Urban One, Inc 10-Q for FY2021 Q3

Urban One, Inc. (UONE)

10-Q 2021-11-04 For: 2021-09-30

Added on April 09, 2026

About this 10-Q

Urban One, Inc filed this 10-Q on November 4, 2021, covering the quarter ended September 30, 2021 (FY2021 Q3).

Headline figures

Quarter ended September 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $111.46M; up 21.3% from $91.91M a year earlier
Net income: $13.88M; compared with a net loss of $12.77M a year earlier
Diluted EPS: $0.25; compared with -$0.29 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 October 29, 2021
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		37,317,267


		Page
	PART I. FINANCIAL INFORMATION
Item 1.	Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2021 and 2020 (Unaudited)	5
	Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2021 and 2020 (Unaudited)	6
	Consolidated Balance Sheets as of September 30, 2021 (Unaudited) and December 31, 2020	7
	Consolidated Statement of Changes in Stockholders’ Equity for the Three and Nine Months Ended September 30, 2021 (Unaudited)	8
	Consolidated Statement of Changes in Stockholders’ Equity for the Three and Nine Months Ended September 30, 2020 (Unaudited)	9
	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2021 and 2020 (Unaudited)	10
	Notes to Consolidated Financial Statements (Unaudited)	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	40
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	62
Item 4.	Controls and Procedures	62

	PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	63
Item 1A.	Risk Factors	63
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	63
Item 3.	Defaults Upon Senior Securities	63
Item 4.	Mine Safety Disclosures	63
Item 5.	Other Information	63
Item 6.	Exhibits	64
	SIGNATURES	65


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020

	(Unaudited)
	(In thousands, except share data)

NET REVENUE	$	111,463	$	91,912	$	310,496	$	262,795
OPERATING EXPENSES:
Programming and technical including stock-based compensation of $4 and $4, and $14 and $16, respectively		29,230		24,206		80,843		75,700
Selling, general and administrative, including stock-based compensation of $0 and $99, and $31 and $263, respectively		33,102		23,615		94,599		75,372
Corporate selling, general and administrative, including stock-based compensation of $49 and $691, and $433 and $1,176, respectively		12,320		8,584		31,977		24,541
Depreciation and amortization		2,336		2,489		6,925		7,419
Impairment of long-lived assets		—		29,050		—		82,700
Total operating expenses		76,988		87,944		214,344		265,732
Operating income (loss)		34,475		3,968		96,152		(2,937)
INTEREST INCOME		13		178		185		212
INTEREST EXPENSE		15,896		18,243		49,794		55,776
LOSS ON RETIREMENT OF DEBT		—		—		6,949		—
OTHER INCOME, net		(2,120)		(1,684)		(6,166)		(3,282)
Income (loss) before provision for (benefit from) income taxes and noncontrolling interests in income of subsidiaries		20,712		(12,413)		45,760		(55,219)
PROVISION FOR (BENEFIT FROM) INCOME TAXES		6,257		(136)		12,366		(21,526)
CONSOLIDATED NET INCOME (LOSS)		14,455		(12,277)		33,394		(33,693)
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS		579		495		1,645		846
CONSOLIDATED NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	13,876	$	(12,772)	$	31,749	$	(34,539)

BASIC NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS
Net income (loss) attributable to common stockholders	$	0.27	$	(0.29)	$	0.64	$	(0.77)

DILUTED NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS
Net income (loss) attributable to common stockholders	$	0.25	$	(0.29)	$	0.59	$	(0.77)

WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic		51,190,105		44,175,385		49,816,663		44,738,635
Diluted		55,080,394		44,175,385		53,832,135		44,738,635


