WASHINGTON, Nov. 3, 2022 /PRNewswire/ -- Urban One, Inc. (NASDAQ: UONEK and UONE) today reported its results for the quarter ended September 30, 2022. Net revenue was approximately $121.4 million, an increase of 8.9% from the same period in 2021. The Company reported operating income of approximately $19.0 million for the three months ended September 30, 2022, compared to approximately $34.5 million for the three months ended September 30, 2021. Broadcast and digital operating income¹ was approximately $50.8 million, an increase of 3.5% from the same period in 2021. Net income was approximately $4.2 million or $0.09 per share (basic) compared to $13.9 million or $0.27 per share (basic) for the same period in 2021. Adjusted EBITDA² was approximately $44.3 million for the three months ended September 30, 2022, compared to approximately $42.7 million for the same period in 2021.

Alfred C. Liggins, III, Urban One's CEO and President stated, "Q3 was another very solid quarter, during which we grew both revenues and Adjusted EBITDA. Following a soft July for radio advertising, August and September rebounded and we finished the quarter +1.4% on a same station basis, and -1.3% excluding political.  Same station radio pacings for Q4 excluding digital are currently +16.0% including political and +0.1% excluding political. Layering in the recent Indianapolis acquisition should push radio revenues to a double-digit percentage increase for Q4. Political spending has steadily gathered momentum, and we anticipate net political advertising revenues to be between $12-$13 million, of which radio is $9-$10 million, which is significantly ahead of both our budget and the 2018 cycle. Our Cable TV business had another successful broadcast upfront season, and we were able to increase both our CPM's and total dollars committed. Our Digital segment posted growth of approximately 40% in both revenue and Adjusted EBITDA as demand for our audience and digital products remained strong. Our liquidity and leverage profile remained robust, and we continued to opportunistically repurchase our 7.375% bonds in the open market."

 

 

 

 

 

Cautionary Note Regarding Forward-Looking Statements

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements represent management's current expectations and are based upon information available to Urban One at the time of this release. These forward-looking statements involve known and unknown risks, uncertainties and other factors, some of which are beyond Urban One's control, that may cause the actual results to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements.  Important factors that could cause actual results to differ materially are described in Urban One's reports on Forms 10-K, 10-K/A, 10-Q, 10-Q/A, 8-K and other filings with the Securities and Exchange Commission (the "SEC"). Urban One does not undertake any duty to update any forward-looking statements.

The COVID-19 pandemic could have an impact on certain of our revenue and alternative revenue sources on a going forward basis.  While parts of the country are recovering, other parts could see a resurgence of the pandemic and this could impact our results of operations, particularly in our larger markets such as Atlanta, Baltimore, Charlotte, Dallas, Houston, Indianapolis, and Washington, D.C. During the early portion of the pandemic, a number of advertisers across a variety of significant advertising categories reduced advertising spend due to the pandemic. This has been particularly true within our radio segment which derives substantial revenue from local advertisers, including in areas such as Texas, Ohio and Georgia. The economies in these areas were hit particularly hard due to social distancing and other government interventions. Further, the COVID-19 pandemic has caused a shift in the way people work and commute, which in some instances has altered demand for our broadcasting radio advertising. Finally, the COVID-19 outbreak caused the postponement or cancellation of certain of our tent pole special events or otherwise impaired or limited ticket sales for such events. A resurgence could have a similar future impact. We do not carry business interruption insurance to compensate us for losses and such losses may continue to occur as a result of the ongoing and fluctuating nature of the COVID-19 pandemic. New outbreaks or surges in new cases due to variants in the markets in which we operate could have material impacts on our liquidity, operations including potential impairment of assets, and our financial results.  Likewise, our income from our investment in MGM National Harbor Casino has at times been negatively impacted by closures and limitations on occupancy imposed by state and local governmental authorities.

Net revenue consists of gross revenue, net of local and national agency and outside sales representative commissions. Agency and outside sales representative commissions are calculated based on a stated percentage applied to gross billing.

 

 

Net revenue increased to approximately $121.4 million for the quarter ended September 30, 2022, from approximately $111.5 million for the same period in 2021. Net revenues from our radio broadcasting segment increased 4.8% compared to the same period in 2021. Net revenue from our radio broadcasting segment, excluding political advertising, increased 2.2% compared to the same period in 2021. Same station net revenue from our radio broadcasting segment, excluding political advertising, decreased 1.3% compared to the same period in 2021. Reach Media's net revenues increased 1.3% for the three months ended September 30, 2022, compared to the same period in 2021. We recognized approximately $50.8 million and $48.8 million of revenue from our cable television segment during the three months ended September 30, 2022, and 2021, respectively, due primarily to increased advertising sales. Net revenue for our digital segment increased approximately $6.0 million for the three months ended September 30, 2022, compared to the same period in 2021 primarily from higher direct revenues.

