PART I. FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements Urban One reported $104.4 million net revenue for Q1 2024, shifting from a $2.9 million net loss to $7.5 million net income, with total assets decreasing to $1.13 billion and operating cash flow turning negative $2.5 million Condensed Consolidated Statements of Operations For Q1 2024, Urban One's net revenue decreased by 4.9% to $104.4 million, while operating income increased to $12.9 million from $8.1 million due to the absence of a $16.8 million impairment charge, resulting in net income attributable to common stockholders of $7.5 million or $0.15 per diluted share Consolidated Statements of Operations (Q1 2024 vs. Q1 2023) | Financial Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :--- | :--- | :--- | | Net Revenue | $104,410 | $109,869 | | Total operating expenses | $91,522 | $101,749 | | Impairment of assets | $0 | $16,775 | | Operating income | $12,888 | $8,120 | | Gain on retirement of debt | $7,874 | $2,356 | | Net income (loss) attributable to common stockholders | $7,493 | $(2,922) | | Diluted EPS | $0.15 | $(0.06) | Condensed Consolidated Balance Sheets As of March 31, 2024, Urban One's total assets decreased to $1.13 billion from $1.21 billion at year-end 2023, primarily due to reduced cash, while total liabilities decreased to $832.5 million from $920.6 million mainly from debt reduction, and total stockholders' equity slightly increased to $285.2 million Balance Sheet Summary | Account | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $155,265 | $233,090 | | Total current assets | $335,138 | $421,966 | | Total assets | $1,126,023 | $1,211,173 | | Long-term debt, net | $642,579 | $716,246 | | Total liabilities | $832,457 | $920,588 | | Total stockholders' equity | $285,202 | $274,065 | Condensed Consolidated Statements of Cash Flows For Q1 2024, net cash used in operating activities was $2.5 million, a sharp decline from $17.1 million provided in the prior year, with net cash used in financing activities significantly increasing to $75.8 million primarily due to debt repayments and an ownership interest purchase Cash Flow Summary (Q1 2024 vs. Q1 2023) | Cash Flow Activity | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | | :--- | :--- | :--- | | Net cash flows (used in) provided by operating activities | $(2,477) | $17,104 | | Net cash flows provided by (used in) investing activities | $406 | $(21,446) | | Net cash flows used in financing activities | $(75,753) | $(25,606) | | Net decrease in cash | $(77,824) | $(29,948) | | Cash, cash equivalents and restricted cash, end of period | $155,746 | $71,931 | Notes to the Condensed Consolidated Financial Statements The notes detail Urban One's multi-media structure, revenue sources, acquisitions, $650 million senior secured notes, segment performance, and subsequent NASDAQ non-compliance notices for delayed filings - The company operates as an urban-oriented, multi-media company with four reportable segments: radio broadcasting, Reach Media, digital, and cable television2527 Net Revenue by Segment (Q1 2024 vs Q1 2023) | Segment | Q1 2024 Net Revenue (in thousands) | Q1 2023 Net Revenue (in thousands) | | :--- | :--- | :--- | | Radio Broadcasting | $36,351 | $35,180 | | Reach Media | $8,472 | $10,917 | | Digital | $13,968 | $15,071 | | Cable Television | $46,225 | $49,677 | | Consolidated | $104,410 | $109,869 | - During Q1 2024, the company repurchased $75.0 million of its 2028 Notes at an average price of 88.3% of par, resulting in a net gain of approximately $7.9 million76 - Subsequent to the quarter end, the company received non-compliance notices from NASDAQ for failure to timely file its 2023 Form 10-K and Q1 2024 Form 10-Q, with a deadline of June 7, 2024, to submit a compliance plan111112 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes the 5.0% decrease in Q1 2024 net revenue to declines in Reach Media, digital, and cable television, partially offset by radio broadcasting, while operating expenses decreased 10.1% due to the absence of a $16.8 million impairment charge, and liquidity is primarily from cash from operations and an undrawn $50.0 million ABL facility Results of Operations Net revenue for Q1 2024 decreased by $5.5 million (5.0%) to $104.4 million, driven by declines in Cable Television, Reach Media, and Digital, while operating income rose to $12.9 million due to the absence of a $16.8 million impairment charge, and Adjusted EBITDA decreased by 28.9% to $21.5 million Net Revenue by Source (Q1 2024 vs Q1 2023) | Revenue Source | Q1 2024 (in thousands) | Q1 2023 (in thousands) | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Radio advertising | $41,341 | $43,108 | $(1,767) | (4.1)% | | Political advertising | $1,237 | $296 | $941 | 317.9% | | Digital advertising | $13,946 | $15,024 | $(1,078) | (7.2)% | | Cable television advertising | $25,365 | $25,822 | $(457) | (1.8)% | | Cable television affiliate fees | $20,787 | $23,837 | $(3,050) | (12.8)% | | Total Net Revenue | $104,410 | $109,869 | $(5,459) | (5.0)% | - Corporate selling, general and administrative expenses increased by $7.4 million (86.3%) primarily due to higher third-party consulting and audit expenses133 Non-GAAP Performance Metrics (Q1 2024 vs Q1 2023) | Metric | Q1 2024 (in thousands) | Q1 2023 (in thousands) | | :--- | :--- | :--- | | Broadcast and digital operating income | $32,014 | $39,300 | | Adjusted EBITDA | $21,545 | $30,285 | Liquidity and Capital Resources As of March 31, 2024, the company had $155.7 million in cash, with primary liquidity from operations and an undrawn $50.0 million asset-backed credit facility, and used cash to repurchase $75.0 million of its 2028 Notes and acquire an additional 10% interest in Reach Media for $7.6 million - Primary sources of liquidity are cash from operations and a $50.0 million asset-backed credit facility, which had no outstanding balance as of March 31, 2024156169 - In Q1 2024, the company repurchased $75.0 million of its 2028 Notes at an average price of 88.3% of par168 - On March 8, 2024, the company paid approximately $7.6 million to increase its ownership in Reach Media to 90% after noncontrolling shareholders exercised 50% of their Put Right108178 Capital and Commercial Commitments As of March 31, 2024, the company has significant contractual obligations totaling approximately $1.04 billion, primarily comprising $833.8 million for its 7.375% Senior Secured Notes, $150.1 million for operating contracts, and $51.4 million for operating leases Contractual Obligations as of March 31, 2024 | Contractual Obligations | Total (in thousands) | | :--- | :--- | | 7.375% Subordinated Notes (Principal & Interest) | $833,762 | | Other operating contracts/agreements | $150,101 | | Operating lease obligations | $51,437 | | Total | $1,035,300 | - Of the total operating contracts, approximately $96.4 million is not recorded on the balance sheet as of March 31, 2024, as it does not meet recognition criteria, including commitments for content, employment, and other agreements193 Item 3. Quantitative and Qualitative Disclosures About Market Risk This section is not required for smaller reporting companies, and therefore no disclosure is provided - Disclosure is not required for smaller reporting companies195 Item 4. Controls and Procedures Management concluded that the company's disclosure controls and procedures were not effective as of March 31, 2024, due to previously identified material weaknesses in internal control over financial reporting, with remediation efforts underway but not yet fully completed - The CEO and CFO concluded that the Company's disclosure controls and procedures were not effective as of March 31, 2024, due to material weaknesses in internal control over financial reporting197 - Remediation efforts during the quarter included hiring a Vice President – Finance, Corporate Controller and continuing to engage external resources to augment the accounting team198 PART II. OTHER INFORMATION Item 1. Legal Proceedings The company is involved in various routine legal and administrative proceedings incidental to its business, which management believes will not have a material adverse effect on its financial condition or results of operations - The company reports involvement in routine legal proceedings but does not expect them to have a material adverse effect on its business or financial condition200 Item 1A. Risk Factors There have been no changes to the company's risk factors from those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2023, which was filed on June 7, 2024 - There have been no changes to risk factors from those disclosed in the Form 10-K for the year ended December 31, 2023201 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the period - None202 Item 3. Defaults Upon Senior Securities The company reported no defaults upon senior securities during the period - None203 Item 4. Mine Safety Disclosures This item is not applicable to the company - Not applicable204 Item 5. Other Information During the first quarter of 2024, none of the company's directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - No directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the three months ended March 31, 2024205 Item 6. Exhibits The report lists several exhibits filed with the SEC, including the CEO's employment agreement, certifications by the CEO and CFO pursuant to the Sarbanes-Oxley Act, and the financial information formatted in Inline XBRL - Exhibits filed include the CEO's employment agreement and Sarbanes-Oxley Act certifications206
Urban One(UONEK) - 2024 Q1 - Quarterly Report