Urban One, Inc. Reports Fourth Quarter Resul

March 6, 2018March 6, 2018 Zhane Squire

WASHINGTON, March 6, 2018 /PRNewswire/ — Urban One, Inc. (NASDAQ: UONEK and UONE) today reported its results for the quarter ended December 31, 2017. Net revenue was approximately $109.0 million, a decrease of 4.0% from the same period in 2016. Broadcast and digital operating income¹ was approximately $44.3 million, an increase of 2.8% from the same period in 2016. The Company reported operating income of approximately $20.6 million for the three months ended December 31, 2017, compared to $17.1 million for the same period in 2016. Net income was approximately $121.3 million or $2.63 per share (basic) compared to net loss of approximately $3.4 million or $0.07 per share (basic) for the same period in 2016. Adjusted EBITDA² was approximately $38.7 million for the three months ended December 31, 2017, compared to $30.9 million for the same period in 2016, an increase of 25.6%.

Alfred C. Liggins, III, Urban One’s CEO and President stated, “Overall, we produced a strong quarter from an Adjusted EBITDA standpoint, and as a result we were able to show full year Adjusted EBITDA growth, despite the challenging market conditions. Our core radio revenues were up slightly for the quarter, excluding the impact of political revenues. Our TV advertising revenues suffered from weak ratings delivery, which was somewhat offset by growth in affiliate revenues. Our digital business benefitted from the integration of our acquisition of the Bossip, Madame Noire and Hip Hop Wired brands, and was up significantly in both revenue and Adjusted EBITDA compared to prior year. We were able to control costs, most notably at TV One and Corporate. During the quarter, we repurchased a further $20 million of our 9.25% notes at a discount, and we remain strongly committed to reducing net leverage.”

RESULTS OF OPERATIONS

		Three Months Ended December 31,		Year Ended December 31,
		2017	2016	2017	2016
STATEMENT OF OPERATIONS		(unaudited)		(unaudited)
		(in thousands, except share data)		(in thousands, except share data)

	NET REVENUE	$ 109,036	$ 113,556	$ 440,041	$ 456,219
	OPERATING EXPENSES
	Programming and technical, excluding stock-based compensation	30,619	37,211	130,417	134,000
	Selling, general and administrative, excluding stock-based compensation	34,096	33,252	147,923	147,599
	Corporate selling, general and administrative, excluding stock-based compensation	12,525	15,107	41,171	47,532
	Stock-based compensation	2,701	1,091	4,647	3,410
	Depreciation and amortization	8,468	8,524	34,016	34,247
	Impairment of long-lived assets	–	1,287	29,148	1,287
	Total operating expenses	88,409	96,472	387,322	368,075
	Operating income	20,627	17,084	52,719	88,144
	INTEREST INCOME	40	40	200	214
	INTEREST EXPENSE	19,273	20,148	79,420	81,636
	GAIN ON SALE-LEASEBACK	–	–	(14,411)	–
	(GAIN) LOSS ON RETIREMENT OF DEBT	(1,174)	–	5,219	(2,646)
	OTHER INCOME, net	(1,863)	(852)	(6,608)	(928)
	Income (loss) before (benefit from) provision for income taxes and noncontrolling interest in income of subsidiaries	4,431	(2,172)	(10,701)	10,296
	(BENEFIT FROM) PROVISION FOR INCOME TAXES	(117,196)	1,315	(123,163)	9,580
	CONSOLIDATED NET INCOME (LOSS)	121,627	(3,487)	112,462	716
	NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS	343	(120)	575	1,139
	CONSOLIDATED NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	$ 121,284	$ (3,367)	$ 111,887	$ (423)

	AMOUNTS ATTRIBUTABLE TO COMMON STOCKHOLDERS
	CONSOLIDATED NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	$ 121,284	$ (3,367)	$ 111,887	$ (423)

	Weighted average shares outstanding – basic³	46,198,362	47,463,258	47,169,682	47,924,609
	Weighted average shares outstanding – diluted⁴	48,527,664	47,463,258	49,632,884	47,924,609


	Three Months Ended December 31,		Year Ended December 31,
	2017	2016	2017	2016
PER SHARE DATA – basic and diluted:	(unaudited)	(unaudited)	(unaudited)	(unaudited)
	(in thousands, except per share data)		(in thousands, except per share data)

Consolidated net income (loss) attributable to common stockholders (basic)	$ 2.63	$ (0.07)	$ 2.37	$ (0.01)

Consolidated net income (loss) attributable to common stockholders (diluted)	$ 2.50	$ (0.07)	$ 2.25	$ (0.01)

SELECTED OTHER DATA
Broadcast and digital operating income ¹	$ 44,321	$ 43,093	$ 161,701	$ 174,620
Broadcast and digital operating income margin (% of net revenue)	40.6%	37.9%	36.7%	38.3%

Broadcast and digital operating income reconciliation:

Consolidated net income (loss) attributable to common stockholders	$ 121,284	$ (3,367)	$ 111,887	$ (423)
Add back non-broadcast and digital operating income items included in consolidated net income (loss):
Interest income	(40)	(40)	(200)	(214)
Interest expense	19,273	20,148	79,420	81,636
(Benefit from) provision for income taxes	(117,196)	1,315	(123,163)	9,580
Corporate selling, general and administrative expenses	12,525	15,107	41,171	47,532
Stock-based compensation	2,701	1,091	4,647	3,410
Gain on sale-leaseback	–	–	(14,411)	–
(Gain) loss on retirement of debt	(1,174)	–	5,219	(2,646)
Other income, net	(1,863)	(852)	(6,608)	(928)
Depreciation and amortization	8,468	8,524	34,016	34,247
Noncontrolling interest in income (loss) of subsidiaries	343	(120)	575	1,139
Impairment of long-lived assets	–	1,287	29,148	1,287
Broadcast and digital operating income	$ 44,321	$ 43,093	$ 161,701	$ 174,620

