NEWS RELEASE

Washington, DC

URBAN ONE, INC. REPORTS FIRST QUARTER RESULTS

Washington, DC: - Urban One, Inc. (NASDAQ: UONEK and UONE) today reported its results for the quarter ended March 31, 2020. Net revenue was approximately $94.9 million, a decrease of 3.6% from the same period in 2019. Broadcast and digital operating income¹ was approximately $37.6 million, an increase of approximately $4.3 million from the same period in 2019. The Company reported an operating loss of approximately $27.3 million for the three months ended March 31, 2020, compared to operating income approximately $14.8 million for the same period in 2019. Net loss was approximately $23.2 million or $0.51 per share (basic) compared to net loss of approximately $3.1 million or $0.07 per share (basic) for the same period in 2019. Adjusted EBITDA² was approximately $32.3 million for the three months ended March 31, 2020, compared to approximately $27.7 million for the same period in 2019.

Alfred C. Liggins, III, Urban One's CEO and President stated, "We got off to a great start to the year, with robust political advertising pushing same station revenues to +3.2% and +13.2% for January and February respectively. Then the impact of COVID-19 hit our radio markets, and March rapidly turned from positive to finish -14.1%. Despite this, we were able to post double digit Adjusted EBITDA growth for the quarter, and this is a testament to both our diversified mix of assets and the dedication and skill of our employees. On a same station basis, radio advertising for April was down 58.3%, and Q2 is pacing -57.3%. Both local and national advertising is impacted by broadly similar percentages. Like many other businesses, we were forced to reduce fixed costs by means of furloughs, layoffs, significant salary cuts, and reduction of all discretionary expenditure.  Our diverse mix of assets will help us through this crisis; in particular our Cable TV and Digital segments are not impacted to the same extent as radio, and due to a combination of strong ratings, deferred programming and marketing expenses plus other cost cuts, we expect the TV segment to deliver incremental EBITDA to help offset some of the declines in radio.  Liquidity remains strong, and I believe we have seen a floor in the revenue declines. As markets begin to re-open State by State, we intend to partner with our clients using all of our platforms to help them re-start their businesses and serve their communities in these unprecedented times."

-MORE-

 

PAGE 2 -- URBAN ONE, INC. REPORTS FIRST QUARTER RESULTS

 

RESULTS OF OPERATIONS
		Three Months Ended March 31,
		2020				2019
STATEMENT OF OPERATIONS		(unaudited)
		(in thousands, except share data)
NET REVENUE		$	94,875			$	98,449
OPERATING EXPENSES
Programming and technical, excluding stock-based compensation			27,862				31,517
Selling, general and administrative, excluding stock-based compensation			29,377				33,567
Corporate selling, general and administrative, excluding stock-based compensation			8,332				9,784
Stock-based compensation			393				511
Depreciation and amortization			2,548				8,274
Impairment of long-lived assets			53,650				-
Total operating expenses			122,162				83,653
Operating (loss) income			(27,287	)			14,796
INTEREST INCOME			8				23
INTEREST EXPENSE			19,138				20,830
OTHER INCOME, net			(1,504	)			(1,721	)
Loss before benefit from income taxes and noncontrolling interest in income of subsidiaries			(44,913	)			(4,290	)
BENEFIT FROM INCOME TAXES			(21,855	)			(1,311	)
CONSOLIDATED NET LOSS			(23,058	)			(2,979	)
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS			129				125
CONSOLIDATED NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS		$	(23,187	)		$	(3,104	)
AMOUNTS ATTRIBUTABLE TO COMMON STOCKHOLDERS
CONSOLIDATED NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS		$	(23,187	)		$	(3,104	)
Weighted average shares outstanding - basic3			45,228,164				45,001,767
Weighted average shares outstanding - diluted4			45,228,164				45,001,767

 

 

-MORE-

 

 

PAGE 3 -- URBAN ONE, INC. REPORTS FIRST QUARTER RESULTS

 

