased 36% compared to third quarter 2020. Entertainment jumped to a #2 category, much in part due to the growing sports-betting revenue and…

Thank you, Marie. So our priority and strategic focus is creating top quality own air and digital content and growing our audience, which in turn drives revenue growth. In the summer Nielsen Audio ratings period, our largest PPM market saw a 4% share increase year-over-year with the top advertising demographic of adults 25-54. And we continue to maintain dominant positions in our largest markets of Boston, Detroit and Philadelphia, with the #1 station in all 3 metros. Plus according to Nielsen, we had the highest average PPM cluster share of any major radio broadcaster with adults 25-54. And with that I am extremely proud as it is a direct outcome of our culture and focus on providing consumers with the best audio entertainment, news and information, and it's representative of the phenomenal team we have in place. Now moving to our digital platform. The investments we've made on our content side are clearly value creating and resulted in Q3 being a record high quarter for impressions on our website platform, up 13% year-over-year with well over 53 million impressions for the quarter. Additionally, our streaming audience was up 17% year-over-year. Moving on to esport. Let me provide a quick update on the Houston Outlaws as we just wrapped up to #4 in the final year playing Overwatch 1. Season 5 is expected to start sometime in April or May of 2022, coordinated with Activision Blizzard's release of the Overwatch 2. And this is the long awaited revamp game that is expected to take the video gaming industry by storm. We are actively signing players for next season, and we're planning to roster a mixed lineup of Eastern and Western players. And as a follow-up from the last call on Rocket League and after a summer wide search to find and…

This concludes today's call. Thank you for your participation. You may now disconnect.