8-K
Urban One, Inc. (UONE)
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant To Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 3, 2022
URBAN ONE, INC.
(Exact name of Registrant as specified in its charter)
| Delaware | 0-25969 | 52-1166660 |
|---|---|---|
| (State or Other Jurisdiction | (Commission File No.) | (IRS Employer |
| of Incorporation) | | Identification No.) |
1010 Wayne Avenue
14th Floor
Silver Spring , Maryland **** 20910
( 301 ) 429-3200
(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Class | **** | Trading Symbol | **** | Name of Exchange on which Registered |
|---|---|---|---|---|
| Class A Common Stock, $.001 Par Value | | UONE | | NASDAQ Capital Market |
| Class D Common Stock, $.001 Par Value | | UONEK | | NASDAQ Capital Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 under the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
ITEM 2.02. Results of Operations and Financial Condition.
On March 3, 2022, Urban One, Inc. (the "Company") issued a press release setting forth the results for its quarter ended December 31, 2021. A copy of the press release is attached as Exhibit 99.1.
ITEM 8.01 Other Events.
During the course of the Company’s earnings call, Peter D. Thompson, the Company’s Chief Financial Officer noted that he anticipated asking the Company’s Board of Directors for authorization for a stock buyback program in connection with the Company’s capital allocation strategy. Mr. Thompson did not provide any further details about any such authorization request such as timing or amount and any such request would require approval of the Company’s Board of Directors. Further, Mr. Thompson noted that the Company’s capital allocation strategy could involve alternative investment opportunities such as acquisitions, debt repurchases or other investments. If approved by the Company’s Board of Directors, the timing and actual number of shares repurchased would depend on a variety of factors, including price, general business and market conditions. Any such repurchase program would not obligate the Company to acquire any particular amount of shares, and the repurchase program could be suspended or discontinued at any time at the Company’s discretion.
Also during the course of the Company’s earnings call, Alfred C. Liggins, III, the Company’s Chief Executive Officer noted the Company continued to pursue the ONE Casino + Resort project in Richmond, Virginia. Mr. Liggins noted that as the Company continued to pursue a second referendum in the City of Richmond there were certain efforts to block or delay a second referendum within the Virginia legislature. Mr. Liggins then noted that Pacific Peninsula Entertainment (“P2E”), the Company’s partner in the project, had entered into an agreement to sell certain of its assets, including its partnership with the Company in the ONE Casino + Resort project, to Churchill Downs, Inc., a gaming operator that also owns the Kentucky Derby. Mr. Liggins noted that he viewed the P2E sale positively but that the future of the project was currently subject to the legislative and budgeting process in the Virginia General Assembly.
On March 7, 2022, the Board of the Company authorized and approved a share repurchase program for up to $25 million of the currently outstanding shares of the Company’s Class A and/or Class D common stock over a period of 24 months. Under the stock repurchase program, the Company intends to repurchase shares through open market purchases, privately-negotiated transactions, block purchases or otherwise in accordance with applicable federal securities laws, including Rule 10b-18 of the Securities Exchange Act of 1934 (the “Exchange Act”). The Board also approved a repurchase program for up to $50 million of the Company's outstanding 7.375% Senior Secured Notes due 2028.
The Board also authorized the Company to enter into written trading plans under Rule 10b5-1 of the Exchange Act. Adopting a trading plan that satisfies the conditions of Rule 10b5-1 allows a company to repurchase its shares/bonds at times when it might otherwise be prevented from doing so due to self-imposed trading blackout periods or pursuant to insider trading laws. Under any Rule 10b5-1 trading plan, the Company’s third-party broker, subject to Securities and Exchange Commission regulations regarding certain price, market, volume and timing constraints, would have authority to purchase the Company’s common stock and/or bonds in accordance with the terms of the plan. The Company may from time to time enter into Rule 10b5-1 trading plans to facilitate the repurchase of its common stock or bonds pursuant to its repurchase programs.
The Company’s share repurchase programs do not obligate it to acquire any specific number of shares or bonds. The Company cannot predict when or if it will repurchase any shares of common stock or bonds as such repurchase programs will depend on a number of factors, including constraints specified in any Rule 10b5-1 trading plans, price, general business and market conditions, and alternative investment opportunities. Information regarding share repurchases will be available in the Company’s periodic reports on Form 10-Q and 10-K filed with the Securities and Exchange Commission as required by the applicable rules of the Exchange Act.