		Three Months Ended March 31,
		2020				2019
PER SHARE DATA - basic and diluted:		(unaudited)				(unaudited)
		(in thousands, except per share data)
Consolidated net loss attributable to common stockholders (basic)		$	(0.51	)		$	(0.07	)
Consolidated net loss attributable to common stockholders (diluted)		$	(0.51	)		$	(0.07	)
SELECTED OTHER DATA
Broadcast and digital operating income 1		$	37,636			$	33,365
Broadcast and digital operating income margin (% of net revenue)			39.7	%			33.9	%
Broadcast and digital operating income reconciliation:
Consolidated net loss attributable to common stockholders		$	(23,187	)		$	(3,104	)
Add back non-broadcast and digital operating income items included in consolidated net loss:
Interest income			(8	)			(23	)
Interest expense			19,138				20,830
Benefit from income taxes			(21,855	)			(1,311	)
Corporate selling, general and administrative expenses			8,332				9,784
Stock-based compensation			393				511
Other income, net			(1,504	)			(1,721	)
Depreciation and amortization			2,548				8,274
Noncontrolling interest in income of subsidiaries			129				125
Impairment of long-lived assets			53,650				-
Broadcast and digital operating income		$	37,636			$	33,365
Adjusted EBITDA2		$	32,260			$	27,716
Adjusted EBITDA reconciliation:
Consolidated net loss attributable to common stockholders:		$	(23,187	)		$	(3,104	)
Interest income			(8	)			(23	)
Interest expense			19,138				20,830
Benefit from income taxes			(21,855	)			(1,311	)
Depreciation and amortization			2,548				8,274
EBITDA		$	(23,364	)		$	24,666
Stock-based compensation			393				511
Other income, net			(1,504	)			(1,721	)
Noncontrolling interest in income of subsidiaries			129				125
Employment Agreement Award, incentive plan award expenses and other compensation			1,212				1,909
Contingent consideration from acquisition			(72	)			77
Severance-related costs			326				420
Cost method investment income from MGM National Harbor			1,490				1,729
Impairment of long-lived assets			53,650				-
Adjusted EBITDA		$	32,260			$	27,716

 

 

 

 

-MORE-

 

 

PAGE 4 -- URBAN ONE, INC. REPORTS FIRST QUARTER RESULTS

 

		March 31, 2020				December 31, 2019
		(unaudited)
		(in thousands)
SELECTED BALANCE SHEET DATA:
Cash and cash equivalents and restricted cash		$	66,390			$	33,546
Intangible assets, net			827,191				881,708
Total assets			1,223,744				1,249,919
Total debt (including current portion, net of original issue discount and issuance costs)			892,509				876,253
Total liabilities			1,054,784				1,056,280
Total stockholders' equity			158,668				183,075
Redeemable noncontrolling interest			10,292				10,564
		March 31, 2020				Applicable Interest Rate
			(in thousands)
SELECTED LEVERAGE DATA:
2017 Credit Facility, net of original issue discount and issuance costs of approximately $5.0 million (subject to variable rates) (a)		$	314,821				5.00	%
7.375% senior secured notes due April 2022, net of original issue discount and issuance costs of approximately $2.2 million (fixed rate)			347,824				7.375	%
2018 Credit Facility, net of original issue discount and issuance costs of approximately $3.5 million (fixed rate)			151,712				12.875	%
MGM National Harbor Loan, net of original issue discount and issuance costs of approximately $2.0 million (fixed rate)			50,652				11.00	%
Asset-backed credit facility (subject to variable rates) (a)			27,500				2.50	%

 

(a)	Subject to variable Libor or Prime plus a spread that is incorporated into the applicable interest rate set forth above.

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-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.

