Urban One(US:UONE)2022-11-06 02:58Financial Data and Key Metrics Changes - The company reported a net revenue growth of approximately 8.9% year-over-year, totaling around $121.4 million for Q3 2022 [13] - Adjusted EBITDA for the quarter was $44.3 million, an increase from $42.7 million in 2021 and $38.7 million in pre-pandemic 2019 [13] - The company updated its full-year EBITDA guidance to the mid-160s million range, indicating a strong performance in Q4 [6][28] Business Line Data and Key Metrics Changes - The Radio segment saw a net revenue increase of 4.8% year-over-year, with national ad sales up 19.7% [14] - The Digital segment experienced significant growth, with revenues increasing by 40.1% to $21 million [18] - Cable TV advertising revenue rose by 16.7%, while affiliate revenue decreased by 7.6% [20][21] Market Data and Key Metrics Changes - Political ad revenue for Q3 was $2.7 million, significantly higher than $711,000 in the previous year [15] - The fourth quarter is currently pacing up approximately 26.5% in the radio division, including political ads [16] - The company reported a decline in cable subscribers, with TV One at 43.6 million compared to 45 million at the end of Q2 [21] Company Strategy and Development Direction - The company is focused on deleveraging by buying back bonds in the open market, taking advantage of favorable market conditions [11] - There is an ongoing effort to enhance digital advertising capabilities, capitalizing on the demand for diverse media platforms [19][78] - The company is considering potential acquisitions but remains cautious about market valuations and the economic environment [60] Management's Comments on Operating Environment and Future Outlook - Management acknowledged macroeconomic headwinds affecting advertising demand, particularly in the TV sector, but expressed confidence in the radio segment's performance [51][56] - The company anticipates a decline in political ad revenue next year but expects growth from the Indianapolis acquisition and digital advertising [70] - Management feels well-positioned to navigate potential recession impacts, citing a strong balance sheet and reduced debt levels [57][60] Other Important Information - The company recorded a non-cash impairment charge of $14.5 million for broadcasting licenses due to overall market performance [27] - Total gross debt was reported at $775 million, with an unrestricted cash balance of $105.1 million, resulting in a net leverage ratio of 4.03x [29] Q&A Session Summary Question: Plans for continued debt buybacks - Management confirmed an additional $25 million authorization for debt buybacks, with approximately $7 million remaining [33][35] Question: MGM National Harbor investment valuation - The investment is valued at over $100 million based on a formula of 7x EBITDAR, with expectations of increased EBITDAR due to market share growth [41] Question: Subscriber trends for TV One - Management reported a gain of over 200,000 subscribers in November, indicating stabilization in subscriber numbers [47] Question: Advertiser reactions to macroeconomic conditions - Management noted a slowdown in national radio advertising but emphasized strong performance relative to competitors [53][56] Question: Sustainability of updated guidance - Management indicated that while political ad revenue will decline, growth from digital and the Indianapolis acquisition will help offset this [70][72]