	As of
	September 30, 2021		December 31, 2020
	(Unaudited)
	(In thousands, except share data)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	111,358	$	73,385
Restricted cash		473		473
Trade accounts receivable, net of allowance for doubtful accounts of $7,937 and $7,956, respectively		114,045		106,296
Prepaid expenses		8,919		10,154
Current portion of content assets		32,376		28,434
Other current assets		4,423		4,224
Total current assets		271,594		222,966
CONTENT ASSETS, net		57,565		63,175
PROPERTY AND EQUIPMENT, net		25,493		19,192
GOODWILL		223,402		223,402
RIGHT OF USE ASSETS		39,556		40,918
RADIO BROADCASTING LICENSES		505,148		484,066
OTHER INTANGIBLE ASSETS, net		51,821		56,053
DEFERRED TAX ASSETS, net		—		10,041
ASSETS HELD FOR SALE		—		32,661
OTHER ASSETS		62,958		43,013
Total assets	$	1,237,537	$	1,195,487
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	14,623	$	11,135
Accrued interest		10,229		8,017
Accrued compensation and related benefits		6,661		12,302
Current portion of content payables		17,009		16,248
Current portion of lease liabilities		10,129		8,928
Other current liabilities		29,334		26,917
Current portion of long-term debt		—		23,362
Total current liabilities		87,985		106,909
LONG-TERM DEBT, net of current portion, original issue discount and issuance costs		818,191		818,924
CONTENT PAYABLES, net of current portion		4,831		9,479
LONG-TERM LEASE LIABILITIES		32,980		36,577
OTHER LONG-TERM LIABILITIES		26,055		23,999
DEFERRED TAX LIABILITIES, net		2,325		—
Total liabilities		972,367		995,888

REDEEMABLE NONCONTROLLING INTERESTS		17,017		12,701

STOCKHOLDERS’ EQUITY:
Convertible preferred stock, $.001 par value, 1,000,000 shares authorized; no shares outstanding at September 30, 2021 and December 31, 2020		—		—
Common stock — Class A, $.001 par value, 30,000,000 shares authorized; 8,221,026 and 4,441,635 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively		8		4
Common stock — Class B, $.001 par value, 150,000,000 shares authorized; 2,861,843 shares issued and outstanding as of September 30, 2021 and December 31, 2020		3		3
Common stock — Class C, $.001 par value, 150,000,000 shares authorized; 2,928,906 shares issued and outstanding as of September 30, 2021 and December 31, 2020		3		3
Common stock — Class D, $.001 par value, 150,000,000 shares authorized; 37,317,267 and 37,515,801 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively		37		38
Additional paid-in capital		1,021,272		991,769
Accumulated deficit		(773,170)		(804,919)
Total stockholders’ equity		248,153		186,898
Total liabilities, redeemable noncontrolling interests and stockholders’ equity	$	1,237,537	$	1,195,487


	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, 2020	$	—	$	4	$	3	$	3	$	38	$	991,769	$	(804,919)	$	186,898
Consolidated net income		—		—		—		—		—		—		31,749		31,749
Repurchase of 519,347 shares of Class D common stock		—		—		—		—		(1)		(943)		—		(944)
Issuance of 3,779,391 shares of Class A common stock		—		4		—		—		—		33,273		—		33,277
Exercise of options for 219,756 shares of common stock		—		—		—		—		—		366		—		366
Adjustment of redeemable noncontrolling interests to estimated redemption value		—		—		—		—		—		(3,671)		—		(3,671)
Stock-based compensation expense		—		—		—		—		—		478		—		478
BALANCE, as of September 30, 2021	$	—	$	8	$	3	$	3	$	37	$	1,021,272	$	(773,170)	$	248,153


	Nine Months Ended
	September 30,
	2021		2020

	(Unaudited)
	(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Consolidated net income (loss)	$	33,394	$	(33,693)
Adjustments to reconcile net income (loss) to net cash from operating activities:
Depreciation and amortization		6,925		7,419
Amortization of debt financing costs		1,776		3,248
Amortization of content assets		30,356		27,607
Amortization of launch assets		1,003		770
Bad debt expense		825		1,243
Deferred income taxes		12,366		(21,849)
Amortization of right of use assets		5,760		5,974
Non-cash lease liability expense		3,299		3,692
Non-cash interest expense		158		1,614
Impairment of long-lived assets		—		82,700
Stock-based compensation		478		1,455
Non-cash fair value adjustment of Employment Agreement Award		2,698		2,318
Loss on retirement of debt		6,949		—
Gain on asset exchange agreement		404		—

