Welcome to the Urban One’s 2019 Second Quarter Earnings Call. I’ve been asked to begin this 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 about certain factors, including risks and uncertainties referred to in the 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 August 1, 2019. 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 when 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.urban1.com. A replay of the conference call will be available at noon, Eastern Time, August 1 until August 8 at 11:59 PM. Callers may access the replay by calling 1-800-475-6701, and international participants may dial 320-365-3844. The replay access code is 469279. Access to live audio and a replay of the conference call will be available on Urban One’s corporate website at www.urban1.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 relied upon. 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. Please go ahead.

Thank you, operator, and welcome to our Q2 Results conference call. Also joining Peter and I, today, are Karen Wishart, our Chief Administrative Officer; Chris Henson, who is our General Counsel; and also Jody Drewer, who is the CFO at TV One. Released results, very happy with the quarter, Q2’s results and actually the current momentum into Q3 after a tough Q1 for our Radio business, it’s become a real bright spot in Q2 and also going into Q3 with its current momentum. Particularly happy about the radio industry and how it’s performing, given that it’s not a political year. I think on the last conference call, even though our Q1 radio was not great, I did call out the fact that other radio companies had done much better. And that actually was exciting in a positive data point for man and now our business is also catching up and moving in the right direction. So very excited about that. Our Digital division has been a big first half outperformance positive surprise. We lost about $3 million through the first six months of last year and through the first six months of this year, we’ve turned $900,000 profit. So that team up in New York is doing a great job of rebounding. As it relates to MGM, their quarter softer than expected, but not a disaster there. April was plus 5.3%; and gaming revenue, in May, was minus 5%; June, minus 4%. Those were the first two negative year-over-year numbers that the property has seen, but that – yes, that sums or averages out to about down minus 1%. So in my conversations, I think the EBITDA there is still expected to grow. There is a lot of puts and takes in that business. We get paid our distribution on…

Thank you, Alfred. So net revenue was up 5.5% for the quarter ended June 30, 2019, at approximately $121.6 million. And as usual, breakout revenue by source can be found on Page 5 of the press release and breakout by segment can be found on Page 7. The Radio segment net revenue was up 6.2% in the second quarter. National advertising sales was up 6.6%, while local ad sales was down 1.6%. Radio markets according to Miller Kaplan, the markets we operate in were up by around 2.4%, and we performed well with digital and event revenues as well. Radio stations are currently pacing up high single digits in the third quarter with July finishing up in the mid-single digits. And our six biggest clusters are all pacing up the third quarter. Net revenue for Reach Media was up by 14.6% in the second quarter driven by two successful events. Higher demand and better inventory management. The Tom Joyner Fantastic Voyage event revenue was up 12% over last year. And the Tom Joyner One More Time multi-market event added approximately $700,000 of new revenue to the quarter. Adjusted EBITDA reach was up by approximately $1.4 million year-over-year. Net revenues for our digital segment increased by 17% in Q2 driven by higher direct sales at Interactive One Digital. Adjusted EBITDA from the Digital segment increased by approximately $3.2 million driven by realigned digital sales strategy and ongoing cost control measures. We recognized approximately $46.4 million of revenue from our Cable Television segment during the quarter, slight decrease of 0.8%. Cable TV advertising was up 9.4%, including approximately $500,000 for the new CLEO network, $500,000 for the new D.L. Hughley nightly talk program. We had a 1% increase in net CPM and about a 12% increase at the DR rate. Cable TV…

Thank you, Peter. Operator, we can go to the lines for the questions.

[Operator Instructions] And we will begin with the line of Aaron Watts with Deutsche Bank. Please go ahead.

Hi, guys. Thanks for taking the question. I’ll start on the radio side. Looking at the kind of performance in the second quarter, and you’re pacing for the third quarter, can you talk a little bit about – more about kind of what’s driving the growth? Is it – I know last year, the second quarter wasn’t particularly strong. Is it more a reflection of that low bar? Or are you really seeing kind of incremental advertising coming into the space? Or is it kind of market share gains that you’re taking from one of your peers in each market?

I think that we’ve had some definite strong ratings performances in Atlanta, our Urban HD there or Washington, D.C., our Urban AC WMMJ, here is the number one music station and so that’s coming through. What’s also happening is that Atlanta, even though we had strong ratings performance last year, that market for whatever reason and everybody always asked me why. I can never explain it. It was just off horrifically. I mean it was down like double digits through the first six months of the year, and I remember calling that out. And it improved through the back half of last year in Q3 and then better in Q4. But I still think it finished down like 8% or something like that. This year, Atlanta, a totally different story. It’s – the market is rebounded. We’ve got strong ratings. And so we’re seeing a big bump there. Washington, as a market, is doing better. It’s not doing what Atlanta is doing. I just got those numbers Washington here today. Yes, Washington is up 5% year-to-date. Atlanta is up 7.2%. So we got big ratings in big markets there. Houston is a market, has stable – continues to stabilize. That market had been soft. We’ve got a big position there as well, and we’re doing decent in a number of our other big markets. We’re getting hurt in some places, but fortunately, they’re smaller markets like in the Ohios, Columbus, Cincinnati. Philadelphia, we’ve been getting ratings traction with the new radio station that we launched there called Classics. It hasn’t shown up in the revenues yet, but our ratings have been improving. We – David Kantor who runs the radio on the syndicated group. I think it was over a year ago and put in a new sales structure where…

No. That’s really helpful context. And I would ask one kind of tack on to that. Just taking a wide brush and reading between the lines what you just said, it sounds like you have the strong National advertising coming in, particularly in those couple of markets you just cited, with local is still tailing off a little bit. And I guess is there any kind of hope from what you’re saying, maybe in your smaller markets that local can catch up a little bit? Or it’s still to be determined?

