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Urban One(UONE) - 2024 Q3 - Quarterly Report
UONEUrban One(UONE)2024-11-12 22:20
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Revenue Performance - For the three months ended September 30, 2024, net revenues were approximately 110.4million,adecreaseof6.3110.4 million, a decrease of 6.3% from 117.8 million in the same period of 2023[169]. - Radio advertising revenue for the three months ended September 30, 2024, was 44.99million,down3.644.99 million, down 3.6% from 46.65 million in the prior year[159]. - Political advertising revenue increased significantly by 222.2%, reaching 3.55millioncomparedto3.55 million compared to 1.10 million in the same period last year[159]. - Digital advertising revenue decreased by 4.1%, totaling 19.43millioncomparedto19.43 million compared to 20.27 million in the previous year[159]. - Cable television advertising revenue fell by 13.3%, amounting to 21.87million,downfrom21.87 million, down from 25.22 million in the prior year[159]. - Net revenue for the nine months ended September 30, 2024, was approximately 332.5million,adecreaseof332.5 million, a decrease of 24.8 million or 6.9% compared to 357.3millionforthesameperiodin2023[187].−RevenuefromtheRadioBroadcastingsegmentincreasedbyapproximately357.3 million for the same period in 2023[187]. - Revenue from the Radio Broadcasting segment increased by approximately 3.5 million to 118.1million,drivenbylocalpoliticaladvertisingandtheacquisitionofaHoustonstation[187].−RevenuefromtheReachMediasegmentdecreasedbyapproximately118.1 million, driven by local political advertising and the acquisition of a Houston station[187]. - Revenue from the Reach Media segment decreased by approximately 4.5 million to 37.6million,primarilyduetodecreaseddemandandadvertiserattrition[187].OperatingExpensesandLosses−Totaloperatingexpensesdecreasedby21.537.6 million, primarily due to decreased demand and advertiser attrition[187]. Operating Expenses and Losses - Total operating expenses decreased by 21.5% to 136.59 million from 173.94millioninthesameperiodlastyear[167].−TheoperatinglossforthethreemonthsendedSeptember30,2024,was173.94 million in the same period last year[167]. - The operating loss for the three months ended September 30, 2024, was 26.20 million, a significant improvement from a loss of 56.11millionintheprioryear[167].−OperatinglossfortheninemonthsendedSeptember30,2024,wasapproximately56.11 million in the prior year[167]. - Operating loss for the nine months ended September 30, 2024, was approximately 73.7 million, an increase of 35.4millionor92.335.4 million or 92.3% compared to a loss of 38.3 million in 2023[187]. - Total operating expenses for the nine months ended September 30, 2024, were approximately 406.3million,anincreaseof406.3 million, an increase of 10.6 million or 2.7% compared to 395.7millionin2023[187].NetLossandIncome−ThenetlossattributabletocommonstockholdersforthethreemonthsendedSeptember30,2024,was395.7 million in 2023[187]. Net Loss and Income - The net loss attributable to common stockholders for the three months ended September 30, 2024, was 31.80 million, compared to a loss of 54.41millioninthesameperiodof2023,reflectinga41.654.41 million in the same period of 2023, reflecting a 41.6% improvement[167]. - Net loss attributable to common stockholders for the three months ended September 30, 2024, was (31,798) thousand, compared to (54,411)thousandforthesameperiodin2023[210].−Netincomeattributabletonon−controllinginterestswasapproximately(54,411) thousand for the same period in 2023[210]. - Net income attributable to non-controlling interests was approximately 0.3 million for the three months ended September 30, 2024, down 52.1% from 0.7millionin2023[183].−Netincomeattributabletonon−controllinginterestswasapproximately0.7 million in 2023[183]. - Net income attributable to non-controlling interests was approximately 1.0 million for the nine months ended September 30, 2024, down from 2.0millionin2023,adecreaseof51.22.0 million in 2023, a decrease of 51.2%[200]. Expenses Breakdown - Programming and technical expenses were approximately 33.9 million for both the three months ended September 30, 2024, and 2023, indicating no change[170]. - Selling, general and administrative expenses increased by approximately 1.0millionto1.0 million to 41.1 million for the three months ended September 30, 2024, compared to 40.1millioninthesameperiodof2023,ariseof2.440.1 million in the same period of 2023, a rise of 2.4%[172]. - Corporate selling, general and administrative expenses rose by approximately 1.9 million to 12.4millionforthethreemonthsendedSeptember30,2024,reflectinganincreaseof18.612.4 million for the three months ended September 30, 2024, reflecting an increase of 18.6% compared to 10.4 million in 2023[173]. - Stock-based compensation expense decreased by approximately 1.1millionto1.1 million to 1.2 million for the three months ended September 30, 2024, a decline of 48.1% from 2.2millionin2023[174].−Depreciationandamortizationexpensedecreasedbyapproximately2.2 million in 2023[174]. - Depreciation and amortization expense decreased by approximately 0.6 million to 1.2millionforthethreemonthsendedSeptember30,2024,comparedto1.2 million for the three months ended September 30, 2024, compared to 1.8 million in 2023[175]. - Selling, general and administrative expenses increased by approximately 4.5millionor3.64.5 million or 3.6% to 131.1 million, driven by higher payroll and research costs related to the Houston station acquisition[189]. - Stock-based compensation expense decreased by approximately 4.2millionor53.74.2 million or 53.7% to 3.6 million, primarily due to the timing of vesting of stock awards[191]. Impairment and Gains - Impairment of goodwill and intangible assets was approximately 46.8millionforthethreemonthsendedSeptember30,2024,down45.246.8 million for the three months ended September 30, 2024, down 45.2% from 85.4 million in 2023[176]. - Impairment of goodwill and intangible assets was approximately 127.6million,anincreaseof127.6 million, an increase of 3.3 million or 2.6% compared to 124.3millionin2023[193].