 

-MORE-

 

 

PAGE 5 -- URBAN ONE, INC. REPORTS FIRST QUARTER RESULTS

 

Beginning in March 2020, the Company noted that the COVID-19 pandemic and the resulting government stay at home orders across the markets in which we operate were dramatically impacting certain of the Company's revenues. Most notably, a number of advertisers across significant advertising categories have reduced or ceased advertising spend due to the outbreak and stay at home orders which effectively shut many businesses down.  This was particularly true within our radio segment which derives substantial revenue from local advertisers who have been particularly hard hit due to social distancing and government interventions. Further, the COVID-19 outbreak has caused the postponement of our 2020 Tom Joyner Foundation Fantastic Voyage cruise and impaired ticket sales and/or caused the postponement of other tent pole special events. We do not carry business interruption insurance to compensate us for losses that may occur as a result of any of these interruptions and continued impacts from the COVID-19 outbreak. Continued or future outbreaks and/or the speed at which businesses reopen in the markets in which we operate could have material impacts on our liquidity and/or operations including causing potential impairment of assets and of our financial results.

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.

 

		Three Months Ended March 31,
		2020				2019				$ Change				% Change
		(Unaudited)
		(in thousands)
Net Revenue:
Radio Advertising		$	38,417			$	42,374			$	(3,957	)			-9.3	%
Political Advertising			2,404				123				2,281				1854.5	%
Digital Advertising			6,289				7,437				(1,148	)			-15.4	%
Cable Television Advertising			21,033				20,193				840				4.2	%
Cable Television Affiliate Fees			26,207				27,475				(1,268	)			-4.6	%
Event Revenues & Other			525				847				(322	)			-38.0	%
Net Revenue (as reported)		$	94,875			$	98,449			$	(3,574	)			-3.6	%

 

Net revenue decreased to approximately $94.9 million for the quarter ended March 31, 2020, from approximately $98.4 million for the same period in 2019. Net revenues from our radio broadcasting segment decreased 5.0% compared to the same period in 2019. We experienced net revenue declines most significantly in our Baltimore, Cleveland, Detroit, Indianapolis, and St. Louis markets, with our Charlotte, Columbus and Philadelphia markets experiencing growth for the quarter. The declines in Detroit were driven by the previously announced sale of our Detroit WDMK-FM station as of August 31, 2019. Same station net revenue, excluding political, from our radio broadcasting segment decreased 5.7% compared to the same period in 2019. We recognized approximately $47.5 million of revenue from our cable television segment during the three months ended March 31, 2020, compared to approximately $47.8 million for the same period in 2019. Net revenue from our Reach Media segment decreased 4.1% for the quarter ended March 31, 2020, compared to the same period in 2019. Finally, net revenues for our digital segment decreased approximately $1.1 million for the three months ended March 31, 2020, compared to the same period in 2019, primarily due to a decrease in direct revenues.

Operating expenses, excluding depreciation and amortization, stock-based compensation and impairment of long-lived assets, decreased to approximately $65.6 million for the quarter ended March 31, 2020, down 12.4% from the approximately $74.9 million incurred for the comparable quarter in 2019. The overall operating expense decrease was driven primarily by lower programming and technical expenses, lower selling, general and administrative expenses and lower corporate selling, general and administrative expenses. The decrease in programming and technical expenses was primarily driven by lower program content amortization expense at our cable television segment. The decrease in selling, general and administrative expenses is primarily from our radio broadcasting segment and our cable television segment as a result of lower marketing spend.

 

 

-MORE-

 

 

PAGE 6 -- URBAN ONE, INC. REPORTS FIRST QUARTER RESULTS

 

Depreciation and amortization expense decreased to approximately $2.5 million for the quarter ended March 31, 2020, compared to approximately $8.3 million for the same quarter in 2019. The decrease in expense is due to the mix of assets approaching or near the end of their useful lives, most notably certain of the Company's cable television affiliate agreements.