Forward Looking Statements
The Company cautions you certain of the statements in this Form 8-K or in its press release may represent “forward-looking statements” as defined in Section 27A of the United States Securities Act of 1933, as amended, and Section 21E of the United States Securities Exchange Act of 1934, as amended. These statements are based on assumptions believed by the Company to be reasonable and speak only as of the date on which such statements are made. Without limiting the generality of the foregoing, words such as “expect,” “believe,” “anticipate,” “intend,” “plan,” “project,” “will” or “estimate,” or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements. Except as required by law, the Company undertakes no obligation to update such statements to reflect events or circumstances arising after such date and cautions investors not to place undue reliance on any such forward-looking statements. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those described in the statements based on a number of factors, including but not limited to the following: the extent of the impact of the COVID-19 global pandemic or any other epidemic, disease outbreak, or public health emergency, including the duration, spread, severity, and any recurrence of the COVID-19 pandemic, the duration and scope of related government orders and restrictions, the impact on our employees, economic, public health, and political conditions that impact consumer confidence and spending, including the impact of COVID-19 and other health epidemics or pandemics on the global economy; the rapidly evolving nature of the COVID-19 pandemic and related containment measures, including changes in unemployment rate; the impact of political protests and curfews imposed by state and local governments; the cost and availability of capital or credit facility borrowings; the ability to obtain equity financing; general market conditions; the adequacy of cash flows or available debt resources to fund operations; and other risk factors described from time to time in the Company’s Form 10-K, Form 10-Q, and Form 8-K reports (including all amendments to those reports).
ITEM 9.01. Financial Statements and Exhibits.
(c) Exhibits
| Exhibit Number | **** | Description |
|---|---|---|
| | | |
| 99.1 | | Press release dated March 3, 2022: Urban One, Inc. Reports Fourth Quarter Results. |
| 104 | | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| | |
|---|---|
| | URBAN ONE, INC. |
| | |
| | /s/ Peter D. Thompson |
| March 07, 2022 | Peter D. Thompson |
| | Chief Financial Officer and Principal Accounting Officer |
Exhibit 99.1
| | |
|---|---|
| NEWS RELEASE | |
| March 3, 2022 | Contact: Peter D. Thompson, EVP and CFO |
| FOR IMMEDIATE RELEASE | (301) 429-4638 |
| Washington, DC | |
URBAN ONE, INC. REPORTS FOURTH QUARTER RESULTS
Washington, DC : - Urban One, Inc. (NASDAQ: UONEK and UONE) today reported its results for the quarter ended December 31, 2021. Net revenue was approximately $131.0 million, an increase of 15.3% from the same period in 2020. The Company reported operating income of approximately $22.4 million for the three months ended December 31, 2021, compared to approximately $34.5 million for the three months ended December 31, 2020. Broadcast and digital operating income^1^ was approximately $44.1 million, a decrease of 14.9% from the same period in 2020. Net income was approximately $6.6 million or $0.13 per share (basic) compared to approximately $26.4 million or $0.58 per share (basic) for the same period in 2020. Adjusted EBITDA^2^was approximately $32.5 million for the three months ended December 31, 2021, compared to approximately $41.7 million for the same period in 2020.
Alfred C. Liggins, III, Urban One’s CEO and President stated, “We had another very strong quarter, with revenue exceeding expectations, allowing us to significantly exceed our previous Adjusted EBITDA guidance for the year of $140-$145 million. There was some noise in the expenses, predominantly related to returning events, TV programming amortization and annual staff bonuses, all of which were anticipated and factored into our guidance. Demand for our audience remains extremely robust across the platform, and, excluding political, advertising revenues for the quarter were up double-digit percentages in all of our operating segments. Digital revenues were up 42.9%, and we exceeded $50 million in annual digital revenue for the first time. Cable TV revenues were up 43.6% helped by strong upfront demand and higher average unit rates across both TV One and Cleo. Looking back at pre-pandemic revenues, when we aggregate our radio broadcasting, syndication, events and digital operations, net revenues were up 25% compared to Q4 2019, and Adjusted EBITDA up 21%. We expect to continue to exceed pre-pandemic revenues and Adjusted EBITDA in 2022, and this is supported by first quarter 2022 core radio pacings up low double digits, and up mid-teens including digital revenues.”
