Urban One, Inc.
Q2 2022 Earnings Call Transcript

Published: 9 Aug 2022

[Operator:]

Ladies and gentlemen, thank you for standing by, and welcome to Urban One's second quarter earnings call. During this conference, Urban One will be sharing 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 and 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 9, 2022.

[Please note that Urban One disclaims any duty to update any forward-looking statements made with the presentation in this call.:]

[Urban One may also discuss some non-GAAP financial measures in talking about its performance. The 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.urbanone.com.:]

[A replay of this conference will be available from 12 p.m. Eastern Time today through August 12 at 4:]

00 p.m. Callers may access the replay system by dialing 1 [phone]. International participants may dial [phone] and the access code being 8046193. Access to live and a replay is available on Urban One's corporate website at www.urbanone.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.:]

[Alfred Liggins:]

Thank you, operator. Also joining us today is Karen Wishart, our Chief Administrative Officer; Chris Simpson, who is our General Counsel; and Jody Drewer, who's the CFO of TV One. The press release is out with the results. And in my quote, it's pretty consistent what I'm going to say now is we're really happy about the strength of our business. We finished off Q2 with a nice push. Revenue is up 10.4%. EBITDA growth of 6%. Even though we are seeing a slowdown in the radio business, our slowdown is not as significant as I've heard some of the other companies report. And I still suspect -- expect, not suspect, I still expect that given our mix of assets, TV, our digital business is doing great, that you'll see positive revenue growth for our company in Q3.

[Political has been ahead of budget, and we won't know exactly where political is going to come in. So we actually get closer into it, but one of the things we're happy about is we're seeing a lot of tight races. Tight races are good for us. And in particular, we're seeing right races in Ohio which historically has leaned red, but it's looking tighter. We have a huge presence in Cleveland, Columbus, in Cincinnati, and we think political is going to bode well for us.:]

[We originally given guidance of $145 million to $150 million of EBITDA, then we upgraded that and said that we were going to exceed the high end of that guidance. We still fully expect to do that even with the looming slowdown. And we got a lot of positive momentum across many of our different divisions, in particular, we've got a great national effort going on out of our radio where we're taking advantage of the tailwind that the whole diversity and inclusion movement by advertisers that has been created, and we've got a great team of executing on that.:]

[So -- and I think one of the things you're seeing in our business is that dynamic that is in the marketplace and us actually having the expertise in the soldiers to execute that and bring that to fruition. Our TV One upfront is starting to wrap up, and I'll have a full report on that within the next 2 weeks. And so far, I'm very pleased with how that's going. So I anticipate our momentum will continue through the balance of this year and actually still into next year.:]

[With that, I'm going to turn over the call to Peter Thompson. So we can go into the details on the numbers, and then we'll come back for some Q&A afterwards.:]

[Peter Thompson:]

Thank you, Alfred. Second quarter of '22 finished strongly, with net revenues up across all operating segments, and consolidated adjusted EBITDA up 6.1% from the prior year. Consolidated adjusted EBITDA was $47.5 million for the quarter, up from $44.8 million in 2021, and also up from $39.6 million in pre-pandemic 2019.

[Net revenue was up by 10.4% year-over-year for the quarter at approximately $118.8 million. Net revenue for the radio segment increased by 4.9% year-over-year. According to Miller Kaplan, local ad sales were up 6.1% versus the market up 6.2%, and our national ad sales were up 3.6% against the market that was down 3.3%, and this was helped by our corporate sales effort in radio, that Alfred just referenced.:]

[The health care, entertainment services and auto categories had double-digit increases over last year, while telecommunications and financial had double-digit decreases. Overall, we outperformed the stock markets in which we operate by 230 basis points, but we like the market in digital network and CR. Q3 '22 radio revenue is currently pacing down 2.3%, including political.:]

[With July at minus 7%, August, minus 1% and September plus 6%. Excluding political, core radio revenues pacing down 4.4%.:]

[A competitive political ad season could add a couple of points to that pace by the end of the quarter. And as Alfred said, given the mix of our other assets, we're currently forecasting consolidated net revenues up mid- to high single digits for Q3.:]