Interest expense decreased to approximately $19.1 million for the quarter ended March 31, 2020, compared to approximately $20.8 million for the same period in 2019. The Company made cash interest payments of approximately $13.9 million on its outstanding debt for the quarter March 31, 2020, compared to cash interest payments of approximately $13.2 million on its outstanding debt for the quarter ended March 31, 2019. As of March 31, 2020, the Company had approximately $27.5 million in borrowings outstanding on its ABL Facility.

The impairment of long-lived assets for the three months ended March 31, 2020, was related to a non-cash impairment charge of approximately $6.0 million recorded to reduce the carrying value of our Atlanta and Indianapolis market goodwill balances and a charge of approximately $47.7 million associated with our Atlanta, Cincinnati, Dallas, Houston, Indianapolis, Philadelphia, Raleigh, Richmond and St. Louis radio market broadcasting licenses. 

The decrease in stock-based compensation for the three months ended March 31, 2020, compared to the same period in 2019, is primarily due to grants and vesting of stock awards for certain executive officers and other management personnel.

During the three months ended March 31, 2020, the benefit from income taxes increased to approximately $21.9 million compared to a benefit from income taxes of approximately $1.3 million for the three months ended March 31, 2019. The increase in the benefit from income taxes was primarily due to the application of the actual effective tax rate for the year to date and pre-tax loss of approximately $44.9 million during the quarter, and discrete tax provision adjustments to previously un-recognized deferred tax assets that the Company believes it can now benefit from in future periods. For the three months ended March 31, 2019, the benefit from income taxes consisted of deferred tax expense of approximately $1.3 million. The tax provision resulted in an effective tax rate of 48.7% and 30.6% for the three months ended March 31, 2020 and 2019, respectively. The Company did not pay taxes for the quarter ended March 31, 2020 and paid $91,000 in taxes for the quarter ended March 31, 2019.

Other income, net, was approximately $1.5 million and $1.7 million for the three months ended March 31, 2020 and 2019, respectively. We recognized other income in the amount of approximately $1.5 million and $1.7 million for the three months ended March 31, 2020 and 2019, respectively, related to our MGM investment.

Other pertinent financial information includes capital expenditures of approximately $1.4 million and $707,000 for the quarters ended March 31, 2020 and 2019, respectively. 

During the three months ended March 31, 2020, the Company did not repurchase any shares of Class A common stock or Class D common stock. During the three months ended March 31, 2019, the Company repurchased 22,380 shares of Class A common stock in the amount of $50,000 and repurchased 369,000 shares of Class D common stock in the amount of $755,000.

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 March 31, 2020, the Company executed a Stock Vest Tax Repurchase of 547,801 shares of Class D Common Stock in the amount of approximately $1.0 million. During the three months ended March 31, 2019, the Company executed a Stock Vest Tax Repurchase of 852,000 shares of Class D Common Stock in the amount of approximately $1.6 million.

Supplemental Financial Information:

For comparative purposes, the following more detailed, unaudited statements of operations for the three months ended March 31, 2020 and 2019 are included.

 

 

 

 

-MORE-

 

 

PAGE 7 -- URBAN ONE, INC. REPORTS FIRST QUARTER RESULTS

 