−Thecompanyrecordedagainonretirementofdebtofapproximately124.3 million in 2023[193]. - The company recorded a gain on retirement of debt of approximately 3.5 million for the three months ended September 30, 2024, compared to no gain in the same period of 2023[179]. - The company reported a gain on retirement of debt of approximately 18.8millionfortheninemonthsendedSeptember30,2024,comparedto18.8 million for the nine months ended September 30, 2024, compared to 2.4 million for the same period in 2023, representing a 696.7% increase[196]. Cash Flow and Liquidity - Cash, cash equivalents, and restricted cash balance was approximately 115.5millionasofSeptember30,2024,withnoborrowingsoutstandingontheCurrentABLFacility[215].−Netcashflowsprovidedbyoperatingactivitieswereapproximately115.5 million as of September 30, 2024, with no borrowings outstanding on the Current ABL Facility[215]. - Net cash flows provided by operating activities were approximately 1.9 million for the nine months ended September 30, 2024, a decrease from 43.3millioninthesameperiodof2023[236].−Netcashflowsusedininvestingactivitieswereapproximately43.3 million in the same period of 2023[236]. - Net cash flows used in investing activities were approximately (1.7) million for the nine months ended September 30, 2024, compared to 79.3millionin2023,primarilydrivenbythesaleoftheMGMinvestmentin2023[238].−Netcashflowsusedinfinancingactivitieswereapproximately79.3 million in 2023, primarily driven by the sale of the MGM investment in 2023[238]. - Net cash flows used in financing activities were approximately (118.2) million for the nine months ended September 30, 2024, compared to (28.3)millionin2023,includingrepurchasesofapproximately(28.3) million in 2023, including repurchases of approximately 104.8 million of 2028 Notes[239]. Debt and Financing - The company repurchased approximately 125.0millionofits2028Notesatanaveragepriceofapproximately83.8125.0 million of its 2028 Notes at an average price of approximately 83.8% of par during the nine months ended September 30, 2024, resulting in a net gain on retirement of debt of approximately 18.8 million[227]. - The Current ABL Facility provides for up to 50.0millioninrevolvingloanborrowings,withnobalanceoutstandingasofSeptember30,2024[228].−TheCompanyissubjecttospeculative−gradecreditratings,whichmayimpactborrowingcostsandfinancingavailability[240].−TheCompanyhadapproximately50.0 million in revolving loan borrowings, with no balance outstanding as of September 30, 2024[228]. - The Company is subject to speculative-grade credit ratings, which may impact borrowing costs and financing availability[240]. - The Company had approximately 600.0 million of 2028 Notes outstanding as of September 30, 2024, with no other indebtedness reported[259]. Impairment Assessments - The Company recognized an impairment loss of approximately 37.7millionassociatedwith9radiomarketswithintheRadioBroadcastingsegmentforthethreemonthsendedSeptember30,2024[244].−AsofSeptember30,2024,thefairvalueofonereportingunitexceededitscarryingvaluebylessthan1037.7 million associated with 9 radio markets within the Radio Broadcasting segment for the three months ended September 30, 2024[244]. - As of September 30, 2024, the fair value of one reporting unit exceeded its carrying value by less than 10%, indicating potential risk for future impairment assessments[250]. - The Company performed a quantitative impairment assessment for broadcasting licenses, utilizing a discounted cash flow analysis across 13 radio markets[243]. - The Company recorded an impairment charge of 37.7 million for broadcasting licenses and an impairment loss of approximately 9.1millionfortheTVOnetradename[252][253].−ThediscountrateusedintheimpairmentassessmentfortheTVOnetradenamewas11.09.1 million for the TV One trade name[252][253]. - The discount rate used in the impairment assessment for the TV One trade name was 11.0%, with a revenue growth rate range of (10.3)% to (0.1)% and a terminal growth rate of (1.5)%[255]. Other Financial Information - Total scheduled contractual obligations as of September 30, 2024, amounted to approximately 936.5 million, with 86.3millionnotrecordedonthebalancesheetduetonotmeetingrecognitioncriteria[268].−TheCompanyisengagedinongoingrenewalnegotiationsforperformingrightsorganizationlicenses,whichcouldimpactmusiclicensefees[260][261].−ReachMediaincreaseditsownershipinterestto9086.3 million not recorded on the balance sheet due to not meeting recognition criteria[268]. - The Company is engaged in ongoing renewal negotiations for performing rights organization licenses, which could impact music license fees[260][261]. - Reach Media increased its ownership interest to 90% after repurchasing 50% of the non-controlling interest shareholders' shares on March 8, 2024[266]. - The fair value of the Employment Agreement Award was estimated at approximately 13.5 million as of September 30, 2024, down from 23.0millionasofDecember31,2023[256].−TheCompanyhasnon−cancelableoperatingleasesexpiringoverthenextforty−eightyearsforvariousfacilities[263].−TheCompanyenteredintoanewagreementregardingtheFantasticVoyageeffectiveAugust12,2024,forcruisesstartingin2025[269].−TheCompanyhasaletterofcreditcapacityofupto23.0 million as of December 31, 2023[256]. - The Company has non-cancelable operating leases expiring over the next forty-eight years for various facilities[263]. - The Company entered into a new agreement regarding the Fantastic Voyage effective August 12, 2024, for cruises starting in 2025[269]. - The Company has a letter of credit capacity of up to 5.0 million under the Current ABL Facility, subject to certain limitations[270].