Effect of change in operating assets and liabilities, net of assets acquired:
Trade accounts receivable		(8,574)		12,548
Prepaid expenses and other current assets		(149)		6,342
Other assets		(30,863)		(16,482)
Accounts payable		3,488		480
Accrued interest		2,212		5,371
Accrued compensation and related benefits		(5,641)		(5,416)
Other liabilities		1,975		3,852
Payments for content assets		(32,575)		(24,750)
Net cash flows provided by operating activities		36,264		64,443
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(4,182)		(3,176)
Proceeds from sale of broadcasting assets		8,000		—
Acquisition of broadcasting assets		—		(475)
Net cash flows provided by (used in) investing activities		3,818		(3,651)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of 2017 credit facility		(317,332)		(2,473)
Proceeds of asset-backed credit facility		—		27,500
Proceeds from issuance of Class A common stock, net of fees		33,277		14,772
Proceeds of MGM National Harbor Loan		—		3,600
Repayment of 2018 credit facility		(129,935)		(32,410)
Proceeds from exercise of stock options		366		1,976
Payment of dividends to noncontrolling interest members of Reach Media		(1,000)		(1,000)
Repurchase of common stock		(944)		(3,607)
Proceeds from 2028 Notes		825,000		—
Proceeds from PPP Loan		7,505		—
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) provided by financing activities		(2,109)		8,358
INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		37,973		69,150
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period		73,858		33,546
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period	$	111,831	$	102,696

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for:
Interest	$	45,649	$	45,542
Income taxes, net of refunds	$	782	$	509

NON-CASH OPERATING, FINANCING AND INVESTING ACTIVITIES:
Assets acquired under Audacy asset exchange	$	28,193	$	—
Liabilities recognized under Audacy asset exchange	$	2,669	$	—
Right of use asset and lease liability additions	$	5,708	$	5,483
Adjustment of redeemable noncontrolling interests to estimated redemption value	$	3,671	$	707


	September 30, 2021		December 31, 2020		September 30, 2020
	(Unaudited)				(Unaudited)
	(In thousands)
Contract assets:
Unbilled receivables	$	9,403	$	5,798	$	7,085

Contract liabilities:
Customer advances and unearned income	$	8,357	$	4,955	$	4,587
Unearned event income		6,700		5,921		6,809


	Three Months Ended	Nine Months Ended
	September 30, 2020	September 30, 2020

	(Unaudited)
	(In thousands)
Stock options	3,849	3,849
Restricted stock awards	1,818	1,886


	Total		Level 1		Level 2		Level 3

	(Unaudited)
	(In thousands)
As of September 30, 2021
Liabilities subject to fair value measurement:
Contingent consideration (a)	$	—		—		—	$	—
Employment agreement award (b)		25,655		—		—		25,655
Total	$	25,655	$	—	$	—	$	25,655

Mezzanine equity subject to fair value measurement:
Redeemable noncontrolling interests (c)	$	17,017	$	—	$	—	$	17,017

As of December 31, 2020
Liabilities subject to fair value measurement:
Contingent consideration (a)	$	780		—		—	$	780
Employment agreement award (b)		25,603		—		—		25,603
Total	$	26,383	$	—	$	—	$	26,383

Mezzanine equity subject to fair value measurement:
Redeemable noncontrolling interests (c)	$	12,701	$	—	$	—	$	12,701


			Employment		Redeemable
	Contingent		Agreement		Noncontrolling
	Consideration		Award		Interests

	(In thousands)