		Three Months Ended March 31, 2020
		(in thousands, unaudited)
						Radio				Reach								Cable				Corporate/
		Consolidated				Broadcasting				Media				Digital				Television				Eliminations
STATEMENT OF OPERATIONS:
NET REVENUE		$	94,875			$	34,916			$	6,689			$	6,289			$	47,497			$	(516	)
OPERATING EXPENSES:
Programming and technical			27,862				9,880				3,417				3,120				11,827				(382	)
Selling, general and administrative			29,377				16,432				1,751				4,069				7,251				(126	)
Corporate selling, general and administrative			8,332				-				718				-				1,322				6,292
Stock-based compensation			393				79				9				6				-				299
Depreciation and amortization			2,548				741				59				488				943				317
Impairment of long-lived assets			53,650				53,650				-				-				-				-
Total operating expenses			122,162				80,782				5,954				7,683				21,343				6,400
Operating (loss) income			(27,287	)			(45,866	)			735				(1,394	)			26,154				(6,916	)
INTEREST INCOME			8				-				-				-				-				8
INTEREST EXPENSE			19,138				3				-				79				1,919				17,137
OTHER INCOME, net			(1,504	)			-				-				-				-				(1,504	)
(Loss) income before (benefit from) provision for income taxes and noncontrolling interest in income of subsidiaries			(44,913	)			(45,869	)			735				(1,473	)			24,235				(22,541	)
(BENEFIT FROM) PROVISION FOR INCOME TAXES			(21,855	)			(9,849	)			183				-				6,055				(18,244	)
CONSOLIDATED NET (LOSS) INCOME			(23,058	)			(36,020	)			552				(1,473	)			18,180				(4,297	)
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS			129				-				-				-				-				129
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS		$	(23,187	)		$	(36,020	)		$	552			$	(1,473	)		$	18,180			$	(4,426	)
Adjusted EBITDA2		$	32,260			$	8,751			$	803			$	(810	)		$	27,103			$	(3,587	)

 

 

-MORE-

 

PAGE 8 -- URBAN ONE, INC. REPORTS FIRST QUARTER RESULTS

 

		Three Months Ended March 31, 2019
		(in thousands, unaudited)
						Radio				Reach								Cable				Corporate/
		Consolidated				Broadcasting				Media				Digital				Television				Eliminations
STATEMENT OF OPERATIONS:
NET REVENUE		$	98,449			$	36,749			$	6,973			$	7,437			$	47,823			$	(533	)
OPERATING EXPENSES:
Programming and technical			31,517				10,211				4,063				2,897				14,822				(476	)
Selling, general and administrative			33,567				17,438				1,539				4,702				9,939				(51	)
Corporate selling, general and administrative			9,784				-				812				1				1,408				7,563
Stock-based compensation			511				95				14				16				6				380
Depreciation and amortization			8,274				869				59				461				6,575				310
Total operating expenses			83,653				28,613				6,487				8,077				32,750				7,726
Operating income (loss)			14,796				8,136				486				(640	)			15,073				(8,259	)
INTEREST INCOME			23				-				-				-				-				23
INTEREST EXPENSE			20,830				338				-				-				1,918				18,574
OTHER INCOME, net			(1,721	)			2				-				-				-				(1,723	)
(Loss) income before (benefit from) provision for income taxes and noncontrolling interest in income of subsidiaries			(4,290	)			7,796				486				(640	)			13,155				(25,087	)
(BENEFIT FROM) PROVISION FOR INCOME TAXES			(1,311	)			1,993				113				2				3,298				(6,717	)
CONSOLIDATED NET (LOSS) INCOME			(2,979	)			5,803				373				(642	)			9,857				(18,370	)
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS			125				-				-				-				-				125
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS		$	(3,104	)		$	5,803			$	373			$	(642	)		$	9,857			$	(18,495	)
Adjusted EBITDA2		$	27,716			$	9,267			$	577			$	99			$	21,669			$	(3,896	)

-MORE-

 

PAGE 9 -- URBAN ONE, INC. REPORTS FIRST QUARTER RESULTS

 

Urban One, Inc. will hold a conference call to discuss its results for the first fiscal quarter of 2020. The conference call is scheduled for Thursday, May 28, 2020 at 10:00 a.m. EDT. To participate on this call, U.S. callers may dial toll-free 1-844-291-6362; international callers may dial direct (+1) 234-720-6995. The Access Code is 3638640.

A replay of the conference call will be available from 1:00 p.m. EDT May 28, 2020 until 12:00 a.m. EDT June 03, 2020. 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 4774576.

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 March 2020, Urban One currently owns and/or operates 61 broadcast stations (including all HD stations, translator stations and the low power television stations we operate) branded under the tradename "Radio One" in 14 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: