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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

Commission File No. 0-25969

Graphic

URBAN ONE, INC.

(Exact name of registrant as specified in its charter)

Delaware

52-1166660

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)

1010 Wayne Avenue,

14th Floor

Silver Spring, Maryland 20910

(Address of principal executive offices)

(301429-3200

Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes   No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes    No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer 

Non-accelerated filer

Smaller reporting company

 

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. 

Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act. Yes   No  

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, is as of the latest practicable date.

Class

    

Outstanding at June 3, 2024

 

Class A Common Stock, $.001 Par Value

 

9,853,672

 

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

 

34,910,815

 

TABLE OF CONTENTS

Page

PART I. FINANCIAL INFORMATION

Item 1.

Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2024 and 2023 (Unaudited)

5

Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended March 31, 2024 and 2023 (Unaudited)

6

Condensed Consolidated Balance Sheets as of March 31, 2024 (Unaudited) and December 31, 2023

7

Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2024 and 2023 (Unaudited)

8

Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023 (Unaudited)

9

Notes to the Condensed Consolidated Financial Statements (Unaudited)

10

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

27

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

40

Item 4.

Controls and Procedures

41

PART II. OTHER INFORMATION

Item 1.

Legal Proceedings

41

Item 1A.

Risk Factors

41

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

41

Item 3.

Defaults Upon Senior Securities

41

Item 4.

Mine Safety Disclosures

42

Item 5.

Other Information

42

Item 6.

Exhibits

42

SIGNATURES

43

2

CERTAIN DEFINITIONS

Unless otherwise noted, throughout this report, the terms “Urban One,” the “Company,” “we,” “our” and “us” refer to Urban One, Inc. together with its subsidiaries.

Cautionary Note Regarding Forward-Looking Statements

Our disclosure and analysis in this quarterly report on Form 10-Q concerning our operations, cash flows and financial position, contain forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements do not relay historical facts, but rather reflect our current expectations concerning future operations, results and events. All statements other than statements of historical fact are “forward-looking statements” including any projections of earnings, revenues or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new activities, services or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. You can identify some of these forward-looking statements by our use of words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “likely,” “may,” “estimates” and similar expressions. You can also identify a forward-looking statement in that such statements discuss matters in a way that anticipates operations, results or events that have not already occurred but rather will or may occur in future periods. We cannot guarantee that we will achieve any forward-looking plans, intentions, results, operations or expectations. Because these statements apply to future events, they are subject to risks and uncertainties, some of which are beyond our control that could cause actual results to differ materially from those forecasted or anticipated in the forward-looking statements. These risks, uncertainties and factors include (in no particular order), but are not limited to:

recession, economic volatility, financial market unpredictability and fluctuations in the United States and other world economies that may affect our business and financial condition, and the business and financial conditions of our advertisers;
our degree of leverage, certain cash commitments related thereto, and potential inability to finance strategic transactions given fluctuations in market conditions;
fluctuations in the local economies of the markets in which we operate (particularly our largest markets, Atlanta; Baltimore; Charlotte; Dallas; Houston; Indianapolis; and Washington, DC) or fluctuations within individual business sectors experiencing a downturn even in the absence of a broader recession could negatively impact our ability to meet our cash needs;
increased costs due to inflation or any changes in music royalty fees;
risks associated with the implementation and execution of our business diversification strategy, including our strategic actions with respect to expansion into gaming;
risks associated with our investments or potential investment in gaming businesses;
regulation by the FCC relative to maintaining our broadcasting licenses, enacting media ownership rules and enforcing of indecency rules;
changes in our key personnel and on-air talent;
increases in competition for and in the costs of our programming and content, including on-air talent and content production or acquisitions availability/costs;
financial losses that may be incurred due to impairment charges against our broadcasting licenses, goodwill, and other intangible assets;

