管理層發言
Ladies and gentlemen, thank you for standing by, and welcome to the Urban One 2025 Third Quarter Earnings Call. As a reminder, this conference is being recorded. We will 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 that 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 November 4, 2025. 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 in talking about its performance.
These measures will be reconciled to GAAP either during the course or this call or in this company's press release, which can be found on its website at www.urban1.com. A replay of the conference call will be available from 2:00 p.m. Eastern Standard Time, November 4, 2025, until 11:59 p.m. Eastern Standard Time, November 14, 2025. Callers may access the replay by calling 1 (800) 770-2030. International callers may dial direct +1 609-800-9909. The replay access code is 7822067. Access to live audio and a replay of the conference will also 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 will now turn the call over to Alfred C. Liggins, Chief Executive Officer of Urban One, who is joined by Peter Thompson, Chief Financial Officer. Mr. Liggins, please go ahead.
Thank you very much, operator, and welcome, everybody. And as usual, we're joined by other team members here, Jody Drewer, our Chief Financial Officer for TV One and CLEO, in case we've got any questions on the cable business, Karen Wishart, our Chief Administrative Officer; Chris Simpson, our Chief Legal Officer; and also Veronika Takacs, who is our Chief Accounting Officer. And so thank you very much again for joining us this quarter. You've seen the press release, hopefully, that we put out. Business came in a bit softer for the quarter than we had projected across the board. Our core radio pacings going forward are facing big political headwinds. So looking at about minus 30% right now. However, excluding political, we're down to almost mid-single digits, 6.4%, which is better. It's an improvement. But because the revenues have come in lighter for Q3, we are adjusting our guidance for the year.
Last quarter, we guided to a $60 million EBITDA number. We generally usually give a range. We gave a hard number last quarter. We're adjusting that guidance down to $56 million to $58 million of EBITDA for the full year as we come to the close. Within our third quarter and last quarter, I said that we were going to look to do another round of cost savings, and we actually did that in Q3, which resulted in about $3 million of annualized expense savings. This is in addition to the $5 million that we had done earlier in the year. Peter is going to talk about the impact on the numbers in Q3 of that in terms of severance. And so with that, I'm going to turn it over to Peter, so he can go into the details of the numbers, and then we'll come back for Q&A.
Thank you, Alfred. Consolidated net revenue was approximately $92.7 million, reflecting a decrease of 16% year-over-year. The Radio Broadcasting segment generated $34.7 million, down 12.6% compared to the previous year. Excluding political revenue, net radio revenues fell by 8.1% year-over-year. According to Miller Kaplan, our local ad sales decreased by 6.5%, while the market contracted by 10.1%, indicating we performed better locally. In contrast, national ad sales dropped by 29.1%, while the market was down by 21.5%, showing underperformance on the national front. The largest ad category was services, which increased by 22.9%, largely due to legal services. Financial advertising rose by 17.9%, but all other major categories saw declines, including government, health, retail, entertainment, auto, telecom, food, and beverage. Reach Media segment net revenue for the third quarter was $6.1 million, down 40% from the prior year.
Adjusted EBITDA for Reach was a loss of about $200,000, attributed to a weaker overall network audio market, reduced national sales renewals, and possibly a decline in DEI funding. Digital segment net revenues decreased by 30.6% in Q3 to $12.7 million, with direct and indirect digital sales down by about $4.4 million due to decreases in DEI funds, back-to-school initiatives, political advertising, and softer client demand. Audio streaming revenue fell by $1.3 million year-over-year. Adjusted EBITDA was approximately $0.8 million compared to $5.3 million last year. We recognized around $39.8 million in revenue from the cable television segment during the quarter, down 7%. Cable TV advertising revenue decreased by 5.4%. Total day delivery declined by 29.4% in the P25-54 demographic, partially offset by growth in CTV and third-party platform revenue share. Cable TV affiliate revenue dropped by 9.1% due to subscriber churn.