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PAGE 2 -- URBAN ONE, INC. REPORTS FOURTH QUARTER RESULTS RESULTS OF OPERATIONS
| | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | Three Months Ended December 31, | | Year Ended December 31, | ||||||||
| | | 2021 | | 2020 | | 2021 | | 2020 | ||||
| STATEMENT OF OPERATIONS | | (unaudited) | | (unaudited) | ||||||||
| | (in thousands, except share data) | (in thousands, except share data) | ||||||||||
| | | | | | | | | | | | ||
| NET REVENUE | | $ | 130,966 | | $ | 113,542 | | $ | 441,462 | | $ | 376,337 |
| OPERATING EXPENSES | | | | | ||||||||
| Programming and technical, excluding stock-based compensation | | 38,243 | | 28,129 | | 119,072 | | 103,813 | ||||
| Selling, general and administrative, excluding stock-based compensation | | 48,588 | | 33,524 | | 143,156 | | 108,633 | ||||
| Corporate selling, general and administrative, excluding stock-based compensation | | 19,293 | | 12,495 | | 50,837 | | 35,860 | ||||
| Stock-based compensation | | 87 | | 839 | | 565 | | 2,294 | ||||
| Depreciation and amortization | | 2,364 | | 2,322 | | 9,289 | | 9,741 | ||||
| Impairment of long-lived assets | | — | | 1,700 | | — | | 84,400 | ||||
| Total operating expenses | | 108,575 | | 79,009 | | 322,919 | | 344,741 | ||||
| Operating income | | 22,391 | | 34,533 | | 118,543 | | 31,596 | ||||
| INTEREST INCOME | | 33 | | 1 | | 218 | | 213 | ||||
| INTEREST EXPENSE | | 15,908 | | 18,731 | | 65,702 | | 74,507 | ||||
| LOSS ON RETIREMENT OF DEBT | | — | | 2,894 | | 6,949 | | 2,894 | ||||
| OTHER INCOME, net | | (1,968) | | (1,265) | | (8,134) | | (4,547) | ||||
| Income (loss) before provision for (benefit from) income taxes and noncontrolling interest in income of subsidiaries | | 8,484 | | 14,174 | | 54,244 | | (41,045) | ||||
| PROVISION FOR (BENEFIT FROM) INCOME TAXES | | 1,211 | | (12,950) | | 13,577 | | (34,476) | ||||
| CONSOLIDATED NET INCOME (LOSS) | | 7,273 | | 27,124 | | 40,667 | | (6,569) | ||||
| NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | | 670 | | 698 | | 2,315 | | 1,544 | ||||
| CONSOLIDATED NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS | | $ | 6,603 | | $ | 26,426 | | $ | 38,352 | | $ | (8,113) |
| | | | | | | | | | | | | |
| AMOUNTS ATTRIBUTABLE TO COMMON STOCKHOLDERS | | | | | ||||||||
| CONSOLIDATED NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS | | $ | 6,603 | | $ | 26,426 | | $ | 38,352 | | $ | (8,113) |
| | | | | | | | | | | | | |
| Weighted average shares outstanding - basic^3^ | | 51,206,358 | | 45,942,818 | | 50,163,600 | | 45,041,467 | ||||
| Weighted average shares outstanding - diluted^4^ | | 55,084,927 | | 48,054,418 | | 54,136,641 | | 45,041,467 |
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PAGE 3 -- URBAN ONE, INC. REPORTS FOURTH QUARTER RESULTS
| | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | Three Months Ended December 31, | Year Ended December 31, | ||||||||||
| | | 2021 | | 2020 | | 2021 | | 2020 | |||||
| PER SHARE DATA - basic and diluted: | | (unaudited) | | (unaudited) | | (unaudited) | | (unaudited) | |||||
| | (in thousands, except per share data) | (in thousands, except per share data) | |||||||||||
| | | | | | | | | | | | | ||
| Consolidated net income (loss) attributable to common stockholders (basic) | | $ | 0.13 | | $ | 0.58 | | $ | 0.76 | | $ | (0.18) | |
| | | | | | | | | | | | | | |
| Consolidated net income (loss) attributable to common stockholders (diluted) | | $ | 0.12 | | $ | 0.55 | | $ | 0.71 | | $ | (0.18) | |
| | | | | | | | | | | | | | |
| SELECTED OTHER DATA | | | | | | ||||||||
| Broadcast and digital operating income ^1^ | | $ | 44,135 | | $ | 51,889 | | $ | 179,234 | | $ | 163,891 | |
| Broadcast and digital operating income margin (% of net revenue) | | 33.7 | % | 45.7 | % | 40.6 | % | 43.5 | % | ||||
| | | | | | | | | | | | | | |
| Broadcast and digital operating income reconciliation: | | | | | | ||||||||
| | | | | | | | | | | | | | |
| Consolidated net income (loss) attributable to common stockholders | | $ | 6,603 | | $ | 26,426 | | $ | 38,352 | | $ | (8,113) | |
| Add back non-broadcast and digital operating income items included in consolidated net income (loss): | | | | | | ||||||||
| Interest income | | (33) | | (1) | | (218) | | (213) | | ||||
| Interest expense | | 15,908 | | 18,731 | | 65,702 | | 74,507 | | ||||
| Provision for (benefit from) income taxes | | 1,211 | | (12,950) | | 13,577 | | (34,476) | | ||||
| Corporate selling, general and administrative expenses | | 19,293 | | 12,495 | | 50,837 | | 35,860 | | ||||