3

increased competition for advertising revenues with other radio stations, broadcast and cable television, newspapers and magazines, outdoor advertising, direct mail, internet radio, satellite radio, smart phones, tablets, and other wireless media, the internet, social media, and other forms of advertising;
the impact of our acquisitions, dispositions and similar transactions, as well as consolidation in industries in which we and our advertisers operate;
developments and/or changes in laws and regulations, such as the California Consumer Privacy Act or other similar federal or state regulation through legislative action and revised rules and standards;
disruptions to our technology network including computer systems and software, whether by man-made or other disruptions of our operating systems, structures or equipment, including as we further develop alternative work arrangements, as well as natural events such as pandemic, severe weather, fires, floods and earthquakes;
material weaknesses identified in our internal control over financial reporting which, if not remediated, could result in material misstatements in our consolidated financial statements;
failure to meet the continued listing standards of NASDAQ Stock Market (“NASDAQ”), which could cause our common stock to be delisted, and which could have a material adverse effect on the liquidity and market price of our common stock and expose the Company to litigation; and
other factors mentioned in our filings with the Securities and Exchange Commission (“SEC”) including the factors discussed in detail in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023 (“Form 10-K”) filed June 7, 2024.

You should not place undue reliance on these forward-looking statements, which reflect our views based only on information currently available to us as of the date of this report. We undertake no obligation to publicly update or revise any forward-looking statements because of new information, future events or otherwise.

4

URBAN ONE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

(Unaudited)

Three Months Ended March 31, 

    

2024

    

2023

NET REVENUE

$

104,410

$

109,869

OPERATING EXPENSES:

 

 

Programming and technical, including stock-based compensation of $7 and $63, respectively

 

32,666

 

33,917

Selling, general and administrative, including stock-based compensation of $163 and $159, respectively

 

39,900

 

36,874

Corporate selling, general and administrative, including stock-based compensation of $1,214 and $3,056, respectively

 

17,106

 

11,586

Depreciation and amortization

 

1,850

 

2,597

Impairment of goodwill, intangible assets, and long-lived assets

 

16,775

Total operating expenses

 

91,522

 

101,749

Operating income

 

12,888

 

8,120

INTEREST INCOME

 

1,998

 

333

INTEREST EXPENSE

 

12,998

 

14,068

GAIN ON RETIREMENT OF DEBT

7,874

2,356

OTHER INCOME (EXPENSE), NET

 

886

 

(312)

Income (loss) from consolidated operations before provision for (benefit from) income taxes

 

10,648

 

(3,571)

PROVISION FOR (BENEFIT FROM) INCOME TAXES

 

2,502

 

(1,160)

NET INCOME (LOSS) FROM CONSOLIDATED OPERATIONS

8,146

(2,411)

LOSS FROM UNCONSOLIDATED JOINT VENTURE

(411)

NET INCOME (LOSS)

 

7,735

 

(2,411)

NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS

 

242

 

511

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS

$

7,493

$

(2,922)

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS (per share)

 

 

Basic

$

0.15

$

(0.06)

Diluted

$

0.15

$

(0.06)

WEIGHTED AVERAGE SHARES OUTSTANDING:

Basic

48,385,386

47,420,832

Diluted

49,921,803

47,420,832

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5

URBAN ONE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

(Unaudited)

Three Months Ended March 31, 

    

2024

    

2023

NET INCOME (LOSS)

$

7,735

$

(2,411)

OTHER COMPREHENSIVE INCOME (LOSS)

COMPREHENSIVE INCOME (LOSS)

$

7,735

$

(2,411)

LESS: COMPREHENSIVE INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS

 

242

 

511

COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS

$

7,493

$

(2,922)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

6

URBAN ONE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

As of

    

March 31, 2024

    

December 31, 2023

(Unaudited)

ASSETS

 

  

 

  

CURRENT ASSETS:

 

  

 

  

Cash and cash equivalents

$

155,265

$

233,090

Restricted cash

 

481

 

480

Trade accounts receivable, net of allowance for expected credit losses of $8,331 and $8,638, respectively

 

123,278

 

133,194

Prepaid expenses

 

10,893

 

9,504

Current portion of content assets

 

33,348

 

29,748

Other current assets

 

11,873

 

15,950

Total current assets

 

335,138

 

421,966

CONTENT ASSETS, NET

 

82,132

 

82,448

PROPERTY AND EQUIPMENT, NET

 

28,459

 

28,661

GOODWILL

 

216,599

 

216,599

RIGHT OF USE ASSETS, NET

 

32,918

 

31,649

RADIO BROADCASTING LICENSES

 

375,296

 

375,296

OTHER INTANGIBLE ASSETS, NET

 

47,813

 

49,104

OTHER ASSETS

 

7,668

 

5,450

Total assets

$

1,126,023

$

1,211,173

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY

 

 

CURRENT LIABILITIES:

 

 

Accounts payable

$

21,381

$

20,000

Accrued interest

 

8,054

 

22,342

Accrued compensation and related benefits

 

12,798

 

14,420

Current portion of content payables

 

20,320

 

22,389

Current portion of lease liabilities

 

10,941

 

10,648

Other current liabilities

 

40,269

 

42,831

Total current liabilities

 

113,763

 

132,630

LONG-TERM DEBT, net of original issue discount and issuance costs

 

642,579

 

716,246

CONTENT PAYABLES, net of current portion

 

4,982

 

3,402

LONG-TERM LEASE LIABILITIES

 

23,403

 

22,377

OTHER LONG-TERM LIABILITIES

 

24,290

 

24,995

DEFERRED TAX LIABILITIES, NET

 

23,440

 

20,938

Total liabilities

 

832,457

 

920,588

COMMITMENTS AND CONTINGENCIES (NOTE 8)

REDEEMABLE NONCONTROLLING INTERESTS

 

8,364

 

16,520

STOCKHOLDERS’ EQUITY:

 

 

Convertible preferred stock, $.001 par value, 1,000,000 shares authorized; no shares outstanding at March 31, 2024 and December 31, 2023

 

 

Common stock — Class A, $.001 par value, 30,000,000 shares authorized; 9,853,672 and 9,853,672 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively

 

10

 

10

Common stock — Class B, $.001 par value, 150,000,000 shares authorized; 2,861,843 and 2,861,843 shares issued and outstanding at March 31, 2024 and December 31, 2023

 

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 at March 31, 2024 and December 31, 2023, respectively

 

2

 

2

Common stock — Class D, $.001 par value, 150,000,000 shares authorized; 34,910,815 and 34,116,485 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively

 

35

 

34

Additional paid-in capital

 

1,011,030

 

1,007,387

Accumulated deficit

 

(725,878)

 

(733,371)

Total stockholders’ equity

 

285,202

 

274,065

Total liabilities, redeemable noncontrolling interests and stockholders’ equity

$

1,126,023

$

1,211,173

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

7

URBAN ONE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2024 and 2023

(In thousands, except share data)

(Unaudited)

Convertible

Common

Common

Common

Common

Accumulated Other

Additional

Total

Preferred

Stock

Stock

Stock

Stock

Comprehensive

 Paid-In

Accumulated

Stockholders’

    

Stock

    

Class A

    

Class B

    

Class C

    

Class D

    

Income

Capital

    

Deficit

    

Equity

BALANCE, as of December 31, 2023

$

$

10

$

3

$

2

$

34

$

$

1,007,387

$

(733,371)

$

274,065

Net income attributable to Urban One

7,493

7,493

Stock-based compensation expense

1,384

1,384

Repurchase of 396,052 shares of Class D common stock

(1,386)

(1,386)

Vesting of share-based payment awards upon grant

1

4,649

4,650

Adjustment of redeemable noncontrolling interests to estimated redemption value

 

 

 

 

 

 

(1,004)

 

 

(1,004)

BALANCE, as of March 31, 2024

$

$

10

$

3

$

2

$

35

$

$

1,011,030

$

(725,878)

$

285,202

Convertible

Common

Common

Common

Common

Accumulated Other

Additional

Total

Preferred

Stock

Stock

Stock

Stock

Comprehensive

Paid-In

Accumulated

Stockholders’

    

Stock

    

Class A

    

Class B

    

Class C

    

Class D

    

Income

Capital

    

Deficit

    

Equity

BALANCE, as of December 31, 2022

$

$

10

$

3

$

2

$

34

$

73,227

$

993,484

$

(736,010)

$

330,750

Cumulative effect of accounting change

589

589

BALANCE, as of January 1, 2023

10

3

2

34

73,227

993,484

(735,421)

331,339

Net loss attributable to Urban One

 

 

 

 

 

 

 

(2,922)

 

(2,922)

Stock-based compensation expense

 

 

 

 

 

2,558

 

 

2,558

Repurchase of 256,442 shares of Class D common stock

 

 

 

 

 

 

(1,324)

 

 

(1,324)

Vesting of share-based payment awards upon grant

 

 

 

 

 

 

3,234

 

 

3,234

Adjustment of redeemable noncontrolling interests to estimated redemption value

 

 

 

 

 

 

(1,308)

 

 

(1,308)

BALANCE, as of March 31, 2023

$

$

10

$

3

$

2

$

34

$

73,227

$

996,644

$

(738,343)

$

331,577

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

8

URBAN ONE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

Three Months Ended

March 31, 

    

2024

    

2023

CASH FLOWS FROM OPERATING ACTIVITIES:

 

  

 

  

Net income (loss)

$

7,735

$

(2,411)

Adjustments to reconcile net income (loss) to net cash from operating activities:

 

 

Bad debt expense

(104)

(1,278)

Depreciation and amortization

 

1,850

 

2,597

Amortization of debt financing costs

 

509

 

481

Amortization of launch assets

 

1,245

 

1,254

Amortization of content assets

 

11,444

 

13,158

Deferred income taxes

 

2,502

 

(1,178)

Amortization of right of use assets

2,645

2,140

Impairment of goodwill, intangible assets, and long-lived assets

 

 

16,775

Stock-based compensation expense

 

1,384

 

3,278

Gain on retirement of debt

(7,874)

(2,356)

Other

(935)

43

Effect of change in operating assets and liabilities, net of assets acquired:

 

 

Trade accounts receivable, net

 

10,020

 

19,903

Prepaid expenses and other current assets

 

1,067

 

(1,289)

Other assets

 

(3,448)

 

1,511

Content assets and payables

 

(15,217)

 

(10,388)

Accounts payable

 

1,615

 

(2,880)

Accrued interest

 

(14,303)

 

(14,135)

Accrued compensation and related benefits

 

(1,622)

 

(7,275)

Other liabilities

 

(990)

 

(846)

Net cash flows (used in) provided by operating activities

 

(2,477)

 

17,104

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

Purchase of property and equipment

(1,814)

 

(2,009)

Restricted cash derecognized in deconsolidation of joint venture

(26,000)

Proceeds from sale of joint venture interest

6,563

Proceeds from sale of equity securities

829

Cash receipts related to disposition of station

2,000

Investment in unconsolidated joint venture

(609)

Net cash flows provided by (used in) investing activities

 

406

 

(21,446)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

Purchase of ownership interest in Reach Media

 

(7,603)

 

Repayments of long-term debt

(66,225)

(22,281)

Repurchase of common stock

 

(1,386)

 

(1,324)

Release of secured letters of credit deposit

1,260

Payment of dividends to noncontrolling interest members of Reach Media

(1,799)

(2,001)

Net cash flows used in financing activities

 

(75,753)

 

(25,606)

NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

(77,824)

(29,948)

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period

233,570

101,879

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period

$

155,746

$

71,931

 

 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash paid for:

Interest

$

26,777

$

27,723

Income taxes, net of refunds

$

1,575

$

69

NON-CASH OPERATING, FINANCING AND INVESTING ACTIVITIES:

Operating right-of-use assets obtained in exchange for lease obligations

$

3,921

$

938

Non-cash content asset additions

$

5,339

$

3,730

Adjustment of redeemable noncontrolling interests to estimated redemption value

$

1,004

$

1,308

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

9

URBAN ONE, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.    ORGANIZATION:

Urban One, Inc., a Delaware corporation, and its subsidiaries (collectively, “Urban One,” the “Company,” “we,” “our” and/or “us”) is an urban-oriented, multi-media company that primarily targets African-American and urban consumers. Our core business is our radio broadcasting franchise which is the largest radio broadcasting operation that primarily targets African-American and urban listeners. As of March 31, 2024, we owned and/or operated 72 independently formatted, revenue producing broadcast stations (including 57 FM or AM stations, 13 HD stations, and the 2 low power television stations we operate), located in 13 of the most populous African-American markets in the United States. While a core source of our revenue has historically been and remains the sale of local and national advertising for broadcast on our radio stations, our strategy is to operate the premier multi-media entertainment and information content platform targeting African-American and urban consumers. Thus, we have diversified our revenue streams by making acquisitions and investments in other complementary media properties. Our diverse media and entertainment interests include TV One, LLC (“TV One”), which operates two cable television networks targeting African-American and urban viewers, TV One and CLEO TV; our 90.0% ownership interest in Reach Media, Inc. (“Reach Media”) which operates the Rickey Smiley Morning Show and our other syndicated programming assets, including the Get Up! Mornings with Erica Campbell Show and the DL Hughley Show; and Interactive One, LLC (“Interactive One”), our wholly owned digital platform serving the African-American community through social content, news, information, and entertainment websites, including its iONE Digital, Cassius and Bossip, HipHopWired and MadameNoire digital platforms and brands. Through our national multi-media operations, we provide advertisers with a unique and powerful delivery mechanism to communicate with African-American and urban audiences.

Our core radio broadcasting franchise operates under the brand “Radio One.” We also operate other brands, such as TV One, CLEO TV, Reach Media, iONE Digital, and One Solution, while developing additional branding reflective of our diverse media operations and our targeting of African-American and urban audiences.

As part of our condensed consolidated financial statements, consistent with our financial reporting structure and how the Company currently manages its businesses, we have provided selected financial information on the Company’s four reportable segments: (i) radio broadcasting; (ii) Reach Media; (iii) digital; and (iv) cable television. (See Note 7 – Segment Information of our condensed consolidated financial statements.)  

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) and with the instructions to Form 10-Q and Article 10 of Regulation S-X for interim financial information. In management’s opinion, the interim financial data presented herein include all adjustments (which include only normal recurring adjustments) necessary for a fair presentation. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with US GAAP have been omitted pursuant to such rules and regulations.

The accompanying unaudited condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes thereto as of and for the year ended December 31, 2023 included in the Company’s Annual Report on Form 10-K (“Form 10-K”). There have been no significant changes to the Company’s accounting policies as described in Note 3, Summary of significant accounting policies, in the notes to the consolidated financial statements in Item 8 of Part II of the Form 10-K.

All amounts presented in these condensed consolidated financial statements are expressed in thousands of U.S. dollars, except share and per share amounts and unless otherwise noted.

The Company's results are subject to seasonal fluctuations and typically, revenues are lowest in the first calendar quarter of the year. Due to this seasonality, the results for interim periods are not necessarily indicative of results to be expected for the full year. The Company experiences further seasonality in odd versus even years as there tends to be more political activity in even years which can have a positive impact on advertising revenues.

10

Principles of Consolidation

The consolidated financial statements include the accounts and operations of Urban One and subsidiaries in which Urban One has a controlling financial interest, which is generally determined when the Company holds a majority voting interest. All intercompany accounts and transactions have been eliminated in consolidation. Noncontrolling interests have been recognized where a controlling interest exists, but the Company owns less than 100% of the controlled entity.