[Net revenue for Reach Media was $11.1 million in the second quarter, up 17.8% over prior year. Revenue increase was due to strong demand and improved pricing. The biggest revenue increases were on the [indiscernible] show and also DL Hughley Show. Adjusted EBITDA in our REIT segment was up by 39% for the quarter, however, we are seeing a slowdown for some major retailers in third quarter and also automakers as new car demand continues to exceed the supply.:]

[Net revenues for our digital segment increased by 18.2% in Q2 to $17.9 million, iOne continues to see strong demand for digital across both direct and indirect. And also audio streaming impressions were up double digits year-over-year. Adjusted EBITDA increased for the quarter by 16.6% and demand continues to be strong for Q3. We recognized approximately $53.4 million of revenue from our cable television segment during the quarter, an increase of 10.3%. Cable TV advertising revenue was up 26.8%, excluding political, with a favorable rate volume impact of $4.5 million, $300,000 of free video on-demand, $1 million increase for CLEO TV revenues and $300,000 favorable ABU burn off. And Cable TV affiliate revenue was down 4.2% with favorable rate increases and converting free subs to paying subs, offset by churn and increased launch sport.:]

[Cable subscribers for TV One, as measured by Nielsen, finished Q2 at $45 million, compared to $46.8 million at the end of Q1 and CLEO TV at 41.3 million Nielsen subs. We recorded approximately $2.1 million of cost method income our investment in the MGM National Harbor property for the quarter compared to $1.9 million last year and $1.7 million in 2019. We have the option to put our [indiscernible] stake in MGM National Harbor at 7x the trailing EBITDA, and that's currently valued at around $100 million based on publicly available information.:]

[Operating expenses, excluding depreciation, amortization, impairments and stock-based compensation increased to approximately $75.2 million in Q2 compared to $67.2 million in Q2 of 2021. Employee compensation increased by approximately $2.3 million. Revenue variable expenses increased by $2.3 million. Travel, entertainment and office expenses increased by $1.5 million. Outside services, including contract, talents and consulting fees increased by $1.3 million. Marketing, promotional and event spending increased by $1 million. Radio operating expenses were up 14.2%. Expenses relating to the revenue increase, such as sales, commissions and bonuses were up, and there were some modest increases in employee salaries, travel and contract labor.:]

[A large part of the increase there was for investment in ad production for some of the company's biggest cross-platform clients. There are also nonrecurring credits in the prior year, which exaggerated the year-over-year increase in expenses for the quarter.:]

[Reach operating expenses were up by 4.6%. Talent costs were up slightly, but expenses remained relatively flat otherwise. Operating expenses in the digital segment were up 16%, driven predominantly by variable expenses related to traffic acquisition, sales and increased video production costs to support the revenue growth.:]

[Cable TV expenses were up 7.4% year-over-year. Employee compensation, on-air promotions and travel and entertainment were up, whilst content amortization and sales and marketing spend were roughly flat.:]

[Operating expenses in the Corporate and Eliminations segment were up by $1.2 million. Employee compensation contract label were up, T&E was up as well, mainly due to a return to the company's annual sales and leadership conference. For the second quarter, consolidated broadcast and digital operating income was approximately $55.1 million, an increase of 11.2%. During the quarter, the company repurchased $25 million of its 2028 notes at an average price of approximately 91% of par, resulting in a net gain on retirement of debt of approximately $1.9 million. Approximately $732,000 of accrued interest was paid on redemption.:]

[The company's PPP loans and related accrued interest were forgiven during the quarter, and recorded as other income in the amount of $7.6 million. Interest expense was relatively -- was flat at approximately $15.9 million for the second quarter. Company made cash interest payments of approximately $924,000 in the quarter, including the accrued interest on the retired notes and the next semiannual debt service payments due in Q3. A noncash impairment of $4.3 million was recorded for our Atlanta market goodwill balance, $10.7 million for Atlanta, Dallas, Houston and Raleigh radio market broadcasting licenses, and $1.9 million for an asset sale consideration for one of our Indianapolis radio broadcast licenses.:]