By the end of Q3, Nielsen measured TV One's cable subscribers at 34.1 million, down from 34.3 million at the end of Q2, while CLEO TV had 33.5 million Nielsen subscribers. Operating expenses, excluding depreciation, amortization, stock-based compensation, and goodwill impairment, decreased to approximately $83.7 million for the quarter, down 4.2% from the previous year. There were notable expense reductions in corporate and professional fees, as well as overall payroll expenses. However, because of the August RMLC settlement with ASCAP and BMI, which led to a 20% increase in average royalty rates retroactive to January 2022, we recorded about $3.1 million in retroactive royalties in Q3, reflected in programming and technical expenses in the radio segment. We added that amount back to adjusted EBITDA. The company completed a second round of workforce reductions in October as part of ongoing cost-cutting measures, incurring $1.6 million in employee severance costs recognized in Q3, which was also added back to adjusted EBITDA for the quarter.
Radio operating expenses fell by 5% or $1.7 million, driven by lower employee compensation, sales commissions, and a favorable adjustment in the bad debt reserve compared to the previous year. Reach's operating expenses rose by 8% due to a beneficial change in the bad debt reserve from the previous year. Operating expenses in the digital segment decreased by 2.6%, attributed to lower employee compensation. Cable TV segment operating expenses declined by 2.4% year-over-year, primarily from lower programming content amortization due to fewer premier hours compared to last year. Corporate operating expenses were down by about $1.5 million, with significant year-over-year reductions in third-party finance and accounting professional fees. Consolidated adjusted EBITDA for the third quarter was $14.2 million, down 44.1%, and consolidated broadcast and digital operating income was approximately $20 million, decreasing by 43.6%.
Interest and investment income was about $0.5 million in Q3, down from $1.1 million last year due to lower cash balances in interest-bearing investment accounts. Interest expense dropped to around $9.4 million in Q3 from $11.6 million last year, thanks to reduced overall debt levels due to the company's debt repurchase initiatives. The company made approximately $18.2 million in cash interest payments during the quarter. In that period, the company repurchased $4.5 million of its 2028 notes at an average price of 52%, lowering the gross debt balance to $487.8 million as of September 30, 2025. Our depreciation and amortization expenses rose by $4.9 million because of adjustments to the useful lives of TV One trade names and FCC licenses, transitioning them from indefinite to finite lives. The income tax benefit was about $1.1 million for the third quarter, and cash income taxes paid, net of refunds, amounted to $0.1 million.
Capital expenditures totaled approximately $3.1 million. The net loss for the quarter was approximately $2.8 million or $0.06 per share, compared to a net loss of $31.8 million or $0.68 per share for the third quarter of 2024. During the three months ending September 30, 2025, the company repurchased 176,591 shares of Class A common stock for about $0.3 million at an average price of $1.75 per share and acquired 592,822 shares of Class D common stock for approximately $0.4 million at an average price of $0.73 per share. As of September 30, 2025, total gross debt was about $487.8 million. Our ending unrestricted cash balance was $79.3 million, resulting in a net debt of around $408.5 million, comparing to $67.9 million of last twelve months reported adjusted EBITDA, leading to a total net leverage ratio of 6.02x. And with that, I'll hand it back to Alfred.
Thank you very much, Peter. Operator, can we go to the lines for questions, please?
分析師問答
Our first question comes from Ben Briggs with StoneX Financial.
I have a couple of questions. First of all, even though we are looking ahead, we are only partway through the fourth quarter. How are you thinking about 2026 in terms of demand and listenership, and how do you see everything fitting together at that time?
Yes. We feel good about 2026 for a number of reasons. One, obviously, we're going into a political year. But two, a number of the places that we've had challenges this year, we have changed our operating strategy to address that. I would say most notably, where Reach Media has had a very tough year because we got caught flat-footed with a big, big decline in our largest advertiser in the company, unexpected cancellations, and these were cancellations across the board. When I say across the board, across the whole audio sector. And quite frankly, we weren't able to replace those ad dollars once we had committed that inventory. So we're able to get ahead of that. We saw Reach Media and iOne had benefited the most from the rise in DEI advertising, and we just got way too concentrated at Reach Media with two particular advertisers, one of those actually stood out more than the other. So we'll be more prepared for that going forward.
This is also our first year navigating Reach without our former President of the Audio division, David Kantor, who actually founded and created Reach. So trying to make that transition was difficult even though we knew it was coming and we prepared for it. And so I think we're better positioned there. Also, there have been a number of things that we're doing in our radio markets, where we think that we will perform better in particular in Washington, D.C., we just rearranged some of our formats there, and we launched a new format targeting the Hispanic community, which has become a very, very large segment in the D.C. area. It's almost close to 20% of the marketplace. I mean it's like 18.5% of the marketplace. And we positioned ourselves recently as a major player there, which is going to broaden our offering in the D.C. market in addition to some changes that we've made in terms of management and beefing up our sales staff, et cetera.
And so we've got a few other changes that we in some of the markets where we think it's going to improve performance in a meaningful way as well. And TV One has been holding in there this year. And so we think that given those things I just outlined, we're feeling good about a rebound in 2026.
That's good to hear, and I appreciate the insight. My next question is focused on plans following the fourth quarter. Are you considering any mergers or acquisitions, or do you have any larger initiatives in mind? I know you often trade radio stations, but are you looking at anything more significant for the future? I'm just curious if there are any other ideas being discussed.
I think everybody in the industry is focused on dereg and what's going to happen. You've seen a number of deals that have been filed already in the radio space looking for waivers to exceed the current ownership caps. The FCC has signaled that they think the ownership rules are antiquated and people in TV and in radio have submitted deals to be approved for waivers. There is also a notice for proposed rule-making out that I know that the industry is going to comment on if they haven't already about dereg. And I think everybody in the industry is going to be pro-dereg when I say everybody, I'm sure it's not necessarily going to be 100%. But that's going to create some opportunities for people to align assets in markets in a much more efficient manner. And yes, we're looking at that. There's nothing that is large and transformative that we're working on now because this is all very new. But we tend to try to think ahead and be intellectually creative in what the next move is.
And so all along, we've had conversations and thoughts and conversations with people about the art of the possible because historically, we haven't been up against the ownership cap. So we've probably had the ability to grow or do M&A that others haven't, even though in a dereg environment, that will be enhanced. But what is a governor is leverage. And is any transaction going to be delevering, right? And even when you look at these transactions, you've got to think about it against a backdrop just because you have dereg, doesn't necessarily solve your top line secular trajectory, right? So you just got to be careful about how you underwrite and M&A transaction. But with that said, I do think it's going to create some significant opportunities to build stability in these businesses. At the end of the day, the radio business is largely a local business. So you've got the opportunity to provide more different demographic targets to advertisers, local advertisers, I think that makes you a stronger player.
We've seen that in our Indianapolis market, our Houston market, our Charlotte market where we've spread out in different format demographics. And that's one of the things that we just did, like I articulated earlier in D.C. that I think is going to improve significantly. So there's no M&A deal that we are currently working on that's transformative as we speak, but I'm sure that we will explore opportunities to be able to rearrange the debt shares in order to make us a stronger entity.
Okay. Okay. That's all very, very helpful. And then the next thing I want to ask about is, I think, at the top of a lot of investors' minds, is your debt buyback activity. Obviously, you stated in the press release this morning that you did a little bit of buybacks in the third quarter. Are you expecting to continue to execute on those buybacks?
Yes, I anticipated that question because we've been more active in acquisitions in the past. However, due to the recent developments in potential deregulation and other changes, we've chosen to maintain our position and build some liquidity as we approach the end of the year. We want to see how things unfold and determine our next steps. We're consistently focused on reducing our debt and have various strategies for doing so. One method is buying back debt at a discount, while another, which we've implemented several times, including in Houston, is through M&A activity aimed at deleveraging. For now, we prefer to stay cautious and wait for opportunities that may arise in the near future.
And there are no further questions at this time. I'd like to hand the call back over to Alfred Liggins.
Thank you very much, operator. And again, as always, Peter and I are available for calls afterward, emails or calls directed to us. Thank you for your support, and we'll talk to you next quarter.
This concludes today's call. You may now disconnect.