| Stock-based compensation | | 87 | | 839 | | 565 | | 2,294 | | ||||
| Loss on retirement of debt | | — | | 2,894 | | 6,949 | | 2,894 | | ||||
| Other income, net | | (1,968) | | (1,265) | | (8,134) | | (4,547) | | ||||
| Depreciation and amortization | | 2,364 | | 2,322 | | 9,289 | | 9,741 | | ||||
| Noncontrolling interest in income of subsidiaries | | 670 | | 698 | | 2,315 | | 1,544 | | ||||
| Impairment of long-lived assets | | — | | 1,700 | | — | | 84,400 | | ||||
| Broadcast and digital operating income | | $ | 44,135 | | $ | 51,889 | | $ | 179,234 | | $ | 163,891 | |
| | | | | | | | | | | | | | |
| Adjusted EBITDA^2^ | | $ | 32,487 | | $ | 41,653 | | $ | 150,222 | | $ | 138,018 | |
| | | | | | | | | | | | | | |
| Adjusted EBITDA reconciliation: | | | | | | ||||||||
| | | | | | | | | | | | | | |
| Consolidated net income (loss) attributable to common stockholders | | $ | 6,603 | | $ | 26,426 | | $ | 38,352 | | $ | (8,113) | |
| Interest income | | (33) | | (1) | | (218) | | (213) | | ||||
| Interest expense | | 15,908 | | 18,731 | | 65,702 | | 74,507 | | ||||
| Provision for (benefit from) income taxes | | 1,211 | | (12,950) | | 13,577 | | (34,476) | | ||||
| Depreciation and amortization | | 2,364 | | 2,322 | | 9,289 | | 9,741 | | ||||
| EBITDA | | $ | 26,053 | | $ | 34,528 | | $ | 126,702 | | $ | 41,446 | |
| Stock-based compensation | | 87 | | 839 | | 565 | | 2,294 | | ||||
| Loss on retirement of debt | | — | | 2,894 | | 6,949 | | 2,894 | | ||||
| Other income, net | | (1,968) | | (1,265) | | (8,134) | | (4,547) | | ||||
| Noncontrolling interest in income of subsidiaries | | 670 | | 698 | | 2,315 | | 1,544 | | ||||
| Casino chase costs | | 1,886 | | — | | 6,727 | | — | | ||||
| Employment Agreement Award, incentive plan award expenses and other compensation | | 3,465 | | (47) | | 6,163 | | 2,271 | | ||||
| Contingent consideration from acquisition | | — | | 48 | | 280 | | 46 | | ||||
| Severance-related costs | | 311 | | 654 | | 965 | | 2,800 | | ||||
| Cost method investment income from MGM National Harbor | | 1,983 | | 1,604 | | 7,690 | | 4,870 | | ||||
| Impairment of long-lived assets | | — | | 1,700 | | — | | 84,400 | | ||||
| Adjusted EBITDA | | $ | 32,487 | | $ | 41,653 | | $ | 150,222 | | $ | 138,018 | |
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PAGE 4 -- URBAN ONE, INC. REPORTS FOURTH QUARTER RESULTS
| | | | | | | |
|---|---|---|---|---|---|---|
| | December 31, 2021 | December 31, 2020 | ||||
| | | (unaudited) | | | | |
| | | (in thousands) | ||||
| SELECTED BALANCE SHEET DATA: | | | ||||
| Cash and cash equivalents and restricted cash | | $ | 152,218 | | $ | 73,858 |
| Intangible assets, net | | 780,133 | | 764,858 | ||
| Total assets | | 1,261,108 | | 1,195,487 | ||
| Total debt (including current portion, net of issuance costs) | | 818,616 | | 842,286 | ||
| Total liabilities | | 989,973 | | 995,888 | ||
| Total stockholders' equity | | 254,120 | | 186,898 | ||
| Redeemable noncontrolling interest | | 17,015 | | 12,701 | ||
| | | | | | | |
| | | | | | | |
|---|---|---|---|---|---|---|
| | December 31, 2021 | Applicable Interest Rate | ||||
| | | (in thousands) | | | ||
| SELECTED LEVERAGE DATA: | | | ||||
| 7.375% senior secured notes due February 2028, net of issuance costs of approximately $13.9 million (fixed rate) | | $ | 811,111 | 7.375 | % | |
| PPP Loan | | 7,505 | 1.00 | % |
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.
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PAGE 5 -- URBAN ONE, INC. REPORTS FOURTH QUARTER RESULTS 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 Dallas, Houston and Atlanta. 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.
| | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| | | Three Months Ended December 31, | |||||||||
| | | 2021 | | 2020 | | Change | | % Change | **** | ||
| | | (Unaudited) | | | | | |||||
| | | (in thousands) | | | | | |||||
| Net Revenue: | | | | | |||||||
| Radio Advertising | | $ | 46,211 | | $ | 39,154 | | 18.0 | % | ||
| Political Advertising | | 1,502 | | 15,395 | | (90.2) | % | ||||
| Digital Advertising | | 19,462 | | 13,618 | | 42.9 | % | ||||
| Cable Television Advertising | | 28,951 | | 20,156 | | 43.6 | % | ||||
| Cable Television Affiliate Fees | | 25,620 | | 24,242 | | 5.7 | % | ||||
| Event Revenues & Other | | 9,220 | | 977 | | 843.7 | % | ||||
| | | | | | | | | | | | |
| Net Revenue (as reported) | | $ | 130,966 | | $ | 113,542 | | 15.3 | % |
All values are in US Dollars.