[Provision for income taxes was approximately $3.7 million for the quarter, and the company paid cash income taxes in the amount of $696,000. Net income was approximately $15 million or $0.30 per share compared to $17.9 million or $0.36 per share for the second quarter of 2021. Capital expenditures were approximately $2.3 million. Company repurchased 4,665,589 shares of Class D common stock in the amount of $24.6 million and executed a stock press tax repurchase of 16,181 shares of Class D common stock in the amount of $91,000. As of June 30, '22, the total gross debt was $800 million. Ending cash balance was $142.5 million, resulting in net debt of approximately $657.5 million compared to $164.7 million of LTM reported adjusted EBITDA for a total net leverage ratio of 3.99x, which is the first time we get under 4x for a very long time.:]

[Finally, let me address the other issue in the 8-K that we filed today. As part of our second quarter impairment review, the company performed an in-depth reconciliation of the assumptions used by our expert third-party valuation firm. During the course of that review, we found a relatively small error in the market revenue assumptions being used for Houston and Dallas, which related to the double count of the revenues from a small Hispanic broadcaster in those markets. The net effect of this is that we should have recognized a noncash impairment charge of approximately $3.7 million related to prior periods. Given the nonmaterial size and noncash impact, we recognized this charge as part of the current quarter noncash write-down of $16.9 million, and we will not be revising any of our prior P&L or balance sheet entries.:]

[The $13.2 million balance of the impairment charges for the quarter resulting from higher interest rate assumptions in the valuation model. We will be revising the control sections of our 2021 10-K, and our Q1 2022 10-Q in the coming days to reflect this control weakness. Our own the company expects to fully remediate this with the addition of some new control procedures during the third quarter.:]

[The significant additional work performed on this issue by both the company and our auditors means that we will need a few more days to file the second quarter Form 10-Q, hence, we will file a 14-day extension for that purpose. I expect we will wrap up this issue and file the Q by the end of this week. And with that, I'll hand back to Alfred.:]

[Alfred Liggins:]

Thank you, Peter. I wanted to just also highlight, that I had thought and Peter mentioned it, our investment in MGM National Harbor, which is fully vested, and we do have an exit put at 7x their cash flow. They have been performing this year extraordinary well and actually gaining considerable market share. In the Washington metropolitan area, they did a record number of gaming revenue in July, so they did like $77 million, almost $78 million. They'll probably close well north of $800 million of gaming revenue in 2022. So that investment continues to be very strong for us.

[And that's hidden value that's not reflected in the company's stock price valuation, but that continues to bode well. So as we reduce leverage, continue to build out smart -- smart M&A within our different business units like the Indianapolis deal that we're doing with [indiscernible] consolidating there, which should close by the end of August, our launch of CLEO TV a few years ago. CLEO TV's subs are getting actually very close to TV One subscriber base. I just feel really good about where the business is at. The team is doing a great job.:]

[We've got a core group of committed people who have been here a long time, know the business, know the company, and we're kind of firing on all cylinders now. So I want to thank the team for their efforts. I want to thank our shareholders and our debt holders for being supportive robustly throughout the years, and we're going to continue to try to make everybody proud as we march forward on our strategy and the execution of it.:]

[With that, operator, I'd love to ask you to open it up for Q&A.:]

[Operator:]

[Operator Instructions] And our first question comes from Kelly Chen from CQS.

[Kelly Chen:]

First, how do you think -- I mean, it's great to share that you either are still expecting to exceed EBITDA guidance even to slide over Q3. Can you just tell how you think you're going to get there? Is that there's just more cost saves or stronger-than-expected Q4?

[Alfred Liggins:]

I mean, even our -- our digital unit -- our cable television business is always pretty stable and pretty predictable. You've got a long ad buy cycle with upfront. We've -- I just said that we've been getting CLEO TV subscribers up. So with additional distribution that was added, advertising CPMs gone up, demand, we think the TV One's business is going to continue to perform well. Digital is really doing a good job on the upside. And the radio business has slowed, but I think everything else is going to offset it. So, quite frankly, our ability to get to that number has got nothing to do with us cutting costs or doing anything extraordinary to beat that guidance. I just think that's the trajectory of our business, yes.

[Kelly Chen:]

Got you. That's good to hear. And then also, in the quarter, it seems like you guys bought back a decent amount of bonds. Are you expecting to do more? You still have this $140 million cash flow there.

