URBAN ONE, INC. REPORTS FOURTH QUARTER RESULTS

WASHINGTON, March 3, 2022 /PRNewswire/ -- Urban One, Inc. (NASDAQ: UONEK and UONE) today reported its results for the quarter ended December 31, 2021. Net revenue was approximately $131.0 million, an increase of 15.3% from the same period in 2020. The Company reported operating income of approximately $22.4 million for the three months ended December 31, 2021, compared to approximately $34.5 million for the three months ended December 31, 2020. Broadcast and digital operating income¹ was approximately $44.1 million, a decrease of 14.9% from the same period in 2020. Net income was approximately $6.6 million or $0.13 per share (basic) compared to approximately $26.4 million or $0.58 per share (basic) for the same period in 2020. Adjusted EBITDA² was approximately $32.5 million for the three months ended December 31, 2021, compared to approximately $41.7 million for the same period in 2020.

Alfred C. Liggins, III, Urban One's CEO and President stated, "We had another very strong quarter, with revenue exceeding expectations, allowing us to significantly exceed our previous Adjusted EBITDA guidance for the year of $140-$145 million. There was some noise in the expenses, predominantly related to returning events, TV programming amortization and annual staff bonuses, all of which were anticipated and factored into our guidance. Demand for our audience remains extremely robust across the platform, and, excluding political, advertising revenues for the quarter were up double-digit percentages in all of our operating segments. Digital revenues were up 42.9%, and we exceeded $50 million in annual digital revenue for the first time. Cable TV revenues were up 43.6% helped by strong upfront demand and higher average unit rates across both TV One and Cleo. Looking back at pre-pandemic revenues, when we aggregate our radio broadcasting, syndication, events and digital operations, net revenues were up 25% compared to Q4 2019, and Adjusted EBITDA up 21%. We expect to continue to exceed pre-pandemic revenues and Adjusted EBITDA in 2022, and this is supported by first quarter 2022 core radio pacings up low double digits, and up mid-teens including digital revenues."

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, 10-Q/A, 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.

The COVID-19 pandemic could have an impact on certain of our revenue and alternative revenue sources on a going forward basis.  While parts of the country are recovering, other parts could see a resurgence of the pandemic and this could impact our results of operations, particularly in our larger markets such as Dallas, Houston and Atlanta. During the early portion of the pandemic, a number of advertisers across a variety of significant advertising categories reduced advertising spend due to the pandemic. This has been particularly true within our radio segment which derives substantial revenue from local advertisers, including in areas such as Texas, Ohio and Georgia. The economies in these areas were hit particularly hard due to social distancing and other government interventions. Further, the COVID-19 pandemic has caused a shift in the way people work and commute, which in some instances has altered demand for our broadcasting radio advertising. Finally, the COVID-19 outbreak caused the postponement or cancellation of certain of our tent pole special events or otherwise impaired or limited ticket sales for such events. A resurgence could have a similar future impact. We do not carry business interruption insurance to compensate us for losses and such losses may continue to occur as a result of the ongoing and fluctuating nature of the COVID-19 pandemic. New outbreaks or surges in new cases due to variants in the markets in which we operate could have material impacts on our liquidity, operations including potential impairment of assets, and our financial results.  Likewise, our income from our investment in MGM National Harbor Casino has at times been negatively impacted by closures and limitations on occupancy imposed by state and local governmental authorities.

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.

Net revenue increased to approximately $131.0 million for the quarter ended December 31, 2021, from approximately $113.5 million for the same period in 2020. Net revenues from our radio broadcasting segment decreased 11.6% compared to the same period in 2020. The decrease in net revenue in our radio broadcasting segment was primarily due to political revenue that did not return in 2021. Net revenue excluding political, from our radio broadcasting segment increased 15.5% compared to the same period in 2020. We recognized approximately $54.6 million of revenue from our cable television segment during the three months ended December 31, 2021, compared to approximately $45.6 million for the same period in 2020 with increases in both advertising and affiliate sales. We recognized approximately $19.3 million of revenue from our Reach Media segment during the three months ended December 31, 2021, compared to approximately $10.3 million for the same period in 2020. The Fantastic Voyage took place during the fourth quarter of 2021 and Reach Media recognized approximately $7.0 million in revenue from operating the event. Finally, net revenues for our digital segment increased approximately $4.7 million for the three months ended December 31, 2021, compared to the same period in 2020, primarily due to an increase in direct revenues.

Operating expenses, excluding depreciation and amortization, stock-based compensation and impairment of long-lived assets, increased to approximately $106.1 million for the quarter ended December 31, 2021, up 43.1% from the approximately $74.1 million incurred for the comparable quarter in 2020. The overall operating expense increase was driven by higher programming and technical expenses, higher selling, general and administrative expenses and higher corporate selling, general and administrative expenses.

