Urban One, Inc 10-Q for FY2022 Q1

Urban One, Inc. (UONE)

10-Q 2022-05-09 For: 2022-03-31

Added on April 09, 2026

About this 10-Q

Urban One, Inc filed this 10-Q on May 9, 2022, covering the quarter ended March 31, 2022 (FY2022 Q1).

Headline figures

Quarter ended March 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $112.35M; up 22.9% from $91.44M a year earlier
Net income: $16.37M; up 233742.9% from net income of $7000 a year earlier
Diluted EPS: $0.30; compared with $0.00 a year earlier

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Delaware	52-1166660
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)


Title of each class:	Trading Symbol(s)	Name of each exchange on which registered:
Class A Common Stock	UONE	NASDAQ Stock Market
Class D Common Stock	UONEK	NASDAQ Stock Market

Large accelerated filer ☐	Accelerated filer ☒
Non-accelerated filer ☐	Smaller reporting company ☒
	Emerging growth company ☐


Class		Outstanding at April 29, 2022
Class A Common Stock, $.001 Par Value		9,104,916
Class B Common Stock, $.001 Par Value		2,861,843
Class C Common Stock, $.001 Par Value		2,045,016
Class D Common Stock, $.001 Par Value		37,360,666


		Page
	PART I. FINANCIAL INFORMATION
Item 1.	Consolidated Statements of Operations for the Three Months Ended March 31, 2022 and 2021 (Unaudited)	5
	Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2022 and 2021 (Unaudited)	6
	Consolidated Balance Sheets as of March 31, 2022 (Unaudited) and December 31, 2021	7
	Consolidated Statement of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2022 (Unaudited)	8
	Consolidated Statement of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2021 (Unaudited)	9
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2022 and 2021 (Unaudited)	10
	Notes to Consolidated Financial Statements (Unaudited)	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	35
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	51
Item 4.	Controls and Procedures	51

	PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	52
Item 1A.	Risk Factors	52
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	52
Item 3.	Defaults Upon Senior Securities	52
Item 4.	Mine Safety Disclosures	52
Item 5.	Other Information	52
Item 6.	Exhibits	53
	SIGNATURES	54


	Three Months Ended March 31,
	2022		2021

	(Unaudited)
	(In thousands, except share data)

NET REVENUE	$	112,349	$	91,440
OPERATING EXPENSES:
Programming and technical including stock-based compensation of $0 and $6, respectively		28,518		25,096
Selling, general and administrative, including stock-based compensation of $0 and $31, respectively		35,428		29,987
Corporate selling, general and administrative, including stock-based compensation of $124 and $216, respectively		9,460		10,336
Depreciation and amortization		2,405		2,264
Total operating expenses		75,811		67,683
Operating income		36,538		23,757
INTEREST INCOME		59		4
INTEREST EXPENSE		15,927		18,045
LOSS ON RETIREMENT OF DEBT		—		6,949
OTHER INCOME, net		(1,986)		(1,684)
Income before provision for (benefit from) income taxes and noncontrolling interests in income of subsidiaries		22,656		451
PROVISION FOR (BENEFIT FROM) INCOME TAXES		5,586		(10)
CONSOLIDATED NET INCOME		17,070		461
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS		701		454
CONSOLIDATED NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	16,369	$	7

BASIC NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS
Net income attributable to common stockholders	$	0.32	$	0.00

DILUTED NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS
Net income attributable to common stockholders	$	0.30	$	0.00

WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic		51,182,831		48,463,289
Diluted		55,097,781		49,053,650