[Alfred Liggins:]

Yes. We've got 2 authorizations out there. We had a $25 million stock buyback authorization, which we pretty much exhausted. We have $50 million bond repurchase authorization. We bought that $25 million going right into the blackout period for earnings. So I suspect we'll be back in the market, looking to retire bonds after earnings. So yes, we're still focused on that.

[Kelly Chen:]

Great. That's also great to hear. So are you -- will that basically kind of cover how you guys are expecting to spend the rest of the cash? Or do you think acquisition coming?

[Alfred Liggins:]

No. I mean we've got a number of different things that we're looking at right now. But I would say that we made the announcement, I guess, this was a big thing that we didn't talk about, is we made the announcement that we are not going to pursue litigation in Richmond -- the Richmond Casino referendum. We have had it on the ballot for 2022 a court order. There's a state budget amendment that sought to block that. So therefore, you had competing laws, if you will. And it had to be litigated. We weren't going to be able to litigate it and get an answer in a timely fashion to be able to run a referendum. So we've asked the City of Richmond to petition to get the court order unwinded. And then we're going to focus on trying to run this referendum in '23.

[Long story short, we won't be writing a $100-plus million check this year or early next year. So we're going to look and see how we redeploy that cash in the most efficient way. And so there's stuff moving around right now, but sort of debt reduction and things of that nature are good uses of it. It's just going to increase our free cash flow. And so -- but we don't have a plan, right, this second, "Oh this is how we're going to spend our $145 million." We're going to probably look at each different opportunity and do a bit of each.:]

[Operator:]

And now to the line of Ben Briggs from Stonex Financial.

[Benjamin Briggs:]

Congratulations on the quarter. So 2 quick things from me here. I was excited to see the $25 million bond buyback. And it's good to know that you still have $25 million more authorized. Obviously, you've got a bunch of cash on the balance sheet right now. Is there any thought being given to monetizing the MGM stake? You guys said it's worth about $100 million. Because, I mean, that combined with the cash you have now could be a significant deleveraging opportunity?

[Or do you guys just like that free cash flow [indiscernible]?:]

[Alfred Liggins:]

We think about it once it hit 7x, we think about it. We look at it as -- we know we have that value there. We know we can delever. We know we could use that money if we had -- we need to fund Richmond Casino. Their cash flow, their revenues, and therefore, their cash flows are going up again this year. So I want to wait and see how it performs. But that's on the table, right? I highlighted it for a reason. And that reason is that I wanted people know that, that value continues to build. I believe it's north of $100 million. And I mean they're really crushing it. Yes, that's on the table. There's no plan yet. And quite frankly, we won't make a decision until we know what their year-end cash flow number is.

[Benjamin Briggs:]

Okay. Okay. That's great color. I appreciate that. And then the second and probably the last thing for me is, obviously, inflation is the buzzword these days. I know the main kind of inflationary pressure that you guys are probably going to feel is from labor inflation. Can you just give color on how that's impacting you? If, for some reason, you're insulated, if you're feeling a lot of headwinds from it. Any color would be very helpful?

[Alfred Liggins:]

I would say the #1 way it's impacting us right now is becoming increasingly harder to fill positions. So positions where we post something where we'd have 15 resumes for now we have 2. And so we've been actually giving people raises and bonuses for our core folks that were here. Once we came out of the pandemic cuts, because we did okay during the pandemic, we were able to kind of get people back on a real trajectory for income. But I think the biggest impact is trying to get new people into our work environment. And it is -- and we're finding it is competitive for some reason.

[Obviously, the people that are still here are relatively happy with the current economic plan because they were really either negotiated something new or they're at the level. It's the positions that aren't filled that we're trying to figure out, okay, why aren't we getting more? Are we priced too low, et cetera? So that's what I've heard back from HR is that it's just really hard to hire people right now.:]

[So -- but I -- we've got wage increases and bonuses and everything already baked into our operating budget. So I don't see inflation -- wage inflation impacting our results this year. We may have some people that are a bit over worked because we can't bring -- hire folks fast enough to fill out the open positions, but I don't see a big jump in costs.:]

[Operator:]

And now to the line of Frank Lazar, a private investor.