Net revenue increased to approximately $131.0 million for the quarter ended December 31, 2021, from approximately $113.5 million for the same period in 2020. Net revenues from our radio broadcasting segment decreased 11.6% compared to the same period in 2020. The decrease in net revenue in our radio broadcasting segment was primarily due to political revenue that did not return in 2021. Net revenue excluding political, from our radio broadcasting segment increased 15.5% compared to the same period in 2020. We recognized approximately $54.6 million of revenue from our cable television segment during the three months ended December 31, 2021, compared to approximately $45.6 million for the same period in 2020 with increases in both advertising and affiliate sales. We recognized approximately $19.3 million of revenue from our Reach Media segment during the three months ended December 31, 2021, compared to approximately $10.3 million for the same period in 2020. The Fantastic Voyage took place during the fourth quarter of 2021 and Reach Media recognized approximately $7.0 million in revenue from operating the event. Finally, net revenues for our digital segment increased approximately $4.7 million for the three months ended December 31, 2021, compared to the same period in 2020, primarily due to an increase in direct revenues.
Operating expenses, excluding depreciation and amortization, stock-based compensation and impairment of long-lived assets, increased to approximately $106.1 million for the quarter ended December 31, 2021, up 43.1% from the approximately $74.1 million incurred for the comparable quarter in 2020. The overall operating expense increase was driven by higher programming and technical expenses, higher selling, general and administrative expenses and higher corporate selling, general and administrative expenses.
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PAGE 6 -- URBAN ONE, INC. REPORTS FOURTH QUARTER RESULTS During the quarter ended September 30, 2020, we began to reinstate certain cost-cutting measures that were taken during the preliminary phases of the pandemic such as furloughs, layoffs and salary reductions. Continuing throughout 2021, as the economy began to recover, we also reversed certain other expense reduction measures including increasing travel and entertainment expenses, merit raises, marketing spend and programming/production costs, and special event costs. As a result of the continued reopening of the economy and corresponding increases in revenue, we’ve incurred an increase in the following expenses: approximately $5.9 million in employee compensation expenses, $5.8 million in higher program content amortization expense at our cable television segment, $7.1 million in special event costs, $1.4 million in marketing spend, $1.7 million in contract labor, talent costs and consulting fees and $4.2 million in variable expenses. Finally, the increase in corporate selling, general and administrative expenses for the three months ended December 31, 2021, compared to the same period in 2020 is primarily due to an increase in compensation expense of approximately $3.5 million related to the employment agreement award and expenses related to corporate development activities in connection with potential gaming and other similar business activities. The Company has incurred approximately $1.9 million in casino chase costs for the quarter ended December 31, 2021.
Depreciation and amortization expense remained flat at approximately $2.3 million for the quarters ended December 31, 2021 and 2020.
Interest expense decreased to approximately $15.9 million for the quarter ended December 31, 2021, compared to approximately $18.7 million for the quarter ended December 31, 2020. The Company made cash interest payments of $187,000 for the quarter ended December 31, 2021, compared to cash interest payments of approximately $23.4 million on its outstanding debt for the quarter ended December 31, 2020. As previously announced, on January 25, 2021, the Company closed on new senior secured notes (the “2028 Notes”). The proceeds from the 2028 Notes were used to prepay in full: (1) the 2017 Credit Facility; (2) the 2018 Credit Facility; (3) the MGM National Harbor Loan; (4) the remaining amounts of our 7.375% Notes; and (5) our 8.75% Notes that were issued in the November 2020 Exchange Offer.
For the three months ended December 31, 2021, we recorded a provision for income taxes of approximately $1.2 million on pre-tax income from continuing operations of approximately $8.5 million, which results in a tax rate of 14.3%. For the three months ended December 31, 2020, we recorded a benefit from income taxes of approximately $13.0 million on pre-tax income from continuing operations of approximately $14.2 million, which results in a tax rate of (91.4)%. The Company paid $360,000 in taxes for the quarter ended December 31, 2021, and received a net tax refund of $395,000 for the quarter ended December 31, 2020.
Other income, net, was approximately $2.0 million and $1.3 million for the three months ended December 31, 2021 and 2020, respectively. We recognized other income in the amount of approximately $2.0 million and $1.6 million for the three months ended December 31, 2021 and 2020, respectively, related to our MGM investment.
Other pertinent financial information includes capital expenditures of approximately $2.1 million and $622,000 for the quarters ended December 31, 2021 and 2020, respectively.
During the three months ended December 31, 2021 and 2020, the Company did not repurchase any shares of Class A or Class D common stock.
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 December 31, 2021, the Company executed a Stock Vest Tax Repurchase of 2,530 shares of Class D Common Stock in the amount of $9,000. During the three months ended December 31, 2020, the Company executed a Stock Vest Tax Repurchase of 4,225 shares of Class D Common Stock in the amount of $5,000. -MORE-
PAGE 6 -- URBAN ONE, INC. REPORTS FOURTH QUARTER RESULTS Supplemental Financial Information:
For comparative purposes, the following more detailed, unaudited statements of operations for the three months and year ended December 31, 2021 and 2020 are included.
