Good morning, and welcome to Townsquare's Second Quarter 2018 Conference Call. [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 second 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 that 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. We are pleased to announce another strong quarter at Townsquare. For the second quarter of 2018, our net revenue and adjusted EBITDA results exceeded the guidance that we had previously issued. Net revenue increased 1.9% over the prior year and adjusted EBITDA increased 1.4%. For the six months ended on June 30, 2018, net revenue increased 2.6% and adjusted EBITDA increased 6.6% compared to the first six months of 2017. These strong results in our growth so far this year are the product of the four-point plan that we first described you at the end of 2017 and against which we continue to measure our progress. First, its about local first, investing in content and sales execution within our local market footprint in order to drive stable results from our foundational broadcast product offerings. Our second objective was to reduce complexity and the volatility in our business. To address this, we reviewed and reorganized our live events in national digital businesses both of which had demonstrated strong profit growth so far this year above our expectations and in May we divested North American Midway Entertainment which as you know we have previously identified as non-core to our local first strategy. Third we wanted to allocate resources to drive some of our most promising growth products Townsquare Interactive and Townsquare Ignite as Bill will discuss shortly our investments in these areas continue to pay off and are a big part of the growth that you see in our financial results. Lastly, we wanted to make sure we continue to prioritize the product innovation and experimentation that has been a hallmark of Townsquare since our inception in 2010. Bill will provide some details on results from our first party…

Thanks Dhruv. As Dhruv noted we are pleased to report strong second quarter results that exceeded the guidance that we had previously issued. Our second quarter net revenue growth of approximately 2% was driven primarily by two key factors. First the continued stability of our broadcast products and second the strong growth of our digital marketing solutions. To provide you with information to better analyze our revenue results we have provided detail in the footnotes to our quarterly report breaking out our revenue composition into the following categories, advertising which is inclusive of broadcast and local digital advertising products. Our marketing solutions business Townsquare Interactive and live events. We encourage you to review this detail to better understand our revenue trends and in particular gain more insight into what is driving the strong performance of our company. As part of the local first initiative that we outlined on previous calls we have been recruiting and attracting strong talent to the local sales force in our markets. And as a result, we are currently at our highest sales staffing levels since September of 2016 nearly two years ago. We believe we are able to correlate strong local talent and a larger sales force with a noticeably increased in new business generation which we have observed over the first six months of this year. Similarly our content investment initiatives are also producing strong results which continue to manifest in our ratings. Midway through our spring ratings season we are continuing our positive momentum. In Albany we have three of the top five stations in the market including the markets number one station WGNA. After investing in audience research and marketing Monmouth Ocean, New Jersey we had our best ratings book in the past few years led by the Hot AC Powerhouse WJLK.…

Thank you, Bill, and good morning everyone. As a reminder, in the fourth quarter of 2017, and in connection with the strategic review that we previously discussed, we discontinued the operation of certain portions of our business. And those results were shown as discontinued operations in our year end and first quarter financial statements. Following the divestitures of NAME in Mountain Jam in the second quarter, their results have also been reclassified into discontinued operations for the current and historical periods. In the second quarter of 2018, we had a net loss from discontinued operations of $8.4 million, as compared to a net loss of $2.2 million in the second quarter of 2017. In the year-to-date period, we had net loss from discontinued operations of $37.8 million as compared to a net loss of $5.9 million in the six months ended June 30, 2017. As a reminder, the year-to-date loss from discontinued operations was primarily due to the $38 million noncash impairment charge related to NAME that was incurred in the first quarter of this year. All of the financial results we will discuss today are related to continuing operations. In addition, as a result of the divestitures of NAME and the completion of our strategic review of our entertainment segment, we consolidated the financial reporting for our Company into one single segment. For the quarter ended June 30, 2018, net revenue increased 1.9% or $2.3 million to $119.6 million as compared to the second quarter of 2017. This exceeded our previously issued guidance of $114 million to $118 million. In the year-to-date period, net revenue increased $5.3 million or 2.6% as compared to the prior year period. Excluding live events net revenue which was intentionally budgeted down in 2018, net revenue increased 5.0% or $4.6 million in the second…

Thanks Stuart, and thank you to everyone who dialed in this morning. In summary, we’re pleased with our results this quarter and feel good about continuing our momentum into the back half 2018. We have the right plan, we’ve executed well and we look forward to the opportunity to continue to prove that over the next several quarters. We welcome the opportunity to discuss Townsquare with you directly so please call us anytime with questions or just to check. And with that we’re now happy to open up the call for questions. Operator, will you please open up the lines.

[Operator Instructions] Our first question comes from line of Michael Kupinski with Noble Capital Markets. Please state your question.

I was just wondering if you can just talk a little bit about the Interactive segment, obviously up 17% in revenues. Can you talk a little bit about how many sales people you currently have, maybe the FTEs in the segment that has ability to sales for the Interactive segment? And then can you compare that to last year?

As you noted our revenues up in Townsquare Interactive 17%, we broke that in the queue, so there's a lot more the detail for everyone to see there. Our base is in Charlotte for that division, we have several hundred employees there. From a sales perspective, we have over 100 sellers down in Charlotte, but we also leverage our local sales teams as well which are over 400, and as we noted on the call, a high over the past two years. So, as it relates specific to the dedicated Townsquare Interactive sellers, that's up about 8% year-over-year roughly, if you're looking just at that, but at the same time we're leveraging our existing local market sales force as well for Interactive.

And on the core advertising side, it seems like you're doing better than most of the industry at this point. Can you talk a little bit about the categories and how they performed some of the larger categories and how they performed in the quarter? And what you're seeing getting into the third quarter?

As you noted, we're performing well in the advertising side, we also broke that out in the queue for the first time, which is our broadcasting digital advertising products. Broadcast, overall as we noted on the call is stable and slightly positive year-to-date and our digital is growing quite aggressively in double digits. From a category perspective, positives, our services, which would be IT services, health services, financial services, auto, entertainment, education, real estate, as well as political, as Stu mentioned on the call.

I was just wondering whether local marketing on the core advertising going into the third quarter [indiscernible]?

I would say our pacing's are reflected in the guidance that we've given for Q3. So, as you can see - as you would note from the guidance, slightly up. So we feel good about Q3.

Do you have any thoughts on - and if I recall, iHeart didn't support the initiatives with plenty of restrictions, is that right or am I wrong about that because I think I read a report that they didn't support that, I was just wondering why they may have not?

You have to ask them, they have come out saying that they're not supportive of modifying the ownership caps. From - as I said on the call earlier and as we noted, we think this is a no-brainer, and as a result we're very happy to support the NAB and their proposal, and we're really they took action.

The next question comes from the line of Patrick Sholl with Barrington Research. Please proceed with your question.

I was wondering if you guys could talk a little bit more on the mix of events that you guys have – because obviously - you guys talk about community festivals but maybe there are some of the other ones that you have and I would like to fun run that was a bit challenging last year but maybe just a little bit more info on that.

So, we - as you know have a lot of diversity in our life events offering. The music fest, the multi-day music festivals Taste Of Country Festival, which we noted on this call. WE Fest, which was just nominated for an ATM award as festival of the year, tend to get a lot of the headlines and they are bigger events in terms of revenue, a bigger single events in terms of revenue and cash flow. In addition to that, we continue to operate the ameriCAN Canned Craft Beer Festival series successfully as we have for several years since we created it, now three or four years ago. The Insane Inflatable 5K, which is fun run series that you mentioned, we shrunk from a number of events perspective, but expect to be steady this year from a profit standpoint. And we expect to continue that into 2019, we won't be doing over hundred events like we've done in the past, but we expect to continue with a similar number of events and therefore similar profit contribution going into next year. And then in addition to that, there are the largest category in terms of number of events is all of the local events that we do in partnership with our local radio stations, that's really the bread and butter of our lives and that business in the place that we started. Those events are profitable, are growing, and support the station brands and support our communities. Those are things like the Kalamazoo, Michigan Ribfest, that we just had a couple of weeks ago, the Spirit of Boise Balloon Classic that is coming up in Boise, Idaho. So, we feel - hopefully that gives you a little bit more color, those are recurring businesses, and we feel really good about how our live events business is positioned today.

The next question is from the line of Amy Yong with Macquarie. Please proceed with your question.

Maybe two questions, first one for Bill. Can you talk about adjusted sales mix kind of longer term direct versus programmatic? And I think some of them were larger digital periods have been making some investment on the FX side. Do you feel the need for the same type of investment? And then I guess two, even deleveraging obviously very quickly, any thoughts on tax priorities perhaps a buyback which I believe you once explored. Thanks.

Yes, on the programmatic side from a digital perspective, we spent a lot of time - I think on the last call, the prior call, on Townsquare Ignite which is our digital programmatic offering, which is growing - as I noted on the call, quite nicely year-over-year. We have over 17 orders running currently, and just to compare that to a year ago period was under 1000. So the adoption locally of our programmatic platform is quite well and the revenue and campaigns continue to follow that track. So we do that as quarter what we're offering our clients - again that's integrated with our local sales teams as I referenced earlier, and feeling quite bullish about where that business goes. If you want to find out more about it, and actually has a lot of information at townsquareignite.com around all the products and the solutions that we provide there.

Thank you very much for recognizing our strong cash flow generation. That's something that we're really proud of. Our deleveraging event, I mean our excess cash flows, first going to go to pay our dividends, then we look for accretive investments and then after that we'll look to reduce our debt with our excess free cash flow. We have it in the past and we have not actually contemplated purchasing any buyback of stock.

At this time, I have reached the end of our question-and-answer session. Now, I'd like to turn the call back to Dhruv Prasad for closing remarks.

Great, thank you very much. We appreciate everyone dialing in this morning. We know it's a busy morning for a lot of you. And we look forward to continuing to discuss Townsquare and our progress with you as the year goes on. And we'll talk to you again in a couple of months.

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