The Company is required to include the financial statements of variable interest entities (“VIE”) in its consolidated financial statements. Under the VIE model, the Company consolidates an investment if it has control to direct the activities of the entity and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions. The most significant estimates and assumptions are used in determining: (i) estimates of future cash flows used to evaluate and recognize impairments; (ii) estimates of fair value of Employment Agreement Award (as defined below) and redeemable noncontrolling interest in Reach Media; (iii) deferred taxes and related valuation allowance, including uncertain tax positions; (iv) the amortization patterns of content assets; and (v) estimate allowance for expected credit losses on trade accounts receivable.

These estimates and assumptions may affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements. The Company bases these estimates on historical experience, current economic environment or various other assumptions that are believed to be reasonable under the circumstances. However, economic uncertainty and any disruption in financial markets increase the possibility that actual results may differ from these estimates.

Supplemental Cash Flow Information

The following table provides a reconciliation of cash, cash equivalents and restricted cash as reported within the condensed consolidated balance sheets to “Cash, cash equivalents and restricted cash, end of period” as reported within the condensed consolidated statements of cash flows:

Three Months Ended

March 31, 

2024

    

2023

(In thousands)

Cash and cash equivalents

$

155,265

$

71,455

Restricted cash

481

476

Total cash, cash equivalents, and restricted cash shown in Consolidated Statements of Cash Flows

$

155,746

$

71,931

Financial Instruments

As of March 31, 2024, and December 31, 2023, the Company’s financial instruments consisted of cash and cash equivalents, restricted cash, trade accounts receivable, asset-backed credit facility, long-term debt, and debt securities. The carrying amounts approximated fair value for each of these financial instruments as of March 31, 2024 and December 31, 2023, except for the Company’s long-term debt. On January 25, 2021, the Company borrowed $825.0 million in aggregate principal amount of senior secured notes due February 2028 and bearing interest at a rate of 7.375% (the “2028 Notes”). The 2028 Notes had a carrying value of approximately $650.0 million and fair value of approximately $553.3 million as of March 31, 2024, and had a carrying value of approximately $725.0 million and fair value of approximately $616.3 million as of December 31, 2023. The fair values of the 2028 Notes, classified as a Level 2 instrument, was determined based on the trading values of this instrument in an inactive market as of the reporting date. There were no borrowings outstanding on the Company’s asset-backed credit facility as of March 31, 2024 and December 31, 2023.

11

Revenue Recognition

The following table shows the sources of the Company’s net revenue for the three months ended March 31, 2024 and 2023:

Radio

Reach

Cable

(In thousands)

Broadcasting

Media

Digital

Television

Eliminations

Consolidated

Three Months Ended March 31, 2024

Net Revenue:

Radio advertising

$

33,754

$

8,382

$

-

$

-

$

(795)

$

41,341

Political advertising

1,167

48

 

22

-

-

1,237

Digital advertising

-

-

 

13,946

-

-

13,946

Cable television advertising

-

-

 

-

25,365

-

25,365

Cable television affiliate fees

-

-

 

-

20,787

-

20,787

Event revenues & other

1,430

42

 

-

73

189

1,734

Net revenue

$

36,351

$

8,472

$

13,968

$

46,225

$

(606)

$

104,410

Three Months Ended March 31, 2023

Net Revenue:

Radio advertising

$

33,841

$

10,288

$

-

$

-

$

(1,021)

$

43,108

Political advertising

249

-

47

-

-

296

Digital advertising

-

-

15,024

-

-

15,024

Cable television advertising

-

-

-

25,822

-

25,822

Cable television affiliate fees

-

-

-

23,837

-

23,837

Event revenues & other

1,090

629

-

18

45

1,782

Net revenue

$

35,180

$

10,917

$

15,071

$

49,677

$

(976)

$

109,869

Contract Assets and Liabilities

Contract assets and contract liabilities that are not separately stated in the Company’s consolidated balance sheets as of March 31, 2024 and December 31, 2023 were as follows:

    

March 31, 2024

    

December 31, 2023

(In thousands)

Contract assets:

 

  

 

  

Unbilled receivables

$

3,412

$

5,437

Contract liabilities:

 

 

Customer advances and unearned income

$

4,762

$

4,851

Reserve for audience deficiency

14,583

12,779

Unearned event income

 

9,037

 

4,864

Unbilled receivables consist of earned revenue that has not yet been billed. Contract assets are included in trade accounts receivable, net on the consolidated balance sheets. Customer advances and unearned income represent advance payments by customers for future services under contract that are generally incurred in the near term. For advertising sold based on audience guarantees, audience deficiency typically results in an obligation to deliver additional advertising units to the customer, generally within one year of the campaign end date. To the extent that audience guarantees are not met, a reserve for audience deficiency is recorded until such a time that the audience guarantee has been satisfied. Unearned event income represents payments by customers for upcoming events. Contract liabilities are included in other current liabilities on the consolidated balance sheets.

For customer advances and unearned income as of January 1, 2024, $2.0 million was recognized as revenue during the three months ended March 31, 2024. For the reserve for audience deficiency as of January 1, 2024, $1.0 million was recognized as revenue during the three months ended March 31, 2024. For unearned event income as of January 1, 2024, no revenue was recognized during the three months ended March 31, 2024.

12

Practical expedients and exemptions

The Company generally expenses employee sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within selling, general and administrative expenses on the condensed consolidated statements of operations. Agency and outside sales representative commissions were approximately $9.2 million for each of the three months ended March 31, 2024 and 2023.

The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, or (ii) contracts for which variable consideration is a sales-based or usage-based royalty promised in exchange for a license of intellectual property.

Launch Support

The cable television segment has entered into certain affiliate agreements requiring various payments for launch support. Launch support assets are used to initiate carriage under affiliation agreements and are amortized over the term of the respective contracts. The Company did not pay any launch support for carriage initiation during the three months ended March 31, 2024 and 2023. The weighted-average amortization period for launch support was approximately 8.1 years as of March 31, 2024 and December 31, 2023. The remaining weighted-average amortization period for launch support was 2.6 years and 2.9 years as of March 31, 2024 and December 31, 2023, respectively. Amortization is recorded as a reduction to revenue. Launch support asset amortization was approximately $1.2 million for each of the three months ended March 31, 2024 and 2023. Launch assets are included in other intangible assets on the condensed consolidated balance sheets, except for the portion of the unamortized balance that is expected to be amortized within one year which is included in other current assets.

Advertising and Promotions

The Company expenses advertising and promotional costs as incurred. Total advertising and promotional expenses were approximately $7.0 million and $7.1 million for the three months ended March 31, 2024 and 2023, respectively.

Earnings Per Share

Basic and diluted net income (loss) per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities: Class A, Class B, Class C and Class D common stock. The rights of the holders of Class A, Class B, Class C and Class D common stock are identical, except with respect to voting, conversion, and transfer rights.

Basic net income (loss) per share attributable to common stockholders is computed by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period.

For the calculation of diluted earnings per share, net income (loss) attributable to common stockholders for basic earnings per share (“EPS”) is adjusted by the effect of dilutive securities. Diluted net income (loss) per share attributable to common stockholders is computed by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding, including all potentially dilutive common shares. In periods of loss, there are no potentially dilutive common shares to add to the weighted-average number of common shares outstanding. The undistributed earnings or losses are allocated based on the contractual participation rights of the Class A, Class B, Class C and Class D common shares as if the earnings or losses for the year have been distributed. As the liquidation and dividend rights are identical, the undistributed earnings or losses are allocated on a proportionate basis, and as such, diluted and basic earnings per share is the same for each class of common stock under the two-class method.

13

The following table sets forth the calculation of basic and diluted earnings per share from continuing operations (in thousands, except share and per share data):

Three Months Ended March 31, 

    

2024