-MORE-
PAGE 7 -- URBAN ONE, INC. REPORTS FOURTH QUARTER RESULTS
| | | | | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | Three Months Ended December 31, 2021 | ||||||||||||||||
| | | (in thousands, unaudited) | ||||||||||||||||
| | | | | | Radio | | Reach | | | | | Cable | | Corporate/ | ||||
| | Consolidated | Broadcasting | Media | Digital | Television | Eliminations | ||||||||||||
| STATEMENT OF OPERATIONS: | | | | | | | ||||||||||||
| | | | | | | | | | | | | | | | | | | |
| NET REVENUE | | $ | 130,966 | | $ | 38,453 | | $ | 19,268 | | $ | 19,472 | | $ | 54,631 | | $ | (858) |
| OPERATING EXPENSES: | | | | | | | ||||||||||||
| Programming and technical | | 38,243 | | 9,947 | | 4,733 | | 4,246 | | 19,695 | | (378) | ||||||
| Selling, general and administrative | | 48,588 | | 17,243 | | 9,145 | | 12,003 | | 10,661 | | (464) | ||||||
| Corporate selling, general and administrative | | 19,293 | | — | | 1,576 | | 1 | | 2,935 | | 14,781 | ||||||
| Stock-based compensation | | 87 | | 6 | | — | | — | | 37 | | 44 | ||||||
| Depreciation and amortization | | 2,364 | | 800 | | 48 | | 319 | | 939 | | 258 | ||||||
| Total operating expenses | | 108,575 | | 27,996 | | 15,502 | | 16,569 | | 34,267 | | 14,241 | ||||||
| Operating income (loss) | | 22,391 | | 10,457 | | 3,766 | | 2,903 | | 20,364 | | (15,099) | ||||||
| INTEREST INCOME | | 33 | | — | | — | | — | | — | | 33 | ||||||
| INTEREST EXPENSE | | 15,908 | | 44 | | — | | 79 | | 1,919 | | 13,866 | ||||||
| OTHER (INCOME) EXPENSE, net | | (1,968) | | 28 | | — | | — | | — | | (1,996) | ||||||
| Income (loss) before provision for (benefit from) income taxes and noncontrolling interest in income of subsidiaries | | 8,484 | | 10,385 | | 3,766 | | 2,824 | | 18,445 | | (26,936) | ||||||
| PROVISION FOR (BENEFIT FROM) INCOME TAXES | | 1,211 | | 5,166 | | 1,026 | | — | | 3,415 | | (8,396) | ||||||
| CONSOLIDATED NET INCOME (LOSS) | | 7,273 | | 5,219 | | 2,740 | | 2,824 | | 15,030 | | (18,540) | ||||||
| NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | | 670 | | — | | — | | — | | — | | 670 | ||||||
| NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS | | $ | 6,603 | | $ | 5,219 | | $ | 2,740 | | $ | 2,824 | | $ | 15,030 | | $ | (19,210) |
| | | | | | | | | | | | | | | | | | | |
| Adjusted EBITDA^2^ | | $ | 32,487 | | $ | 11,506 | | $ | 3,816 | | $ | 3,222 | | $ | 21,340 | | $ | (7,397) |
PAGE 8 -- URBAN ONE, INC. REPORTS FOURTH QUARTER RESULTS
| | | | | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | Three Months Ended December 31, 2020 | |||||||||||||||||
| | | (in thousands, unaudited) | ||||||||||||||||
| | | | | | Radio | | Reach | | | | | Cable | | Corporate/ | ||||
| | Consolidated | Broadcasting | Media | Digital | Television | Eliminations | ||||||||||||
| STATEMENT OF OPERATIONS: | | | | | | | ||||||||||||
| | | | | | | | | | | | | | | | | | | |
| NET REVENUE | | $ | 113,542 | | $ | 43,507 | | $ | 10,287 | | $ | 14,755 | | $ | 45,580 | | $ | (587) |
| OPERATING EXPENSES: | | | | | | | ||||||||||||
| Programming and technical | | 28,129 | | 7,805 | | 3,823 | | 3,154 | | 13,694 | | (347) | ||||||
| Selling, general and administrative | | 33,524 | | 15,770 | | 1,881 | | 6,674 | | 9,420 | | (221) | ||||||
| Corporate selling, general and administrative | | 12,495 | | — | | 1,205 | | 1 | | 2,609 | | 8,680 | ||||||
| Stock-based compensation | | 839 | | 104 | | — | | — | | 51 | | 684 | ||||||
| Depreciation and amortization | | 2,322 | | 756 | | 59 | | 344 | | 932 | | 231 | ||||||
| Impairment of long-lived assets | | 1,700 | | 1,700 | | — | | — | | — | | — | ||||||
| Total operating expenses | | 79,009 | | 26,135 | | 6,968 | | 10,173 | | 26,706 | | 9,027 | ||||||
| Operating income (loss) | | 34,533 | | 17,372 | | 3,319 | | 4,582 | | 18,874 | | (9,614) | ||||||
| INTEREST INCOME | | 1 | | — | | — | | — | | — | | 1 | ||||||
| INTEREST EXPENSE | | 18,731 | | 29 | | — | | 79 | | 1,919 | | 16,704 | ||||||