Operating expenses, excluding depreciation and amortization, stock-based compensation and impairment of long-lived assets, increased to approximately $80.5 million for the quarter ended September 30, 2022, up 7.9% from the approximately $74.6 million incurred for the comparable quarter in 2021. The overall operating expense increase was driven by higher programming and technical expenses and higher selling, general and administrative expenses, partially offset by lower corporate selling, general and administrative expenses.

As a result of increases in revenue, certain operating expenses have also increased including approximately $1.9 million in employee compensation expenses, $2.4 million in variable expenses, $525,000 in travel, entertainment and office expenses, $1.2 million in contract labor, talent costs and consulting fees, and $3.3 million in marketing, promotions and event spending. These increased expenses were partially offset by a decrease of approximately $1.1 million in content amortization and a decrease of approximately $2.1 million in corporate development costs. As a result of the acquisition and disposition of stations in Indianapolis on August 31, 2022, expenses for the cluster increased $992,000 for the three months ended September 30, 2022 compared to the same period in 2021. 

Depreciation and amortization expense increased to approximately $2.5 million for the quarter ended September 30, 2022, compared to approximately $2.3 million for the quarter ended September 30, 2021.

Interest expense decreased to approximately $15.3 million for the quarter ended September 30, 2022 compared to approximately $15.9 million for the quarter ended September 30, 2021. The Company made cash interest payments of approximately $29.9 million for the quarter ended September 30, 2022, compared to cash interest payments of approximately $31.6 million on its outstanding debt for the quarter ended September 30, 2021. During the quarter ended September 30, 2022, the Company repurchased approximately $25.0 million of its 2028 Notes at an average price of approximately 91.1% of par, resulting in a net gain on retirement of debt of approximately $1.8 million for the quarter ended September 30, 2022.

The impairment of long-lived assets for the three months ended September 30, 2022, was related to a non-cash impairment charge of approximately $14.5 million associated with our Atlanta, Charlotte, Dallas, Houston, Philadelphia, Raleigh and Richmond radio market broadcasting licenses.

During the three months ended September 30, 2022, we recorded a provision for income taxes of approximately $3.4 million compared to approximately $6.3 million for the three months ended September 30, 2021. The decrease in the provision for income taxes was primarily due to the application of the estimated annual effective tax rate for the year to date and pre-tax income of approximately $7.9 million during the quarter, and discrete tax benefits of $131,000 primarily related to statutory state tax rate changes. The tax provision resulted in an effective tax rate of 42.4% and 30.2% for the three months ended September 30, 2022 and 2021, respectively. The Company paid income taxes of $247,000 for the quarter ended September 30, 2022 and did not pay taxes for the quarter ended September 30, 2021.

Other income, net, was approximately $2.0 million and $2.1 million for the three months ended September 30, 2022 and 2021, respectively. We recognized other income in the amount of approximately $2.1 million for each of the three months ended September 30, 2022 and 2021, respectively, related to our MGM investment.

Other pertinent financial information includes capital expenditures of approximately $1.4 million and $1.7 million for the quarters ended September 30, 2022 and 2021, respectively. 

During the three months ended September 30, 2022, the Company did not repurchase any shares of Class A common stock and repurchased 100,803 shares of Class D common stock in the amount of $439,000. During the three months ended September 30, 2021, the Company did not repurchase any shares of Class A common stock and repurchased 6,715 shares of Class D common stock in the amount of $39,000.

The Company, in connection with its prior 2009 stock option and restricted stock plan and its current 2019 Equity and Performance Incentive Plan (the "2019 Plan"), is authorized to purchase shares of Class D common stock to satisfy employee tax obligations in connection with the vesting of share grants under the plan. During the three months ended September 30, 2022, the Company executed a Stock Vest Tax Repurchase of 325,872 shares of Class D Common Stock in the amount of approximately $1.4 million. During the three months ended September 30, 2021, the Company executed a Stock Vest Tax Repurchase of 3,285 shares of Class D Common Stock in the amount of $18,000.

Supplemental Financial Information:

For comparative purposes, the following more detailed, unaudited statements of operations for the three and nine months ended September 30, 2022 and 2021 are included.

 

 

 

 

 

Urban One, Inc. will hold a conference call to discuss its results for the third fiscal quarter of 2022. The conference call is scheduled for Thursday, November 03, 2022 at 10:00 a.m. EDT. To participate on this call, U.S. callers may dial toll-free 1-877-226-8216; international callers may dial direct (+1) 409-207-6983.  The Access Code is 9721643.

A replay of the conference call will be available from 1:00 p.m. EDT November 03, 2022 until 11:55 p.m. EST November 06, 2022. Callers may access the replay by calling 1-866-207-1041; international callers may dial direct (+1) 402-970-0847. The replay Access Code is 1399699.

Access to live audio and a replay of the conference call will also be available on Urban One's corporate website at www.urban1.com. The replay will be made available on the website for seven days after the call.