[Unknown Analyst:]

This is Frank Lazar, with Punta Gorda, Florida as a broker for 40 years, and you've answered most of the questions on the call. You've been very, very good about it and the -- but the question I have is that when I call the company to try to contact the Investor Relations person, nobody ever returns the call. Can you answer that?

[Alfred Liggins:]

Well, we don't have an Investor Relations person. So that may be one of the reasons. I'm not -- what line are you calling? I would hope...

[Unknown Analyst:]

The main line that's on the Internet.

[Alfred Liggins:]

On the website?

[Unknown Analyst:]

Right.

[Alfred Liggins:]

We have -- I can check that. I'm not sure. We'll check the website to see what's there. And maybe there's a lapse in us returning the calls from there. So we apologize. Peter and I always try to be accessible. So let us do this, let us check and see what's on the Internet and then let's see what kind of laps or issue we have with responding, but there shouldn't be, and we'll see to...

[Peter Thompson:]

You can also submit questions through the Investor Relations e-mail, which is also on the website.

[Unknown Analyst:]

I think I've done both in the -- I've got no replies in either. And the -- but the real question is that the big as you're as a company, wouldn't it be worth it to spend the money to have an investor relations person?

[Alfred Liggins:]

To be honest with you, we've operated -- we're so accessible to people, this is not also -- and we're not an industry right now that is really followed by research. So the Investor Relations people have generally been focused on more things for institutional investors and following. And there's very few people who follow radio companies, if you will. So when we're trying to bail out a bunch of debt and not go bankrupt, like pretty much all the other radio companies did, an Investor Relations person definitely seem like a luxury.

[Unknown Analyst:]

Well, from my perspective, I think it -- the short sellers seem to be finding you quite readily when the stock popped up, they find a reason to show you, and they knock the stock back down to where it is. And you don't find a problem with them?

[Alfred Liggins:]

No. Because when the stock trades up as it does on irrational speculation and momentum, quite frankly, it shouldn't be there in the first place. And I'd like for our stock to actually trade with some sort of rational valuation in my view. And so I don't spend a bunch of time worried about if our Class A stock is going to stay at 24%. I mean we're not -- sometimes they've traded us as a mean stock. And in other times right now, they're not trading us as the mean stock. And me and the family, we've been long-term holders and buyers of the stock. And we figured that if we focus on performance and grow our cash flow and lower our debt, the stock tries to take care of itself.

[Operator:]

And now to Sundar Varadarajan from L.A.

[Sundar Varadarajan:]

This is Sundar Varadarajan from Lord, Abbett. I just want to follow up on your Q3 guidance. I think a previous caller attributed some weakness in Q3. But if I heard you right, you -- can you say up in the mid-single digits for Q3 for revenue? I was not sure if I missed something, so I would appreciate if you could clarify that. So from a comparison basis, how you think margins should kind of trend in Q3 based on that revenue guidance?

[Peter Thompson:]

Yes. So I think you heard 2 different things. You heard us talk about radio, which is down 2.3%, including political, and down 4.4% excluding political. So that was one thing. And then we talked about the fact that our other business segments would compensate for the softness there. So overall, what I think you were referring to is we think consolidated net revs will be up somewhere in the mid- to high single-digit percentages for Q3. Does that first part make sense?

[Sundar Varadarajan:]

Yes. Yes. So consolidated basis, mid- to high single digits, and that's year-over-year, right?

[Peter Thompson:]

Yes. And from a margin standpoint, I don't think the Q3 margins are going to be as high as Q1 and Q2. They're probably going to be low to mid-30s, somewhere in that area. And there's a few reasons for that. As we said, cost in the -- so you've got digital revenues growing quite strongly, but the cost of acquiring those revenues is also going up, right? So video production cost, traffic acquisition costs, content costs. And then the other sort of variable is TV, which can have fairly lumpy MO and programming costs. So those things are not really linear. So hence, I would think about it as a low- to mid-30% margin somewhere in that range for third quarter.

[Sundar Varadarajan:]

Got it. And then I just kind of want to go back to your cable TV advertising revenues. It's up 26%. That seems to be pretty strong. And I think you mentioned that ex-political as well. So I was wondering if you could give some kind of granularity or color as to what's driving that growth on the capabilities?