Adjusted EBITDA²	$ 38,744	$ 30,857	$ 137,098	$ 136,405

Adjusted EBITDA reconciliation:

Consolidated net income (loss) attributable to common stockholders:	$ 121,284	$ (3,367)	$ 111,887	$ (423)
Interest income	(40)	(40)	(200)	(214)
Interest expense	19,273	20,148	79,420	81,636
(Benefit from) provision for income taxes	(117,196)	1,315	(123,163)	9,580
Depreciation and amortization	8,468	8,524	34,016	34,247
EBITDA	$ 31,789	$ 26,580	$ 101,960	$ 124,826
Stock-based compensation	2,701	1,091	4,647	3,410
Gain on sale-leaseback	–	–	(14,411)	–
(Gain) loss on retirement of debt	(1,174)	–	5,219	(2,646)
Other income, net	(1,863)	(852)	(6,608)	(928)
Noncontrolling interest in income (loss) of subsidiaries	343	(120)	575	1,139
Employment Agreement Award, incentive plan award expenses and other compensation*	4,984	2,240	8,858	8,042
Severance-related costs	373	212	1,629	856
Cost method investment income	1,591	419	6,081	419
Impairment of long-lived assets	–	1,287	29,148	1,287
Adjusted EBITDA	$ 38,744	$ 30,857	$ 137,098	$ 136,405

* Certain reclassifications have been made to prior year balances to conform to the current year presentation.
These reclassifications had no effect on previously reported consolidated net income or loss or any other statement of operations, balance sheet or cash flow amounts.

		December 31, 2017	December 31, 2016
		(unaudited)
		(in thousands)
SELECTED BALANCE SHEET DATA:
	Cash and cash equivalents and restricted cash	$ 37,811	$ 46,781
	Intangible assets, net	971,484	1,018,333
	Total assets	1,316,755	1,358,786
	Total debt (including current portion, net of original issue discount and issuance costs)	970,666	1,006,236
	Total liabilities	1,263,320	1,417,502
	Total stockholders’ equity (deficit)	42,655	(71,126)
	Redeemable noncontrolling interest	10,780	12,410

		December 31, 2017	Applicable Interest Rate
		(in thousands)
SELECTED LEVERAGE DATA:
	2017 Credit Facility, net of original issue discount and issuance costs of approximately $8.1 million (subject to variable rates) (a)	$ 339,289	5.70%
	9.25% senior subordinated notes due February 2020, net of original issue discount and issuance costs of approximately $1.3 million (fixed rate)	273,672	9.25%
	7.375% senior secured notes due April 2022, net of original issue discount and issuance costs of approximately $4.2 million (fixed rate)	345,833	7.375%
	Comcast Note due April 2019 (fixed rate)	11,872	10.47%

	(a) Subject to variable Libor plus a spread that is incorporated into the applicable interest rate set forth above.

Cautionary Note Regarding Forward-Looking Statements

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements represent management’s current expectations and are based upon information available to Urban One at the time of this release. These forward-looking statements involve known and unknown risks, uncertainties and other factors, some of which are beyond Urban One’s control, that may cause the actual results to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially are described in Urban One’s reports on Forms 10-K, 10-Q, 8-K and other filings with the Securities and Exchange Commission (the “SEC”). Urban One does not undertake any duty to update any forward-looking statements.

Net revenue consists of gross revenue, net of local and national agency and outside sales representative commissions. Agency and outside sales representative commissions are calculated based on a stated percentage applied to gross billing.

	Three Months Ended December 31,
	2017		2016		$ Change		% Change
	(Unaudited)
	(in thousands)
Net Revenue:
Radio Advertising	$	51,330	$	51,025	$	305	0.6%
Political Advertising		835		5,719		(4,884)	-85.4%
Digital Advertising		10,382		7,290		3,092	42.4%
Cable Television Advertising		18,502		22,687		(4,185)	-18.4%
Cable Television Affiliate Fees		26,289		25,326		963	3.8%
Event Revenues & Other		1,698		1,509		189	12.5%

Net Revenue (as reported)	$	109,036	$	113,556	$	(4,520)	-4.0%

Net revenue decreased to approximately $109.0 million for the quarter ended December 31, 2017, from approximately $113.6 million for the same period in 2016, a decrease of 4.0%. Net revenues from our radio broadcasting segment decreased 7.5% compared to the same period in 2016. We experienced net revenue growth most significantly in our Houston and Richmond markets with revenue declines most significantly in our Charlotte, Cincinnati, Columbus, Detroit, Indianapolis, Raleigh and St. Louis. We recognized approximately $45.2 million of revenue from our cable television segment during the quarter ended December 31, 2017, compared to approximately $48.0 million for the same period in 2016, with the decrease primarily from lower advertising sales. Net revenue from our Reach Media segment decreased approximately $1.4 million for the quarter ended December 31, 2017, compared to the same period in 2016 due primarily to weaker demand. Finally, net revenues for our digital segment increased approximately $3.1 million for the quarter ended December 31, 2017, compared to the same period in 2016, primarily from performance from our new digital acquisition.

Operating expenses, excluding depreciation and amortization, stock-based compensation and impairment of long-lived assets, decreased to approximately $77.2 million for the quarter ended December 31, 2017, down 9.7% from the approximately $85.6 million incurred for the comparable quarter in 2016. The operating expense decrease was primarily driven by a combined decrease of approximately $2.6 million.