Urban One(US:UONE)2022-03-03 19:50Financial Data and Key Metrics Changes - The company reported a consolidated adjusted EBITDA of $32.5 million for Q4 2021, down from $41.7 million in Q4 2020, but up from $27.5 million in Q4 2019 [8] - Full-year adjusted EBITDA was $150.2 million compared to $138 million in 2020 and $133.5 million in 2019, exceeding the full-year adjusted EBITDA guidance for 2021 [8][18] - Net revenue for Q4 2021 was approximately $131 million, up 15.3% year-over-year [8] Business Line Data and Key Metrics Changes - The Radio segment's net revenue decreased by 11.6% year-over-year in Q4 2021 due to a decline in political advertising revenue, with political revenue down $10 million in the Radio segment [9] - Excluding political advertising, net revenue for the Radio segment increased by 15.5%, with local ad sales up 11% and national ad sales up 12% [9] - The Digital segment's revenues increased by $4.7 million in Q4 2021, driven by strong demand for black-owned and targeted brands [10] Market Data and Key Metrics Changes - The automotive advertising category was down 21.8% due to supply chain challenges, while the entertainment category saw the largest increase, up 166% year-over-year [9] - Government and public sector advertising remained the largest category, driven by government-funded pandemic outreach initiatives [9] Company Strategy and Development Direction - The company is focusing on the growing demand for minority-targeted audiences, with management noting a paradigm shift in how advertisers view these demographics [4] - The company plans to be opportunistic regarding share repurchases and expects to authorize a stock buyback program as part of its capital allocation strategy [18] - Management is exploring potential station swaps in the radio business to achieve economies of scale, although no definitive deals are currently in place [34] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the continued demand for their platforms and audiences, expecting this trend to persist for the foreseeable future [4] - The company anticipates full-year 2022 adjusted EBITDA to be between $145 million to $150 million, with potential upside if political and digital revenues exceed expectations [18] - Management acknowledged the uncertainty in the geopolitical environment and its potential impact on the economy, but emphasized the company's diversified business model as a protective factor [54][55] Other Important Information - The company recorded approximately $2 million of cost method income from its investment in the MGM National Harbor property for the quarter, with the put option currently valued at around $100 million [12] - Total gross debt was reported at $825 million, with a net leverage ratio of 4.48 times based on the last twelve months reported adjusted EBITDA [17] Q&A Session Summary Question: What is the current debt balance? - The gross debt is $825 million, with a cash balance of approximately $137 million [27] Question: What is the timeline for the casino project development? - The company expects to know within 30 days whether a referendum can be run in 2022 or if it will be postponed to 2023 [30] Question: What is the likelihood of Petersburg getting the casino? - Management indicated that it is uncertain and emphasized the political complexities involved [32] Question: What is the strategy regarding radio station acquisitions? - The company is focused on opportunities that allow for end-market scale and is currently analyzing several options [34] Question: How does the company view its leverage targets? - Management aims to keep the leverage ratio below four and is open to strategic transactions that may temporarily increase it [63]