Urban One, Inc 10-Q for FY2022 Q2

Urban One, Inc. (UONE)

10-Q 2022-08-12 For: 2022-06-30

Added on April 09, 2026

About this 10-Q

Urban One, Inc filed this 10-Q on August 12, 2022, covering the quarter ended June 30, 2022 (FY2022 Q2).

Headline figures

Quarter ended June 30, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $118.81M; up 10.4% from $107.59M a year earlier
Net income: $15.03M; down 15.9% from net income of $17.87M a year earlier
Diluted EPS: $0.28; down 15.2% from $0.33 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 August 5, 2022
Class A Common Stock, $.001 Par Value		9,104,726
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		32,768,182


		Page
	PART I. FINANCIAL INFORMATION
Item 1.	Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2022 and 2021 (Unaudited)	5
	Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2022 and 2021 (Unaudited)	6
	Consolidated Balance Sheets as of June 30, 2022 (Unaudited) and December 31, 2021	7
	Consolidated Statement of Changes in Stockholders’ Equity for the Six Months Ended June 30, 2022 (Unaudited)	8
	Consolidated Statement of Changes in Stockholders’ Equity for the Six Months Ended June 30, 2021 (Unaudited)	9
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 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	39
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	61
Item 4.	Controls and Procedures	61

	PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	62
Item 1A.	Risk Factors	62
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	64
Item 3.	Defaults Upon Senior Securities	64
Item 4.	Mine Safety Disclosures	64
Item 5.	Other Information	64
Item 6.	Exhibits	64
	SIGNATURES	65


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021

	(Unaudited)				(Unaudited)
	(In thousands, except share data)				(In thousands, except share data)

NET REVENUE	$	118,810	$	107,593	$	231,159	$	199,033
OPERATING EXPENSES:
Programming and technical including stock-based compensation of $0 and $4, and $0 and $10, respectively		28,351		26,517		56,869		51,613
Selling, general and administrative, including stock-based compensation of $0 and $0, and $0 and $31, respectively		35,346		31,510		70,774		61,497
Corporate selling, general and administrative, including stock-based compensation of $336 and $168, and $460 and $384, respectively		11,864		9,321		21,324		19,657
Depreciation and amortization		2,481		2,325		4,886		4,589
Impairment of long-lived assets		16,933		—		16,933		—
Total operating expenses		94,975		69,673		170,786		137,356
Operating income		23,835		37,920		60,373		61,677
INTEREST INCOME		—		168		59		172
INTEREST EXPENSE		15,886		15,853		31,813		33,898
(GAIN) LOSS ON RETIREMENT OF DEBT		(1,855)		—		(1,855)		6,949
OTHER INCOME, net		(9,725)		(2,362)		(11,711)		(4,046)
Income before provision for income taxes and noncontrolling interests in income of subsidiaries		19,529		24,597		42,185		25,048
PROVISION FOR INCOME TAXES		3,725		6,119		9,311		6,109
CONSOLIDATED NET INCOME		15,804		18,478		32,874		18,939
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS		770		612		1,471		1,066
CONSOLIDATED NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	15,034	$	17,866	$	31,403	$	17,873

BASIC NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS
Net income attributable to common stockholders	$	0.30	$	0.36	$	0.62	$	0.36

DILUTED NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS
Net income attributable to common stockholders	$	0.28	$	0.33	$	0.57	$	0.34

WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic		50,806,346		49,789,892		50,994,612		49,124,056
Diluted		54,658,543		53,780,918		54,871,963		53,186,619


	As of
	June 30, 2022		December 31, 2021
	(Unaudited)
	(In thousands, except share data)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	123,030	$	132,245
Restricted cash		19,973		19,973
Trade accounts receivable, net of allowance for doubtful accounts of $8,314 and $8,743, respectively		123,998		127,446
Prepaid expenses		4,030		2,967
Current portion of content assets		31,993		25,883
Other current assets		8,037		4,760
Total current assets		311,061		313,274
CONTENT ASSETS, net		65,053		60,155
PROPERTY AND EQUIPMENT, net		26,913		26,291
GOODWILL		219,077		223,402
RIGHT OF USE ASSETS		34,149		38,044
RADIO BROADCASTING LICENSES		489,340		505,148
OTHER INTANGIBLE ASSETS, net		61,508		50,159
ASSETS HELD FOR SALE		3,200		—
OTHER ASSETS		44,463		44,635
Total assets	$	1,254,764	$	1,261,108
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	14,819	$	14,588
Accrued interest		24,648		25,458
Accrued compensation and related benefits		7,272		10,960
Current portion of content payables		21,628		18,972
Current portion of lease liabilities		9,933		10,072
Other current liabilities		31,345		26,421
Total current liabilities		109,645		106,471
LONG-TERM DEBT, net of current portion, original issue discount and issuance costs		787,381		818,616
CONTENT PAYABLES, net of current portion		3,962		2,865
LONG-TERM LEASE LIABILITIES		26,900		31,228
OTHER LONG-TERM LIABILITIES		37,555		28,320
DEFERRED TAX LIABILITIES, net		11,070		2,473
Total liabilities		976,513		989,973
COMMITMENTS AND CONTINGENCIES
REDEEMABLE NONCONTROLLING INTERESTS		18,690		17,015