[Alfred Liggins:]

Yes. I mean there has been a real movement with the advertisers to look for diverse content and diverse ownership. Now, I mean, this company started in 1980, so how does that make us -- we're 42 years old, and we've had the same strategy for 42 years. And we've built that strategy out in radio and in television and digital.

[And so I would say that we built a brand, right? Serving the African-American community. And so -- and we built good assets. TV One is a well-distributed cable network. CLEO is now a well-distributed cable network. So when advertisers actually waking up and say, "I'm going to put more money against the demo," I think we're benefiting from 42 years of brand building of being committed to this space. And it's coming through in our ad line.:]

[I mean it's really that simple. Our ratings are kind of holding in there. We try not to have inadequate media vehicles or inadequate product. We don't show up with a website and say give me a bunch of money because when we build out a company that's got millions of users and 100 websites and best-in-class research and delivery and sales people and ad sales marketing, and we call it Interactive One. And we come with a full solution, and we're being rewarded for that. So that's -- I'm proud of that because, by the way, 7 years ago, 6 years ago, 5 years ago, we had the same strategy. We're going after the same resources, but -- particularly in digital, but the advertiser response was not there at that level.:]

[And today it is. And so that's been -- it's been a big benefit for us.:]

[Sundar Varadarajan:]

And then as you look forward, how much steam is there for this to continue to grow? Or do you think as comps get tougher, you're going to see some moderation?

[Alfred Liggins:]

That's a great question. We ask ourselves that all the time, like how long will this diversity and inclusion effort last. What I can tell you is that it really started, it started during the George Floyd Black Lives Matter protests. It probably got steam going into -- a real head of steam going into the next year, call it, '21. Marketers like General Motors and McDonald's, Procter & Gamble, they're talking about multiyear commitments to get to a certain level. So I suspect, and again, I know I am not most of them and I can't predict the future. But I definitely see it continuing for the next -- at least the next 2 or 3 years just because of the commitments that a lot of these big companies have verbally made, publicly made.

[So things can change. CEOs change out and strategies, strategy shifts -- strategies shift, but I know it's happened into '23 because we're feeling it. Upfront for TV One is almost done. And so I know what that looks like. So I think we're good for the next 2 or 3 years.:]

[Sundar Varadarajan:]

That's great. I just want to turn back into capital allocation. It will be good to see that you bought back $25 million of debt. And I was not -- I didn't catch some of the comments you said about activity in Q3 because [ 91 ] was a good price from your perspective. I think given the markets, the debt's trading at an even more attractive price. Did you say you have a $25 million authorization further like that?

[Alfred Liggins:]

Yes. That's what the Board had authorized $50 million, we executed on $25 million. We've got another $25 million without going back to the Board. So as management sitting here, seems tomorrow opens up, we have the ability to go in and take out another $25 without going back to our Board. So -- and we like paying down debt.

[Sundar Varadarajan:]

That's what the bond investors like to hear as well. But -- and then, finally, given the delay or kind of postponement of your Richmond, Virginia decision, and you had earmarked $100 million, but you've not fully given up on that either. So where do you think you're comfortable taking your cash balance down to? Whether it be for debt buybacks or equity buybacks?

[Alfred Liggins:]

Yes. I don't know. I hadn't really thought that out because also there's M&A things that we look at, at any given time. And -- but I don't know.

[Sundar Varadarajan:]

Got it. And any revisiting your leverage targets given the current -- the markets are a little bit different from -- for credit market for a lot tougher as well?

[Alfred Liggins:]

I mean our original leverage target was to get below 4x. We're there now, right? So I'd like to get it down further.

[Operator:]

And now we go to the line of Rafe from Eaton Vance.

[Raphael Leeman:]

Great. So some of the other radio players have mentioned some weakness in government spending on the radio side. I think you had -- you mentioned that last quarter. I'm just wondering if you could comment on that this quarter. I think that's one of your largest categories. And then I'm curious, too, on the TV side, if it -- how -- what percent of your revenue it is and how it did in the quarter?

[Peter Thompson:]

Yes. So it's -- I'm looking at Q2. It was our biggest category, and it was down 1.8 year-over-year. So margin really down, but still our biggest category. So I didn't -- it's still -- I would say that it's still strong given its -- for the quarter in radio, it was $7.2 million. So there were no big swings -- there were swings elsewhere, but not particularly in government and public.