Balance at December 31, 2020	$	780	$	25,603	$	12,701
Net income attributable to noncontrolling interests		—		—		1,645
Distribution		(1,060)		(2,646)		—
Dividends paid to noncontrolling interests		—		—		(1,000)
Change in fair value		280		2,698		3,671
Balance at September 30, 2021	$	—	$	25,655	$	17,017

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	$	(280)	$	(2,698)	$	—


For the Year Ended December 31,	(Dollars in thousands)
For the remaining three months ending December 31, 2021	$	3,570
2022		13,515
2023		11,585
2024		10,470
2025		5,723
Thereafter		11,776
Total future lease payments		56,639
Imputed interest		13,530
Total	$	43,109


	As of December 31,
	2020
		(In thousands)
Property and equipment, net	$	2,144
Goodwill		470
Radio broadcasting licenses		30,606
Right of use assets		1,071
Lease liabilities		(1,630)
Assets held for sale, net	$	32,661


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020

	(In thousands, unaudited)
Net Revenue:
Radio Advertising	$	43,089	$	34,919	$	119,033	$	98,695
Political Advertising		711		4,324		1,991		7,089
Digital Advertising		14,981		8,121		40,351		20,514
Cable Television Advertising		22,969		19,603		66,638		59,576
Cable Television Affiliate Fees		25,877		24,421		76,760		75,247
Event Revenues & Other		3,836		524		5,723		1,674
Net Revenue (as reported)	$	111,463	$	91,912	$	310,496	$	262,795


Radio Broadcasting	September 30,			March 31,
Licenses	2020 (a)			2020 (a)
Impairment charge (in millions)	$	19.1		$	47.7
Discount Rate		9.0	%		9.5	%
Year 1 Market Revenue Growth Rate Range		(10.7)% – (16.8)	%		(13.3)	%
Long-term Market Revenue Growth Rate Range (Years 6 – 10)		0.7% – 1.1	%		0.7% – 1.1	%
Mature Market Share Range		6.7% – 23.9	%		6.9% – 25.0	%
Mature Operating Profit Margin Range		27.7% – 37.1	%		27.6% – 39.7	%


Goodwill (Radio Market	September 30,			March 31,
Reporting Units)	2020 (a)			2020 (a)
Impairment charge (in millions)	$	10.0		$	5.9
Discount Rate		9.0	%		9.5	%
Year 1 Market Revenue Growth Rate Range		(26.6)% – 34.7	%		(14.5)% – (12.9)	%
Long-term Market Revenue Growth Rate Range (Years 6 – 10)		0.9% – 1.1	%		0.9% – 1.1	%
Mature Market Share Range		8.4% – 12.7	%		11.1% – 13.0	%
Mature Operating Profit Margin Range		27.7% – 48.1	%		29.4% – 39.0	%


	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 September 30, 2021	$	36,782	$	14,354	$	7,222	$	165,044	$	223,402


	7.375% Senior
	Secured Notes due
	February 2028		PPP Loan		Total

	(In thousands)
October - December 2021	$	—	$	—	$	—
2022		—		—		—
2023		—		—		—
2024		—		—		—
2025		—		—		—
2026 and thereafter		825,000		7,505		832,505
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, 2020	4,019,000	$	2.11	6.48	$	41,000
Grants	20,000	$	1.25	—		—
Exercised	220,000	$	1.66	—		—
Forfeited/cancelled/expired/settled	59,000	$	1.27	—		—
Balance as of September 30, 2021	3,760,000	$	2.15	5.91	$	17,528,000
Vested and expected to vest at September 30, 2021	3,760,000	$	2.15	5.91	$	17,528,000
Unvested at September 30, 2021	—	$	—	—	$	—
Exercisable at September 30, 2021	3,760,000	$	2.15	5.91	$	17,528,000


		Average
		Fair Value
		at Grant
	Shares	Date
Unvested at December 31, 2020	1,724,000	$	0.83
Grants	101,000	$	3.22
Vested	(1,740,000)	$	0.83
Forfeited/cancelled/expired	—	$	—
Unvested at September 30, 2021	85,000	$	3.73


