Urban One(US:UONE)2019-05-10 19:16Financial Performance - Net revenue for the three months ended March 31, 2019, was $98,449,000, a decrease of 1.2% from $99,621,000 in 2018[178] - Broadcast and digital operating income increased to $34,491,000, up 6.1% from $32,497,000 in the same period last year[178] - Broadcast and digital operating income margin improved to 35.0%, compared to 32.6% in 2018[178] - Radio advertising revenue decreased by 4.9% to $42,439,000 from $44,622,000 in 2018[168] - Digital advertising revenue fell by 8.7% to $7,437,000, down from $8,146,000 in the previous year[168] - Cable television advertising revenue increased by 6.6% to $20,193,000, compared to $18,936,000 in 2018[168] - Consolidated net loss attributable to common stockholders improved to $(6,663,000) from $(22,555,000) in the prior year[178] - Adjusted EBITDA for the three months ended March 31, 2019, was $29,037,000, compared to $28,489,000 in 2018[178] - Revenue from the radio broadcasting segment decreased by 7.0% compared to the same period in 2018, while the cable television segment saw an increase to approximately $47.8 million from $46.2 million[181] - Total operating expenses decreased by 10.8% to $82.3 million for the three months ended March 31, 2019, compared to $92.3 million in the same period in 2018[180] - Operating income increased significantly by 120.3% to $16.1 million for the three months ended March 31, 2019, compared to $7.3 million in the same period in 2018[180] - Consolidated net loss decreased to $6.5 million for the three months ended March 31, 2019, compared to a net loss of $22.5 million in the same period in 2018, representing a 71.0% improvement[180] Cash Flow and Debt - Net cash flows provided by operating activities were approximately $16.3 million for the three months ended March 31, 2019, down from $22.0 million in the same period of 2018[202] - Net cash flows used in financing activities were approximately $25.0 million for the three months ended March 31, 2019, compared to $14.8 million for the same period in 2018[204] - The company repaid approximately $25.3 million in outstanding debt during the three months ended March 31, 2019[204] - The company has senior bank debt of $350.0 million maturing on April 18, 2023, and approximately $350.0 million outstanding in its 2022 Notes[223] - The company has a new $192.0 million unsecured credit facility and a $50.0 million loan secured by its interest in the MGM National Harbor Casino[223] Assets and Liabilities - As of March 31, 2019, the company had approximately $600.1 million in broadcast licenses and $245.6 million in goodwill, totaling $845.7 million, which represented approximately 66.5% of total assets[207] - The company recorded an increase in right of use (ROU) assets of approximately $49.8 million and an increase in lease liabilities of approximately $54.1 million upon the adoption of ASC 842[220] - Scheduled contractual obligations total $1,426.431 million as of March 31, 2019, with significant payments due in 2023 amounting to $621.073 million[230] - Approximately $122.5 million of other operating contracts and agreements has not been recorded on the balance sheet as of March 31, 2019[231] - The company has letters of credit totaling $788,000 under a reimbursement and security agreement for certain operating leases and insurance policies[233] Operational Highlights - The percentage of core radio business generated from local advertising increased to 62.7% from 61.4% in 2018[167] - The cable television segment accounted for 48.6% of consolidated net revenue, up from 46.4% in the previous year[166] - The company experienced net revenue declines in several markets, including Baltimore, Charlotte, and Detroit, while Atlanta and Washington DC markets showed growth[181] - The company generated approximately $1.4 million of broadcast and digital operating income from Reach Media during the three months ended March 31, 2019, compared to $794,000 in the same period of 2018[194] - The digital segment generated a broadcast and digital operating loss of $91,000 for the three months ended March 31, 2019, an improvement from a loss of approximately $2.2 million in the same period of 2018[194] Tax and Legal Matters - Provision for income taxes decreased significantly by 82.5% to approximately $2.2 million for the three months ended March 31, 2019, compared to $12.8 million in the same period in 2018[192] - The company achieved three years of cumulative pre-tax income as of March 31, 2019, which positively impacted the realizability of deferred tax assets[215] - The company has been named as a defendant in several legal actions, but management believes the outcomes will not materially affect financial position[232] Market and Risk Factors - Interest expense increased by 14.9% to approximately $22.2 million for the three months ended March 31, 2019, compared to $19.3 million in the same period in 2018[189] - Stock-based compensation decreased by 62.9% to $511,000 for the three months ended March 31, 2019, compared to $1.4 million in the same period in 2018[186] - Noncontrolling interests in income of subsidiaries increased by 278.8% to $125,000 for the three months ended March 31, 2019, compared to $33,000 in the same period in 2018[193] - Market risk exposure has not changed materially since December 31, 2018, as detailed in the Annual Report[234] - The company is in negotiations with BMI for a new royalty agreement, with potential adverse effects on costs if an agreement is not reached[225] - The company has non-cancelable operating leases expiring over the next 12 years, impacting future cash flows[226] - The company has various operating contracts and agreements, including employment and talent contracts, expiring over the next seven years[227]