STOCKHOLDERS’ EQUITY:
Convertible preferred stock, $.001 par value, 1,000,000 shares authorized; no shares outstanding at June 30, 2022 and December 31, 2021		—		—
Common stock — Class A, $.001 par value, 30,000,000 shares authorized; 9,104,916 shares issued and outstanding as of June 30, 2022 and December 31, 2021		9		9
Common stock — Class B, $.001 par value, 150,000,000 shares authorized; 2,861,843 shares issued and outstanding as of June 30, 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 June 30, 2022 and December 31, 2021, respectively		2		2
Common stock — Class D, $.001 par value, 150,000,000 shares authorized; 32,755,317 and 37,324,737 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively		33		37
Additional paid-in capital		994,678		1,020,636
Accumulated deficit		(735,164)		(766,567)
Total stockholders’ equity		259,561		254,120
Total liabilities, redeemable noncontrolling interests and stockholders’ equity	$	1,254,764	$	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		—		—		—		—		—		—		31,403		31,403
Stock-based compensation expense		—		—		—		—		—		460		—		460
Repurchase of 4,684,419 shares of Class D common stock		—		—		—		—		(4)		(24,665)				(24,669)
Exercise of options for 60,240 shares of common stock		—		—		—		—		—		50		—		50
Adjustment of redeemable noncontrolling interests to estimated redemption value		—		—		—		—		—		(1,803)		—		(1,803)
BALANCE, as of June 30, 2022	$	—	$	9	$	3	$	2	$	33	$	994,678	$	(735,164)	$	259,561


	Six Months Ended
	June 30,
	2022		2021

	(Unaudited)
	(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Consolidated net income	$	32,874	$	18,939

Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization		4,886		4,589
Amortization of debt financing costs		1,005		1,296
Amortization of content assets		20,341		18,575
Amortization of launch assets		1,897		668
Bad debt expense		(35)		134
Deferred income taxes		8,597		6,108
Amortization of right of use assets		4,330		3,851
Non-cash lease liability expense		2,038		2,066
Non-cash interest expense		—		158
Impairment of long-lived assets		16,933		—
Stock-based compensation		460		425
Non-cash fair value adjustment of Employment Agreement Award		1,482		1,508
Non-cash income on PPP loan forgiveness		(7,575)		—
(Gain) loss on retirement of debt		(1,855)		6,949
Gain on asset exchange agreement		—		404

Effect of change in operating assets and liabilities, net of assets acquired:
Trade accounts receivable		3,483		2,260
Prepaid expenses and other current assets		(394)		(1,285)
Other assets		(698)		(8,512)
Accounts payable		231		1,388
Accrued interest		(810)		18,397
Accrued compensation and related benefits		(3,688)		(5,597)
Other liabilities		(7,283)		235
Payment of launch support		(5,000)		—
Payments for content assets		(27,595)		(21,064)
Net cash flows provided by operating activities		43,624		51,492
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(3,871)		(2,454)
Proceeds from sale of broadcasting assets		—		8,000
Net cash flows (used in) provided by investing activities		(3,871)		5,546
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of 2017 credit facility		—		(317,332)
Proceeds from issuance of Class A common stock, net of fees		—		33,282
Repayment of 2018 credit facility		—		(129,935)
Proceeds from exercise of stock options		50		315
Repurchase of 2028 Notes		(22,750)		—
Payment of dividends to noncontrolling interest members of Reach Media		(1,599)		—
Repurchase of common stock		(24,669)		(905)
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 financing activities		(48,968)		(1,116)
(DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		(9,215)		55,922
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period		152,218		73,858
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period	$	143,003	$	129,780

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for:
Interest	$	31,543	$	14,048
Income taxes, net of refunds	$	698	$	782