	As of
	March 31, 2022		December 31, 2021
	(Unaudited)
	(In thousands, except share data)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	146,393	$	132,245
Restricted cash		19,973		19,973
Trade accounts receivable, net of allowance for doubtful accounts of $8,747 and $8,743, respectively		113,687		127,446
Prepaid expenses		3,478		2,967
Current portion of content assets		34,215		25,883
Other current assets		8,397		4,760
Total current assets		326,143		313,274
CONTENT ASSETS, net		59,644		60,155
PROPERTY AND EQUIPMENT, net		26,243		26,291
GOODWILL		223,402		223,402
RIGHT OF USE ASSETS		36,302		38,044
RADIO BROADCASTING LICENSES		505,148		505,148
OTHER INTANGIBLE ASSETS, net		63,727		50,159
OTHER ASSETS		44,026		44,635
Total assets	$	1,284,635	$	1,261,108
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	11,997	$	14,588
Accrued interest		10,266		25,458
Accrued compensation and related benefits		6,835		10,960
Current portion of content payables		24,946		18,972
Current portion of lease liabilities		10,033		10,072
Other current liabilities		35,660		26,421
Total current liabilities		99,737		106,471
LONG-TERM DEBT, net of current portion, original issue discount and issuance costs		819,049		818,616
CONTENT PAYABLES, net of current portion		3,952		2,865
LONG-TERM LEASE LIABILITIES		29,276		31,228
OTHER LONG-TERM LIABILITIES		36,243		28,320
DEFERRED TAX LIABILITIES, net		8,059		2,473
Total liabilities		996,316		989,973
COMMITMENTS AND CONTINGENCIES
REDEEMABLE NONCONTROLLING INTERESTS		17,755		17,015

STOCKHOLDERS’ EQUITY:
Convertible preferred stock, $.001 par value, 1,000,000 shares authorized; no shares outstanding at March 31, 2022 and December 31, 2021		—		—
Common stock — Class A, $.001 par value, 30,000,000 shares authorized; 9,104,916 and 9,104,916 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively		9		9
Common stock — Class B, $.001 par value, 150,000,000 shares authorized; 2,861,843 shares issued and outstanding as of March 31, 2022 and December 31, 2021		3		3
Common stock — Class C, $.001 par value, 150,000,000 shares authorized; 2,045,016 and 2,045,016 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively		2		2
Common stock — Class D, $.001 par value, 150,000,000 shares authorized; 37,328,975 and 37,324,737 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively		37		37
Additional paid-in capital		1,020,711		1,020,636
Accumulated deficit		(750,198)		(766,567)
Total stockholders’ equity		270,564		254,120
Total liabilities, redeemable noncontrolling interests and stockholders’ equity	$	1,284,635	$	1,261,108


	Convertible		Common		Common		Common		Common		Additional				Total
	Preferred		Stock		Stock		Stock		Stock		Paid-In		Accumulated		Stockholders’
	Stock		Class A		Class B		Class C		Class D		Capital		Deficit		Equity

	(In thousands, except share data)
BALANCE, as of December 31, 2021	$	—	$	9	$	3	$	2	$	37	$	1,020,636	$	(766,567)	$	254,120
Consolidated net income		—		—		—		—		—		—		16,369		16,369
Stock-based compensation expense		—		—		—		—		—		124		—		124
Repurchase of 2,649 shares of Class D common stock												(10)				(10)
Adjustment of redeemable noncontrolling interests to estimated redemption value		—		—		—		—		—		(39)		—		(39)
BALANCE, as of March 31, 2022	$	—	$	9	$	3	$	2	$	37	$	1,020,711	$	(750,198)	$	270,564


	Three Months Ended
	March 31,
	2022		2021

	(Unaudited)
	(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Consolidated net income	$	17,070	$	461

Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization		2,405		2,264
Amortization of debt financing costs		501		824
Amortization of content assets		10,532		8,298
Amortization of launch assets		652		334
Bad debt expense		311		283
Deferred income taxes		5,586		(10)
Amortization of right of use assets		2,132		1,875
Non-cash lease liability expense		1,043		1,154
Non-cash interest expense		—		158
Stock-based compensation		124		253
Non-cash fair value adjustment of Employment Agreement Award		579		597
Loss on retirement of debt		—		6,949