Urban One, Inc. (urban1.com), together with its subsidiaries, is the largest diversified media company that primarily targets Black Americans and urban consumers in the United States. The Company owns TV One, LLC (tvone.tv), a television network serving more than 59 million households, offering a broad range of original programming, classic series and movies designed to entertain, inform and inspire a diverse audience of adult Black viewers. As of September 30, 2022, we owned and/or operated 66 independently formatted, revenue producing broadcast stations (including 55 FM or AM stations, 9 HD stations, and the 2 low power television stations we operate) branded under the tradename "Radio One" in 13 urban markets in the United States. Through its controlling interest in Reach Media, Inc. (blackamericaweb.com), the Company also operates syndicated programming including the Rickey Smiley Morning Show, the Russ Parr Morning Show and the DL Hughley Show. In addition to its radio and television broadcast assets, Urban One owns iOne Digital (ionedigital.com), our wholly owned digital platform serving the African-American community through social content, news, information, and entertainment websites, including its Cassius, Bossip, HipHopWired and MadameNoire digital platforms and brands. We also have invested in a minority ownership interest in MGM National Harbor, a gaming resort located in Prince George's County, Maryland. Through our national multi-media operations, we provide advertisers with a unique and powerful delivery mechanism to the African-American and urban audiences.

Notes:

1. "Broadcast and digital operating income" consists of net (loss) income before depreciation and amortization, corporate selling, general and administrative expenses, stock-based compensation, income taxes, noncontrolling interest in income (loss) of subsidiaries, interest expense, impairment of long-lived assets, other (income) expense, loss (gain) on retirement of debt, gain on sale-leaseback and interest income. Broadcast and digital operating income is not a measure of financial performance under generally accepted accounting principles. Nevertheless, broadcast and digital operating income is a significant measure used by our management to evaluate the operating performance of our core operating segments because broadcast and digital operating income provides helpful information about our results of operations apart from expenses associated with our fixed assets and long-lived intangible assets, income taxes, investments, debt financings and retirements, overhead, stock-based compensation, impairment charges, and asset sales. Our measure of broadcast and digital operating income is similar to industry use of station operating income; however, it reflects our more diverse business and therefore is not completely analogous to "station operating income" or other similarly titled measures used by other companies. Broadcast and digital operating income does not purport to represent operating income or loss, or cash flow from operating activities, as those terms are defined under generally accepted accounting principles, and should not be considered as an alternative to those measurements as an indicator of our performance. A reconciliation of net income (loss) to broadcast and digital operating income has been provided in this release.
   
   
2. "Adjusted EBITDA" consists of net income (loss) plus (1) depreciation, amortization, income taxes, interest expense, noncontrolling interest in (loss) income of subsidiaries, impairment of long-lived assets, stock-based compensation, (gain) loss on retirement of debt, gain on sale-leaseback, Employment Agreement and incentive plan award expenses and other compensation, contingent consideration from acquisition, corporate development costs, severance-related costs, cost investment income, less (2) other income and interest income. Net income before interest income, interest expense, income taxes, depreciation and amortization is commonly referred to in our business as "EBITDA." Adjusted EBITDA and EBITDA are not measures of financial performance under generally accepted accounting principles. However, we believe Adjusted EBITDA is often a useful measure of a company's operating performance and is a significant measure used by our management to evaluate the operating performance of our business because Adjusted EBITDA excludes charges for depreciation, amortization and interest expense that have resulted from our acquisitions and debt financing, our taxes, impairment charges, and gain on retirements of debt. Accordingly, we believe that Adjusted EBITDA provides useful information about the operating performance of our business, apart from the expenses associated with our fixed assets and long-lived intangible assets or capital structure. EBITDA is frequently used as one of the measures for comparing businesses in the broadcasting industry, although our measure of Adjusted EBITDA may not be comparable to similarly titled measures of other companies, including, but not limited to the fact that our definition includes the results of all four segments (radio broadcasting, Reach Media, digital and cable television). Adjusted EBITDA and EBITDA do not purport to represent operating income or cash flow from operating activities, as those terms are defined under generally accepted accounting principles, and should not be considered as alternatives to those measurements as an indicator of our performance. A reconciliation of net income (loss) to EBITDA and Adjusted EBITDA has been provided in this release.
   
   
3. For the three months ended September 30, 2022 and 2021, Urban One had 46,625,484 and 51,190,105 shares of common stock outstanding on a weighted average basis (basic), respectively.  For the nine months ended September 30, 2022 and 2021, Urban One had 49,504,238 and 49,816,663 shares of common stock outstanding on a weighted average basis (basic), respectively. 
   
   
4. For the three months ended September 30, 2022 and 2021, Urban One had 50,206,608 and 55,080,394 shares of common stock outstanding on a weighted average basis (fully diluted for outstanding stock awards), respectively.  For the nine months ended September 30, 2022 and 2021, Urban One had 53,171,793 and 53,832,135 shares of common stock outstanding on a weighted average basis (fully diluted for outstanding stock awards), respectively. 

 

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SOURCE Urban One, Inc.

Peter D. Thompson, EVP and CFO, (301) 429-4638