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	$	435	$	4,935
Non-cash launch addition	$	13,750	$	—
Adjustment of redeemable noncontrolling interests to estimated redemption value	$	1,803	$	1,425


	June 30, 2022		December 31, 2021		June 30, 2021
	(Unaudited)				(Unaudited)
	(In thousands)
Contract assets:
Unbilled receivables	$	10,470	$	10,735	$	8,540

Contract liabilities:
Customer advances and unearned income	$	7,708	$	7,494	$	5,252
Reserve for audience deficiency		7,050		6,020		6,478
Unearned event income		379		—		6,118


	Total		Level 1		Level 2		Level 3

	(Unaudited)
	(In thousands)
As of June 30, 2022
Liabilities subject to fair value measurement:
Employment agreement award (a)	$	29,675		—		—	$	29,675
Total	$	29,675	$	—	$	—	$	29,675

Mezzanine equity subject to fair value measurement:
Redeemable noncontrolling interests (b)	$	18,690	$	—	$	—	$	18,690

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		—		1,471
Dividends paid to noncontrolling interests		—		(1,599)
Change in fair value		1,482		1,803
Balance at June 30, 2022	$	29,675	$	18,690

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	$	(1,482)	$	—


For the Year Ended December 31,	(Dollars in thousands)
For the remaining six months ending December 31, 2022	$	6,829
2023		11,886
2024		10,773
2025		6,033
2026		3,723
Thereafter		8,189
Total future lease payments		47,433
Imputed interest		10,600
Total	$	36,833


Radio Broadcasting	June 30,
Licenses	2022 (a)
Impairment charge (in millions)	$	12.6	(*)
Discount Rate		9.5	%
Year 1 Market Revenue Growth Rate Range		1.4% – 1.8	%
Long-term Market Revenue Growth Rate Range		0.7% – 1.0	%
Mature Market Share Range		6.2% – 23.2	%
Mature Operating Profit Margin Range		28.3% – 36.1	%


Goodwill (Radio Market	June 30,
Reporting Units)	2022 (a)
Impairment charge (in millions)	$	4.3
Discount Rate		9.5	%
Year 1 Market Revenue Growth Rate Range		(2.5)% - 1.5	%
Long-term Market Revenue Growth Rate Range		0.7% – 1.0	%
Mature Market Share Range		10.4% – 15.5	%
Mature Operating Profit Margin Range		19.5% – 32.9	%


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021

	(Unaudited)
	(In thousands)
Net Revenue:
Radio Advertising	$	44,518	$	42,605	$	83,645	$	75,944
Political Advertising		1,839		500		2,371		1,280
Digital Advertising		17,881		15,016		33,363		25,369
Cable Television Advertising		29,120		22,968		59,535		43,670
Cable Television Affiliate Fees		24,318		25,396		50,288		50,883
Event Revenues & Other		1,134		1,108		1,957		1,887
Net Revenue (as reported)	$	118,810	$	107,593	$	231,159	$	199,033


	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		(4,325)		—		—		—		(4,325)
Accumulated impairment losses		(117,748)		(16,114)		(20,345)		—		(154,207)
Audacy asset exchange		(470)		—		—		—		(470)
Net goodwill at June 30, 2022	$	32,457	$	14,354	$	7,222	$	165,044	$	219,077


	June 30,		December 31,
	2022		2021
	(Unaudited)
	(In thousands)
7.375% Senior Secured Notes due February 2028	$	800,000	$	825,000
PPP Loan		—		7,505
Total debt		800,000		832,505
Less: current portion of long-term debt		—		—
Less: original issue discount and issuance costs		12,619		13,889
Long-term debt, net	$	787,381	$	818,616


	7.375% Senior
	Secured Notes due
	February 2028		Total

	(In thousands)
July - December 2022	$	—	$	—
2023		—		—
2024		—		—
2025		—		—
2026		—		—
2027 and thereafter		800,000		800,000
Total Debt	$	800,000	$	800,000


				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	(60,000)	$	0.83	—		—
Forfeited/cancelled/expired/settled	—	$	—	—		—
Balance as of June 30, 2022	3,718,000	$	2.20	5.28	$	7,794,000
Vested and expected to vest at June 30, 2022	3,717,000	$	2.20	5.28	$	7,794,000
Unvested at June 30, 2022	11,000	$	7.26	9.26	$	—
Exercisable at June 30, 2022	3,707,000	$	2.19	5.27	$	7,794,000