Radio Broadcasting	$	655	$	306
Reach Media		68		9
Digital		342		180
Cable Television		68		8
Corporate/Eliminations		595		23
Consolidated	$	1,728	$	526


Radio Broadcasting	$	1,882	$	1,826
Reach Media		100		75
Digital		914		616
Cable Television		250		72
Corporate/Eliminations		1,036		587
Consolidated	$	4,182	$	3,176


	For The Three Months Ended				For The Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Radio broadcasting segment	34.6	%	34.4	%	32.8	%	33.1	%

Reach Media segment	8.9	%	8.4	%	8.8	%	7.9	%

Digital segment	13.4	%	9.2	%	13.0	%	7.9	%

Cable television segment	43.8	%	48.7	%	46.2	%	51.8	%

Corporate/eliminations	(0.7)	%	(0.7)	%	(0.8)	%	(0.7)	%


	Three Months
	Ended September 30,
	2021		2020		$ Change		% Change

	(Unaudited)
	(In thousands)
Net Revenue:
Radio Advertising	$	43,089	$	34,919	$	8,170	23.4	%
Political Advertising		711		4,324		(3,613)	(83.6)
Digital Advertising		14,981		8,121		6,860	84.5
Cable Television Advertising		22,969		19,603		3,366	17.2
Cable Television Affiliate Fees		25,877		24,421		1,456	6.0
Event Revenues & Other		3,836		524		3,312	632.1
Net Revenue (as reported)	$	111,463	$	91,912	$	19,551	21.3	%


	Nine Months
	Ended September 30,
	2021		2020		$ Change		% Change

	(Unaudited)
	(In thousands)
Net Revenue:
Radio Advertising	$	119,033	$	98,695	$	20,338	20.6	%
Political Advertising		1,991		7,089		(5,098)	(71.9)
Digital Advertising		40,351		20,514		19,837	96.7
Cable Television Advertising		66,638		59,576		7,062	11.9
Cable Television Affiliate Fees		76,760		75,247		1,513	2.0
Event Revenues & Other		5,723		1,674		4,049	241.9
Net Revenue (as reported)	$	310,496	$	262,795	$	47,701	18.2	%


Three Months Ended September 30,				Increase/(Decrease)
2021		2020
$	111,463	$	91,912	$	19,551	21.3	%


			Applicable
	Amount		Interest
Type of Debt	Outstanding (2)		Rate
	(In millions)
7.375% Senior Secured Notes, net of issuance costs (fixed rate)		810.7	7.375	%
PPP Loan		7.5	1.0
Asset-backed credit facility (variable rate)(1)		—	—	%


a)	Reflects changes only to the key assumptions used in the interim testing for certain units of accounting.


	Payments Due by Period
	Remainder										2026 and
Contractual Obligations	of 2021		2022		2023		2024		2025		Beyond		Total

	(In thousands)
7.375% Subordinated Notes (1)	$	15,211	$	60,844	$	60,844	$	60,844	$	60,844	$	951,758	$	1,210,345
PPP Loan (2)		19		75		75		75		75		7,542		7,861
Other operating contracts/agreements(3)		28,501		32,885		16,963		13,766		13,592		5,987		111,694
Operating lease obligations		3,396		12,937		11,165		9,981		5,416		8,452		51,347
Total	$	47,127	$	106,741	$	89,047	$	84,666	$	79,927	$	973,739	$	1,381,247

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 September 30, 2021, 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: November 4, 2021


	By:	/s/ Peter D. Thompson
		Peter D. Thompson
		Executive Vice President,
		Chief Financial Officer and Principal Accounting Officer
Date: November 4, 2021


	By:	/s/ Alfred C. Liggins, III
		Name:	Alfred C. Liggins, III
		Title:	President and Chief Executive Officer
Date: November 4, 2021