Effect of change in operating assets and liabilities, net of assets acquired:
Trade accounts receivable		13,448		11,380
Prepaid expenses and other current assets		(592)		18
Other assets		(216)		(1,100)
Accounts payable		(2,591)		(2,098)
Accrued interest		(15,192)		3,187
Accrued compensation and related benefits		(4,125)		(6,378)
Other liabilities		(4,641)		(2,050)
Payments for content assets		(11,292)		(12,106)
Net cash flows provided by operating activities		15,734		14,293
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(1,576)		(804)
Net cash flows used in investing activities		(1,576)		(804)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of 2017 credit facility		—		(317,332)
Proceeds from issuance of Class A common stock, net of fees		—		12,125
Repayment of 2018 credit facility		—		(129,935)
Repurchase of common stock		(10)		(872)
Proceeds from 2028 Notes		—		825,000
Debt refinancing costs		—		(11,157)
Repayment of MGM National Harbor Loan		—		(57,889)
Repayment of 7.375% Notes		—		(2,984)
Repayment of 8.75% Notes		—		(347,016)
Net cash flows used in financing activities		(10)		(30,060)
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		14,148		(16,571)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period		152,218		73,858
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period	$	166,366	$	57,287

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for:
Interest	$	30,619	$	13,876
Income taxes, net of refunds	$	2	$	(32)

NON-CASH OPERATING, FINANCING AND INVESTING ACTIVITIES:
Right of use asset and lease liability additions	$	435	$	1,351
Non-cash launch addition	$	18,750	$	—
Adjustment of redeemable noncontrolling interests to estimated redemption value	$	39	$	(420)


	March 31, 2022		December 31, 2021		March 31, 2021
	(Unaudited)				(Unaudited)
	(In thousands)
Contract assets:
Unbilled receivables	$	7,212	$	10,735	$	4,557

Contract liabilities:
Customer advances and unearned income	$	6,934	$	7,494	$	5,979
Reserve for audience deficiency		5,505		6,020		4,610
Unearned event income		—		—		5,735


	Total		Level 1		Level 2		Level 3

	(Unaudited)
	(In thousands)
As of March 31, 2022
Liabilities subject to fair value measurement:
Employment agreement award (a)	$	28,772		—		—	$	28,772
Total	$	28,772	$	—	$	—	$	28,772

Mezzanine equity subject to fair value measurement:
Redeemable noncontrolling interests (b)	$	17,755	$	—	$	—	$	17,755

As of December 31, 2021
Liabilities subject to fair value measurement:
Employment agreement award (a)	$	28,193		—		—	$	28,193
Total	$	28,193	$	—	$	—	$	28,193

Mezzanine equity subject to fair value measurement:
Redeemable noncontrolling interests (b)	$	17,015	$	—	$	—	$	17,015


	Employment		Redeemable
	Agreement		Noncontrolling
	Award		Interests

	(In thousands)

Balance at December 31, 2021	$	28,193	$	17,015
Net income attributable to noncontrolling interests		—		701
Change in fair value		579		39
Balance at March 31, 2022	$	28,772	$	17,755

The amount of total (losses)/income for the period included in earnings attributable to the change in unrealized losses/income relating to assets and liabilities still held at the reporting date	$	(579)	$	—


For the Year Ended December 31,	(Dollars in thousands)
For the remaining nine months ending December 31, 2022	$	10,331
2023		11,886
2024		10,773
2025		6,033
2026		3,723
Thereafter		8,186
Total future lease payments		50,932
Imputed interest		11,623
Total	$	39,309


	Radio		Reach				Cable
	Broadcasting		Media		Digital		Television
	Segment		Segment		Segment		Segment		Total

	(In thousands)
Gross goodwill	$	155,000	$	30,468	$	27,567	$	165,044	$	378,079
Additions		—		—		—		—		—
Impairments		—		—		—		—		—
Accumulated impairment losses		(117,748)		(16,114)		(20,345)		—		(154,207)
Audacy asset exchange		(470)		—		—		—		(470)
Net goodwill at March 31, 2022	$	36,782	$	14,354	$	7,222	$	165,044	$	223,402


	March 31,		December 31,
	2022		2021
	(Unaudited)
	(In thousands)
7.375% Senior Secured Notes due February 2028	$	825,000	$	825,000
PPP Loan		7,505		7,505
Total debt		832,505		832,505
Less: current portion of long-term debt		—		—
Less: original issue discount and issuance costs		13,456		13,889
Long-term debt, net	$	819,049	$	818,616


