Urban One(US:UONE)2020-08-02 22:56Financial Data and Key Metrics Changes - Net revenue decreased by 37.5% in Q2 2020, totaling approximately $76 million [6] - Consolidated adjusted EBITDA fell by 38.1% year-over-year to $24.5 million [15] - Net income was approximately $1.4 million or $0.03 per share, down from $6.6 million or $0.15 per share in Q2 2019 [18] - Operating expenses decreased by 37.6% to approximately $53 million [11] Business Line Data and Key Metrics Changes - Radio segment net revenue declined by 58.4%, with national ad sales down 49.1% and local advertising sales down 61.2% [7] - Reach Media's net revenue fell by 66.6%, largely due to the postponement of the Tom Joyner Fantastic Voyage cruise [8] - Digital segment net revenues decreased by 20.4% [9] - Cable television segment revenue was approximately $43.8 million, down 5.7% [9] Market Data and Key Metrics Changes - The worst affected advertising categories included entertainment (down 90%), food and beverage (down 83%), and travel and transportation (down 72%) [7] - Cable subscribers decreased from 51.8 million at the end of Q1 to 51.4 million at the end of Q2 [10] Company Strategy and Development Direction - The company is focusing on local radio recovery as a key driver for future performance [21] - TV One is expected to achieve approximately $90 million in EBITDA for 2020, up from $82-83 million in 2019 [23] - The company is engaging in deep conversations with political campaigns to leverage advertising opportunities [22] Management's Comments on Operating Environment and Future Outlook - Management noted that Q2 was the bottom of the downturn, with sequential improvement expected in Q3 [5] - There is cautious optimism regarding recovery, with July showing improvement in ad revenue pacing [21] - The company is experiencing increased advertiser interest, particularly from major brands focusing on African-American owned media [26] Other Important Information - The MGM National Harbor casino reopened at 50% capacity, contributing to revenue recovery [24] - The company saved approximately $7.1 million in employee compensation through layoffs and furloughs [12] Q&A Session Summary Question: How does the overall radio ad environment compare to the marketplace? - Management believes they are outperforming the market based on channel checks and pacing data [32][34] Question: Will the increased focus on African-American owned businesses benefit across the platform? - Advertisers are engaging in cross-platform conversations, benefiting both radio and TV [36] Question: What is needed for advertising to recover alongside traffic volume improvements? - A stabilization of the operating environment and a reduction in COVID-19 cases are necessary for recovery [38][40] Question: What is the current liquidity position? - The company reported around $76 million in cash, indicating a strong liquidity position [45] Question: Are there any thoughts on capital structure during the COVID-19 crisis? - The company is actively managing capital structure and engaging with debt holders to ensure compliance and explore options [46] Question: Can events pivot to virtual formats? - While possible, virtual events cannot match the profitability of in-person events due to reliance on ticket sales [50] Question: What are the expectations for revenue sharing from MGM National Harbor? - Revenue will not reach previous levels, but performance is expected to be better than initially anticipated at 50% capacity [51]