		Average
		Fair Value
		at Grant
	Shares	Date
Unvested at December 31, 2021	76,000	$	3.90
Grants	55,000	$	5.39
Vested	(82,000)	$	4.51
Forfeited/cancelled/expired	—	$	—
Unvested at June 30, 2022	49,000	$	4.56


	Three Months Ended
	June 30,
	2022		2021

	(Unaudited)
	(In thousands)
Net Revenue:
Radio Broadcasting	$	37,192	$	35,465
Reach Media		11,092		9,414
Digital		17,881		15,129
Cable Television		53,449		48,461
Corporate/Eliminations*		(804)		(876)
Consolidated	$	118,810	$	107,593

Operating Expenses (including stock-based compensation and excluding depreciation and amortization and impairment of long-lived assets):
Radio Broadcasting	$	25,538	$	22,369
Reach Media		6,279		6,002
Digital		10,218		8,800
Cable Television		25,551		23,550
Corporate/Eliminations		7,975		6,627
Consolidated	$	75,561	$	67,348

Depreciation and Amortization:
Radio Broadcasting	$	825	$	792
Reach Media		46		53
Digital		332		315
Cable Television		952		937
Corporate/Eliminations		326		228
Consolidated	$	2,481	$	2,325

Impairment of Long-Lived Assets:
Radio Broadcasting	$	16,933	$	—
Reach Media		—		—
Digital		—		—
Cable Television		—		—
Corporate/Eliminations		—		—
Consolidated	$	16,933	$	—

Operating income (loss):
Radio Broadcasting	$	(6,104)	$	12,304
Reach Media		4,767		3,359
Digital		7,331		6,014
Cable Television		26,946		23,974
Corporate/Eliminations		(9,105)		(7,731)
Consolidated	$	23,835	$	37,920

* Intercompany revenue included in net revenue above is as follows:
Radio Broadcasting	$	(804)	$	(876)


Capital expenditures by segment are as follows:
Radio Broadcasting	$	616	$	966
Reach Media		153		31
Digital		410		246
Cable Television		233		144
Corporate/Eliminations		883		263
Consolidated	$	2,295	$	1,650


Capital expenditures by segment are as follows:
Radio Broadcasting	$	1,256	$	1,227
Reach Media		174		32
Digital		635		572
Cable Television		616		182
Corporate/Eliminations		1,190		441
Consolidated	$	3,871	$	2,454


	For The Three Months Ended				For The Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Radio broadcasting segment	31.3	%	33.0	%	29.7	%	31.8	%

Reach Media segment	9.3	%	8.7	%	9.1	%	8.7	%

Digital segment	15.1	%	14.1	%	14.4	%	12.8	%

Cable television segment	45.0	%	45.0	%	47.6	%	47.5	%

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


	Three Months
	Ended June 30,
	2022		2021		$ Change		% Change

	(Unaudited)
	(In thousands)
Net Revenue:
Radio Advertising	$	44,518	$	42,605	$	1,913	4.5	%
Political Advertising		1,839		500		1,339	267.8
Digital Advertising		17,881		15,016		2,865	19.1
Cable Television Advertising		29,120		22,968		6,152	26.8
Cable Television Affiliate Fees		24,318		25,396		(1,078)	(4.2)
Event Revenues & Other		1,134		1,108		26	2.3
Net Revenue (as reported)	$	118,810	$	107,593	$	11,217	10.4	%


Three Months Ended June 30,				Increase/(Decrease)
2022		2021
$	118,810	$	107,593	$	11,217	10.4	%


			Applicable
	Amount		Interest
Type of Debt	Outstanding		Rate
	(In millions)
7.375% Senior Secured Notes, net of issuance costs (fixed rate)	$	787.4	7.375	%
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)	$	29,500	$	59,000	$	59,000	$	59,000	$	59,000	$	863,917	$	1,129,417
Other operating contracts/agreements (2)		59,391		34,064		24,244		20,552		9,661		13,596		161,508
Operating lease obligations		6,614		11,563		10,333		5,615		3,313		5,538		42,976
Total	$	95,505	$	104,627	$	93,577	$	85,167	$	71,974	$	883,051	$	1,333,901

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 June 30, 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: August 12, 2022


	By:	/s/ Peter D. Thompson
		Peter D. Thompson
		Executive Vice President,
		Chief Financial Officer and Principal Accounting Officer
Date: August 12, 2022


	By:	/s/ Alfred C. Liggins, III
		Name:	Alfred C. Liggins, III
		Title:	President and Chief Executive Officer
Date: August 12, 2022