	Three Months Ended March 31,
	2022		2021


Net Revenue:
Radio Advertising	$	39,127	$	33,340
Political Advertising		532		780
Digital Advertising		15,482		10,353
Cable Television Advertising		30,414		20,702
Cable Television Affiliate Fees		25,970		25,486
Event Revenues & Other		824		779
Net Revenue (as reported)	$	112,349	$	91,440


	7.375% Senior
	Secured Notes due
	February 2028		PPP Loan		Total

	(In thousands)
April - December 2022	$	—	$	—	$	—
2023		—		—		—
2024		—		—		—
2025		—		—		—
2026		—		7,505		7,505
2027 and thereafter		825,000		—		825,000
Total Debt	$	825,000	$	7,505	$	832,505


				Weighted-Average
				Remaining	Aggregate
	Number of	Weighted-Average		Contractual Term	Intrinsic
	Options	Exercise Price		(In Years)	Value
Outstanding at December 31, 2021	3,771,000	$	2.18	5.68	$	4,660,000
Grants	7,000	$	3.63	—		—
Exercised	—	$	—	—		—
Forfeited/cancelled/expired/settled	—	$	—	—		—
Balance as of March 31, 2022	3,778,000	$	2.18	5.44	$	11,270,000
Vested and expected to vest at March 31, 2022	3,777,000	$	2.18	5.44	$	11,270,000
Unvested at March 31, 2022	11,000	$	7.26	9.51	$	—
Exercisable at March 31, 2022	3,767,000	$	2.16	5.43	$	11,270,000


		Average
		Fair Value
		at Grant
	Shares	Date
Unvested at December 31, 2021	76,000	$	3.90
Grants	7,000	$	3.63
Vested	(7,000)	$	3.63
Forfeited/cancelled/expired	—	$	—
Unvested at March 31, 2022	76,000	$	3.90


Capital expenditures by segment are as follows:
Radio Broadcasting	$	640	$	261
Reach Media		21		1
Digital		225		326
Cable Television		383		38
Corporate/Eliminations		307		178
Consolidated	$	1,576	$	804


	For The Three Months Ended
	March 31,
	2022		2021
Radio broadcasting segment	28.0	%	30.4	%

Reach Media segment	8.9	%	8.5	%

Digital segment	13.8	%	11.3	%

Cable television segment	50.2	%	50.6	%

Corporate/eliminations	(0.9)	%	(0.8)	%


Three Months Ended March 31,				Increase/(Decrease)
2022		2021
$	112,349	$	91,440	$	20,909	22.9	%


			Applicable
	Amount		Interest
Type of Debt	Outstanding		Rate
	(In millions)
7.375% Senior Secured Notes, net of issuance costs (fixed rate)	$	811.5	7.375	%
PPP Loan	$	7.5	1.0	%
Asset-backed credit facility (variable rate)(1)	$	—	—	%


	Payments Due by Period
	Remainder of										2027 and
Contractual Obligations	2022		2023		2024		2025		2026		Beyond		Total

	(In thousands)
7.375% Subordinated Notes (1)	$	45,633	$	60,844	$	60,844	$	60,844	$	60,844	$	890,914	$	1,179,923
PPP Loan (2)		56		75		75		75		7,542		—		7,823
Other operating contracts/agreements (3)		74,435		31,247		23,779		20,818		9,927		11,364		171,570
Operating lease obligations		10,028		11,478		10,248		5,530		3,228		5,510		46,022
Total	$	130,152	$	103,644	$	94,946	$	87,267	$	81,541	$	907,788	$	1,405,338

Exhibit Number		Description

31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101		Financial information from the Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, formatted in Inline XBRL.
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)


	URBAN ONE, INC.

	/s/ PETER D. THOMPSON
	Peter D. Thompson
	Executive Vice President and
	Chief Financial Officer
	(Principal Accounting Officer)


	By:	/s/ Alfred C. Liggins, III
		Alfred C. Liggins, III
		President and Chief Executive Officer
Date: May 9, 2022


	By:	/s/ Peter D. Thompson
		Peter D. Thompson
		Executive Vice President,
		Chief Financial Officer and Principal Accounting Officer
Date: May 9, 2022


	By:	/s/ Alfred C. Liggins, III
		Name:	Alfred C. Liggins, III
		Title:	President and Chief Executive Officer
Date: May 9, 2022