Revenue Performance - For the three months ended September 30, 2024, net revenues were approximately $110.4 million, a decrease of $7.4 million or 6.3% compared to $117.8 million for the same period in 2023[169]. - The Radio Broadcasting segment generated approximately $39.7 million in revenue for the three months ended September 30, 2024, down from $40.2 million in 2023, primarily due to a decrease in national advertising[169]. - Reach Media segment revenue decreased to approximately $10.2 million in the three months ended September 30, 2024, from $11.2 million in 2023, driven by lower demand and advertiser attrition[169]. - Digital segment revenue remained stable at approximately $20.4 million for both periods, with a decrease in national digital sales noted[169]. - Cable television segment revenue decreased to approximately $40.7 million for the three months ended September 30, 2024, down from $46.8 million in 2023, attributed to reduced audience viewership and subscriber churn[169]. - Political advertising revenue surged to $3.5 million in the three months ended September 30, 2024, compared to $1.1 million in 2023, reflecting a 222.2% increase[159]. - Net revenue for the nine months ended September 30, 2024, was approximately $332.5 million, a decrease of $24.8 million or 6.9% compared to $357.3 million for the same period in 2023[187]. - Revenue from the Radio Broadcasting segment increased by approximately $3.5 million to $118.1 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 $37.6 million, primarily due to decreased overall demand and advertiser attrition[187]. Operating Expenses and Losses - Total operating expenses for the three months ended September 30, 2024, were approximately $136.6 million, a decrease of $37.3 million or 21.5% from $173.9 million in 2023[167]. - The operating loss for the three months ended September 30, 2024, improved to $26.2 million from a loss of $56.1 million in 2023, representing a 53.3% reduction[167]. - Net loss attributable to common stockholders for the three months ended September 30, 2024, was $31.8 million, a decrease of $22.6 million or 41.6% compared to a loss of $54.4 million in 2023[167]. - Total operating expenses for the nine months ended September 30, 2024, were approximately $406.3 million, an increase of $10.6 million or 2.7% compared to $395.7 million in 2023[187]. - Operating loss for the nine months ended September 30, 2024, was approximately $73.7 million, an increase of $35.4 million or 92.3% compared to a loss of $38.3 million in 2023[187]. Impairment and Gains - The company recognized a gain of $3.5 million on the retirement of debt during the three months ended September 30, 2024, marking a significant financial maneuver[167]. - Impairment of goodwill, intangible assets, and long-lived assets was approximately $46.8 million for the three months ended September 30, 2024, down from approximately $85.4 million in the same period of 2023, a decrease of 45.2%[176]. - The company reported a gain on retirement of debt of approximately $18.8 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]. - The Company recognized an impairment loss of approximately $37.7 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 Company recorded an impairment charge of $37.7 million for broadcasting licenses and an impairment loss of approximately $9.1 million for the TV One trade name[252][253]. Cash Flow and Financing Activities - Net cash flows provided by operating activities were approximately $1.9 million for the nine months ended September 30, 2024, a decrease from $43.3 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 $79.3 million in 2023, primarily driven by the sale of the MGM investment[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) million in 2023, including repurchases of approximately $104.8 million of 2028 Notes[239]. - The company repurchased approximately $125.0 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 company reported a net gain on retirement of debt of approximately $3.6 million from repurchasing $14.5 million of its 2028 Notes at an average price of approximately 75.0% of par during the three months ended September 30, 2024[226]. 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 $1.0 million to $41.1 million for the three months ended September 30, 2024, compared to $40.1 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 $12.4 million for the three months ended September 30, 2024, compared to $10.4 million for the same period in 2023, an increase of 18.6%[173]. - Stock-based compensation expense decreased by approximately $1.1 million to $1.2 million for the three months ended September 30, 2024, compared to $2.2 million in the same period of 2023, a decline of 48.1%[174]. - Depreciation and amortization expense decreased by approximately $0.6 million to $1.2 million for the three months ended September 30, 2024, compared to $1.8 million for the same period in 2023[175]. - Interest income decreased by approximately $1.2 million to $1.1 million for the three months ended September 30, 2024, compared to $2.3 million in the same period of 2023, a decline of 51.8%[177]. - Interest expense decreased by approximately $2.3 million to $11.6 million for the three months ended September 30, 2024, compared to $14.0 million in the same period of 2023, a decrease of 16.7%[178]. - Stock-based compensation expense decreased by approximately $4.2 million to $3.6 million, primarily due to the timing of vesting of stock awards[191]. - Corporate selling, general and administrative expenses increased by approximately $7.7 million to $38.0 million, primarily due to higher third-party consulting and audit expenses[190]. Future Considerations and Risks - The company is considering the impact of macroeconomic conditions, including inflation and interest rates, which may adversely affect revenues[216]. - The Company is engaged in renewal negotiations for performing rights organization licenses, which could impact music license fees[260][261]. - 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[250]. - Cash flows from operations and other sources of liquidity are expected to be sufficient to meet foreseeable cash requirements[237]. Other Notable Information - The Company transitioned to a new secured overnight financing rate as the benchmark rate for future borrowings under the Current ABL Facility[234]. - The Company entered into multiple waivers and amendments to the Current ABL Facility due to delays in delivering financial reports, with the latest amendment setting a due date of June 17, 2024[231]. - The Current ABL Facility matures five years from its effective date or 91 days prior to the maturity of the Company's 2028 Notes, whichever occurs first[235]. - The Company had approximately $600.0 million of 2028 Notes outstanding as of September 30, 2024, with no other indebtedness reported[259]. - Total scheduled contractual obligations as of September 30, 2024, amounted to approximately $936.5 million, with $86.3 million not recorded on the balance sheet[268]. - Reach Media increased its ownership interest to 90% after repurchasing 50% of the non-controlling interest shareholders' shares on March 8, 2024[266]. - The Company has non-cancelable operating leases expiring over the next forty-eight years for various facilities[263]. - The fair value of the Employment Agreement Award was estimated at approximately $13.5 million as of September 30, 2024, down from $23.0 million as of December 31, 2023[256]. - The Company has 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 its Current ABL Facility, subject to certain limitations[270].
Urban One(UONEK) - 2024 Q3 - Quarterly Report