| LOSS ON RETIREMENT OF DEBT | | 2,894 | | — | | — | | — | | — | | 2,894 | ||||||
| OTHER (INCOME) EXPENSE, net | | (1,265) | | 352 | | — | | — | | — | | (1,617) | ||||||
| Income (loss) before (benefit from) provision for income taxes and noncontrolling interest in income of subsidiaries | | 14,174 | | 16,991 | | 3,319 | | 4,503 | | 16,955 | | (27,594) | ||||||
| (BENEFIT FROM) PROVISION FOR INCOME TAXES | | (12,950) | | 3,375 | | 431 | | — | | (416) | | (16,340) | ||||||
| CONSOLIDATED NET INCOME (LOSS) | | 27,124 | | 13,616 | | 2,888 | | 4,503 | | 17,371 | | (11,254) | ||||||
| NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | | 698 | | — | | — | | — | | — | | 698 | ||||||
| NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS | | $ | 26,426 | | $ | 13,616 | | $ | 2,888 | | $ | 4,503 | | $ | 17,371 | | $ | (11,952) |
| | | | | | | | | | | | | | | | | | | |
| Adjusted EBITDA^2^ | | $ | 41,653 | | $ | 20,123 | | $ | 3,712 | | $ | 5,096 | | $ | 19,857 | | $ | (7,135) |
PAGE 9 -- URBAN ONE, INC. REPORTS FOURTH QUARTER RESULTS
| | | | | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | Year Ended December 31, 2021 | ||||||||||||||||
| | | (in thousands, unaudited) | ||||||||||||||||
| | | | | | Radio | | Reach | | | | | Cable | | Corporate/ | ||||
| | Consolidated | Broadcasting | Media | Digital | Television | Eliminations | ||||||||||||
| STATEMENT OF OPERATIONS: | | | | | | | ||||||||||||
| | | | | | | | | | | | | | | | | | | |
| NET REVENUE | | $ | 441,462 | | $ | 140,246 | | $ | 46,437 | | $ | 59,937 | | $ | 198,180 | | $ | (3,338) |
| OPERATING EXPENSES: | | | | | | | ||||||||||||
| Programming and technical | | 119,072 | | 36,243 | | 14,965 | | 12,307 | | 57,016 | | (1,459) | ||||||
| Selling, general and administrative | | 143,156 | | 61,969 | | 14,491 | | 30,388 | | 38,166 | | (1,858) | ||||||
| Corporate selling, general and administrative | | 50,837 | | — | | 3,455 | | 3 | | 7,756 | | 39,623 | ||||||
| Stock-based compensation | | 565 | | 38 | | — | | — | | 111 | | 416 | ||||||
| Depreciation and amortization | | 9,289 | | 3,135 | | 208 | | 1,264 | | 3,738 | | 944 | ||||||
| Total operating expenses | | 322,919 | | 101,385 | | 33,119 | | 43,962 | | 106,787 | | 37,666 | ||||||
| Operating income (loss) | | 118,543 | | 38,861 | | 13,318 | | 15,975 | | 91,393 | | (41,004) | ||||||
| INTEREST INCOME | | 218 | | — | | — | | — | | — | | 218 | ||||||
| INTEREST EXPENSE | | 65,702 | | 174 | | — | | 316 | | 7,676 | | 57,536 | ||||||
| LOSS ON RETIREMENT OF DEBT | | 6,949 | | — | | — | | — | | — | | 6,949 | ||||||
| OTHER INCOME, net | | (8,134) | | (392) | | — | | — | | — | | (7,742) | ||||||
| Income (loss) before provision for (benefit from) income taxes and noncontrolling interest in income of subsidiaries | | 54,244 | | 39,079 | | 13,318 | | 15,659 | | 83,717 | | (97,529) | ||||||
| PROVISION FOR (BENEFIT FROM) INCOME TAXES | | 13,577 | | 12,665 | | 3,573 | | — | | 20,815 | | (23,476) | ||||||
| CONSOLIDATED NET INCOME (LOSS) | | 40,667 | | 26,414 | | 9,745 | | 15,659 | | 62,902 | | (74,053) | ||||||
| NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | | 2,315 | | — | | — | | — | | — | | 2,315 | ||||||
| NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS | | $ | 38,352 | | $ | 26,414 | | $ | 9,745 | | $ | 15,659 | | $ | 62,902 | | $ | (76,368) |
| | | | | | | | | | | | | | | | | | | |
| Adjusted EBITDA^2^ | | $ | 150,222 | | $ | 42,518 | | $ | 13,587 | | $ | 17,571 | | $ | 95,358 | | $ | (18,812) |
PAGE 10 -- URBAN ONE, INC. REPORTS FOURTH QUARTER RESULTS
| | | | | | | | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | Year Ended December 31, 2020 | ||||||||||||||||
| | | (in thousands, unaudited) | ||||||||||||||||
| | | | | | Radio | | Reach | | | | | Cable | | Corporate/ | ||||
| | Consolidated | Broadcasting | Media | Digital | Television | Eliminations | ||||||||||||
| STATEMENT OF OPERATIONS: | | | | | | | ||||||||||||
| | | | | | | | | | | | | | | | | | | |