[Raphael Leeman:]

Got it. And on the TV side, is it largely as well?

[Alfred Liggins:]

We don't get a whole impact...

[Peter Thompson:]

I don't know if you heard Jody say less than $0.5 million. So it was not on the TV side.

[Raphael Leeman:]

Got it. And then just curious, you said it was a strong finish in the quarter. Can you give a sense of what it was by month? I mean, I think some folks saw weakness early and then it came back better. It sounds like it is similar to you.

[Alfred Liggins:]

Well, I don't know if you caught my earlier comments. I know that pricing on this year. So I didn't give...

[Raphael Leeman:]

Yes, I think you had it for the next quarter.

[Alfred Liggins:]

Yes. Q3 give me a second, I will just pull it up. Yes. So it's like April was up just under 5%, May was up couple of percent and June was up 3.7%.

[Operator:]

And now to the line of John Mark Smith from [indiscernible].

[Unknown Analyst:]

Can you hear me?

[Alfred Liggins:]

Yes.

[Unknown Analyst:]

All right. So you guys are sitting on a bunch of cash right now. Do you have any plans to diversify from your radio and your television business right now?

[Alfred Liggins:]

Yes, we had one in [indiscernible] casino, one in Richmond, Virginia. And that kind of got [indiscernible]. We lost the referendum, and so we're trying to get a second shot. I mean we have been -- our diversification efforts have been focused on casino gaming. We're looking at some other things right now. We don't -- we've looked at broadcast television in the past, haven't found anything that made sense. Yes. So we're continuing to look.

[I think that I'd say continuing to -- I've always liked to look at businesses where I think our existing platform can help us be more successful in those businesses than we -- or somebody else might otherwise be. And that's how we've ended up in the different businesses that we are, and we're continuing to do that. So -- but then, again, I'm excited about our Indianapolis. I'm really excited about that. That's a bit of diversity. it's not different business diversification, but its diversification of format is there a bunch of general market formats versus our typical urban targeted format.:]

[That strategy worked really well for us with the swap we did with Entercom, where we got bigger in Charlotte, North Carolina. I mean, in Charlotte, we own the big conservative news talk radio station in that market, and we just did the same thing in Indianapolis. And I think we've got a business strategy and how to make that successful. And so we're constantly doing that because that diversification strategy is actually what really has saved the company.:]

[Unknown Analyst:]

Awesome. So can you guys just give me a really brief timeline of your future then? Let's say that you get the casino, and you get -- you're really diversifying to casinos. What will you do after that then?

[Alfred Liggins:]

Gosh. Yes, look, my goal is to continue to pay down debt, build value, meaning finding places where you can invest $100 million and it's going to be worth $200 million. That's -- that's how I like to look at businesses. You have a low enough debt level and you can start to issue dividends to shareholders. That's kind of how I look at the future. We've never been -- we've done -- we have sold stuff. We sold radio stations before. I mean, I think we're business people. Asset -- every asset has a price. But as an ultimate strategy, we've always felt comfortable that we've had a way to build the value as opposed to just selling and checking out.

[And so I think that, that's still the case. We like what we do. We've proven to be decent at it and we're going to continue to do it. But the family owns half the company. And so creating shareholder value is really important.:]

[I know creating shareholder value is what everybody says, but it's really important to me. Most people who say it don't really have like skin in the game, which is why we thought so hard to dig out from under north of 9x debt that we had in 2010. And so we're playing offense now. And by the way, I look at offense, but as also paying down debt at [ 85 ] that 6 months ago, if I wanted to pay it down it was going to cost me [ 103 ]. That's often to me. That's a risk-free return of 11% just by paying down debt.:]

[Operator:]

We have no one else in queue. Please continue.

[Alfred Liggins:]

Thank you, operator. Thank you, everybody. The investors in Florida. We will definitely check the Investor Relations e-mail and voicemail, we apologize for that. Thank you for your support, and we look forward to talking to you next quarter.

[Operator:]

All right. Thank you. And ladies and gentlemen, this conference will be available for replay after 12