You know what, I think we take an approach from what can we do to improve our ratings, what can we do from an M&A perspective, what can we do from an M&A perspective, what can we do to develop our existing signals. We got a couple of engineering projects there that are in the works that are going to improve some of our signals, which we think is going to then improve the performance of those radio stations in those markets. And so we’re constantly looking about how do we develop our positions and not just focused on whether the market is going to be up or down. So yes, I do think that there are some places where we’ve got hope and upside, I think that there is – we’ve done some things in Indianapolis that have not come to bear revenue fruit yet, but I think it put us in a better position from a portfolio – from that portfolio standpoint. We’ve got some things going on with spectrum development in Houston and in Washington. And so when I first started in the radio business, we used to buy stick radio stations and go out and put new formats, so on – an improvement. We go and buy really existing businesses that were doing well. We always did turnarounds. And we really kind of continue to have that mindset, we’ll look to do that. Because if you have that skill set where you can take market share, improve ratings, then even in a flat or down market, you can create value. And so that’s kind of how we look at it, and that’s what’s been happening.

Okay. That makes a lot of sense. If I could ask one more, and I appreciate the time. A little bigger picture on this one. You talked about your desire to get the leverage down. You’re making progress there. How do you think about your kind of optimizing your portfolio of radio stations going forward? And how that could help in that deleveraging effort? And is there any potential on the other side of the coin that you could see filling in additional radio stations as you move forward as well? I guess, thinking about optimization portfolio.

Yes. No, I think portfolio optimization is key, and the answer is yes to that. One of the reasons we sold out Detroit was because we didn’t think that we were going to be able to, in the near term, develop a competitive position that would make that a very profitable market for us. And so we made the decision to sell there, give ourselves some dry powder to try to get bigger in other places. We – if you’ve noticed – if you follow the company’s history, we’ve always been about portfolio management. Before the downturn came when we felt like we had too much leverage, we sold a number of radio stations, including our Los Angeles Radio station. And we sold out of Louisville and we sold out of Minneapolis, and we sold out of Dayton, Ohio. And quite frankly, if we hadn’t done that, it would have – we would have been in a really bad way. We then built up in some other places. Quite frankly, I think the ability to optimize your portfolio in the Radio business is whether it’s through these little things that we’re doing now, it’s blocking and tackling, or if you get an opportunity with dereg to do something much more comprehensive and scale driven. That’s how we’re going to – that’s how this industry is going to continue to delever and become more profitable. I think that’s key. And not everybody knows how to do that. Not everybody can sort of see the chess pieces on the board and figure out how to create a winning strategy. And the other problem is that you need – generally, need somebody on the other end of that. You need a buyer if you want to sell out of a market, you’re not doing well, and you need a seller or a swapper in a market that you’d like to get bigger in. And historically though, the folks run radio companies haven’t really done a lot of that, but that’s what’s going to be necessary. And I think that’s why a lot of guys – companies want dereg and – but that’s optimism in my viewpoint. I think that we are uniquely positioned to be able to participate in that in a big way.

Great. I appreciate all the thoughts, Alfred. Thank you.

And next, we will go to the line of Michael Kupinski with NOBLE Capital Markets. Please go ahead.

Thank you. And most of my questions have already been answered, but Alfred, I was just wondering if you can talk a little bit regarding the local advertising. Was there any particular ad category that’s showing particular weakness? I know auto has been a topic that we all have been focusing on. And is that still accounting for about 15% to 18% of your total ads at this point on radio? Can you just give us a little bit more color on the ad categories?

Peter?

Yes. Yes. Let me just follow...

I don’t think...

No for us, it’s been a little less. I mean I’m looking at Q2. We have the biggest sector growth we had within retail, which was up big double digits. Obviously, political was down. Auto was actually up 5% for us for Q2. So we’re not seeing our experience in a percentage of revenue. It is roughly just over 10%. Probably, yes, always go over 10% and 11%.

Got you. And then on the National side, was it similar situation in terms of the ad categories?

No. One of the categories is the – that come is a jewel, the bathing company. They’ve come to the medium and that’s been good. And so I trying to think of the national, there’s been – in telecom, these mergers – the telecom pipe has been good because we’ve been getting a lot of these key mobile takeovers that come in and buy out a whole day part. The merger, we thought was going to slow that up a bit, but ironically enough, it did slow it up a bit, but some of that stuff still continue. And it’s going to be interesting to see what happens with the new competitors is going to come into the market with the dish. So hopefully, telecom continues to be – and the new bigger T-Mobile Sprint, do they start to advertise at the level that Verizon and AT&T do because they’re – those guys are much bigger advertisers. So hopefully, there’ll still be some catalyst for growth – ad growth in that category.

And Mike, let me just clarify the sector report I’m looking at is a blend of local and national. I didn’t want to mislead you on that.

Okay. Got you. I appreciate that. And you’re not seeing any other categories developed like some of the OTT players and that sort of thing. I would have thought that it would have been advertising on radio, a little bit more like Sling and so forth.

I know the Sling guys pretty well. They haven’t had – they don’t believe in radio. They haven’t had success there. I keep trying to telling that Urban Radio is different than regular radio. But I – so their – but as long as I’ve known, the folks at Dish and Sling, they haven’t been a big radio user. But Hollywood and the TV networks, big users of radio and continue to do that. Actually, it’s a good category for us at TV One and Digital and Radio.

Got you. Okay, that’s all I have. Thank you.

[Operator Instructions] There are no further questions.

Thank you very much, everyone, and operator. As you know, we are available offline for additional questions, and we’ll talk to you next quarter.

Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation. You may now disconnect.