| NET REVENUE | | $ | 376,337 | | $ | 130,573 | | $ | 30,996 | | $ | 35,599 | | $ | 181,583 | | $ | (2,414) |
| OPERATING EXPENSES: | | | | | | | ||||||||||||
| Programming and technical | | 103,813 | | 33,410 | | 12,967 | | 11,056 | | 47,856 | | (1,476) | ||||||
| Selling, general and administrative | | 108,633 | | 57,325 | | 6,205 | | 18,519 | | 27,443 | | (859) | ||||||
| Corporate selling, general and administrative | | 35,860 | | — | | 3,145 | | 27 | | 6,196 | | 26,492 | ||||||
| Stock-based compensation | | 2,294 | | 317 | | 59 | | 6 | | 51 | | 1,861 | ||||||
| Depreciation and amortization | | 9,741 | | 3,022 | | 237 | | 1,592 | | 3,749 | | 1,141 | ||||||
| Impairment of long-lived assets | | 84,400 | | 84,400 | | — | | — | | — | | — | ||||||
| Total operating expenses | | 344,741 | | 178,474 | | 22,613 | | 31,200 | | 85,295 | | 27,159 | ||||||
| Operating income (loss) | | 31,596 | | (47,901) | | 8,383 | | 4,399 | | 96,288 | | (29,573) | ||||||
| INTEREST INCOME | | 213 | | — | | — | | — | | 178 | | 35 | ||||||
| INTEREST EXPENSE | | 74,507 | | 32 | | — | | 317 | | 7,675 | | 66,483 | ||||||
| LOSS ON RETIREMENT OF DEBT | | 2,894 | | — | | — | | — | | — | | 2,894 | ||||||
| OTHER (INCOME) EXPENSE, net | | (4,547) | | 352 | | — | | — | | — | | (4,899) | ||||||
| (Loss) income before (benefit from) provision for income taxes and noncontrolling interest in income of subsidiaries | | (41,045) | | (48,285) | | 8,383 | | 4,082 | | 88,791 | | (94,016) | ||||||
| (BENEFIT FROM) PROVISION FOR INCOME TAXES | | (34,476) | | (8,318) | | 1,752 | | — | | 17,555 | | (45,465) | ||||||
| CONSOLIDATED NET (LOSS) INCOME | | (6,569) | | (39,967) | | 6,631 | | 4,082 | | 71,236 | | (48,551) | ||||||
| NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | | 1,544 | | — | | — | | — | | — | | 1,544 | ||||||
| NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS | | $ | (8,113) | | $ | (39,967) | | $ | 6,631 | | $ | 4,082 | | $ | 71,236 | | $ | (50,095) |
| | | | | | | | | | | | | | | | | | | |
| Adjusted EBITDA^2^ | | $ | 138,018 | | $ | 41,430 | | $ | 9,313 | | $ | 6,378 | | $ | 100,192 | | $ | (19,295) |
PAGE 11 -- URBAN ONE, INC. REPORTS FOURTH QUARTER RESULTS Urban One, Inc. will hold a conference call to discuss its results for the fourth fiscal quarter of 2021. The conference call is scheduled for Thursday, March 03, 2022 at 10:00 a.m. EST. To participate on this call, U.S. callers may dial toll-free 1-877-226-8215; international callers may dial direct (+1) 409-207-6982. The Access Code is 7494333.
A replay of the conference call will be available from 1:00 p.m. EST March 03, 2022 until 12:00 a.m. EST March 07, 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 2519146.
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 December 31, 2021, we owned and/or operated 64 independently formatted, revenue producing broadcast stations (including 54 FM or AM stations, 8 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 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, casino chase 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.
PAGE 11 -- URBAN ONE, INC. REPORTS FOURTH QUARTER RESULTS 3For the three months ended December 31, 2021 and 2020, Urban One had 51,206,358 and 45,942,818 shares of common stock outstanding on a weighted average basis (basic), respectively. For the year ended December 31, 2021 and 2020, Urban One had 50,163,600 and 45,041,467 shares of common stock outstanding on a weighted average basis (basic), respectively.
4For the three months ended December 31, 2021 and 2020, Urban One had 55,084,927 and 48,054,418 shares of common stock outstanding on a weighted average basis (fully diluted for outstanding stock awards), respectively. For the year ended December 31, 2021 and 2020, Urban One had 54,136,641 and 45,041,467 shares of common stock outstanding on a weighted average basis (fully diluted for outstanding stock awards), respectively.