During the quarter ended September 30, 2020, we began to reinstate certain cost-cutting measures that were taken during the preliminary phases of the pandemic such as furloughs, layoffs and salary reductions. Continuing throughout 2021, as the economy began to recover, we also reversed certain other expense reduction measures including increasing travel and entertainment expenses, merit raises, marketing spend and programming/production costs, and special event costs. As a result of the continued reopening of the economy and corresponding increases in revenue, we've incurred an increase in the following expenses: approximately $5.9 million in employee compensation expenses, $5.8 million in higher program content amortization expense at our cable television segment, $7.1 million in special event costs, $1.4 million in marketing spend, $1.7 million in contract labor, talent costs and consulting fees and $4.2 million in variable expenses. Finally, the increase in corporate selling, general and administrative expenses for the three months ended December 31, 2021, compared to the same period in 2020 is primarily due to an increase in compensation expense of approximately $3.5 million related to the employment agreement award and expenses related to corporate development activities in connection with potential gaming and other similar business activities. The Company has incurred approximately $1.9 million in casino chase costs for the quarter ended December 31, 2021.

Depreciation and amortization expense remained flat at approximately $2.3 million for the quarters ended December 31, 2021 and 2020. 

Interest expense decreased to approximately $15.9 million for the quarter ended December 31, 2021, compared to approximately $18.7 million for the quarter ended December 31, 2020. The Company made cash interest payments of $187,000 for the quarter ended December 31, 2021, compared to cash interest payments of approximately $23.4 million on its outstanding debt for the quarter ended December 31, 2020. As previously announced, on January 25, 2021, the Company closed on new senior secured notes (the "2028 Notes"). The proceeds from the 2028 Notes were used to prepay in full: (1) the 2017 Credit Facility; (2) the 2018 Credit Facility; (3) the MGM National Harbor Loan; (4) the remaining amounts of our 7.375% Notes; and (5) our 8.75% Notes that were issued in the November 2020 Exchange Offer. 

For the three months ended December 31, 2021, we recorded a provision for income taxes of approximately $1.2 million on pre-tax income from continuing operations of approximately $8.5 million, which results in a tax rate of 14.3%. For the three months ended December 31, 2020, we recorded a benefit from income taxes of approximately $13.0 million on pre-tax income from continuing operations of approximately $14.2 million, which results in a tax rate of (91.4)%. The Company paid $360,000 in taxes for the quarter ended December 31, 2021, and received a net tax refund of $395,000 for the quarter ended December 31, 2020.

Other income, net, was approximately $2.0 million and $1.3 million for the three months ended December 31, 2021 and 2020, respectively. We recognized other income in the amount of approximately $2.0 million and $1.6 million for the three months ended December 31, 2021 and 2020, respectively, related to our MGM investment.

Other pertinent financial information includes capital expenditures of approximately $2.1 million and $622,000 for the quarters ended December 31, 2021 and 2020, respectively. 

During the three months ended December 31, 2021 and 2020, the Company did not repurchase any shares of Class A or Class D common stock.

The Company, in connection with its prior 2009 stock option and restricted stock plan and its current 2019 Equity and Performance Incentive Plan (the "2019 Plan"), is authorized to purchase shares of Class D common stock to satisfy employee tax obligations in connection with the vesting of share grants under the plan. During the three months ended December 31, 2021, the Company executed a Stock Vest Tax Repurchase of 2,530 shares of Class D Common Stock in the amount of $9,000. During the three months ended December 31, 2020, the Company executed a Stock Vest Tax Repurchase of 4,225 shares of Class D Common Stock in the amount of $5,000.

Supplemental Financial Information:
For comparative purposes, the following more detailed, unaudited statements of operations for the three months and year ended December 31, 2021 and 2020 are included.

Urban One, Inc. will hold a conference call to discuss its results for the fourth fiscal quarter of 2021. The conference call is scheduled for Thursday, March 03, 2022 at 10:00 a.m. EST. To participate on this call, U.S. callers may dial toll-free 1-877-226-8215; international callers may dial direct (+1) 409-207-6982.  The Access Code is 7494333.

A replay of the conference call will be available from 1:00 p.m. ESTMarch 03, 2022 until 12:00 a.m. ESTMarch 07, 2022. Callers may access the replay by calling 1-866-207-1041; international callers may dial direct (+1) 402-970-0847. The replay Access Code is 2519146.

Access to live audio and a replay of the conference call will also be available on Urban One's corporate website at www.urban1.com. The replay will be made available on the website for seven days after the call.

Urban One, Inc. (urban1.com), together with its subsidiaries, is the largest diversified media company that primarily targets Black Americans and urban consumers in the United States. The Company owns TV One, LLC (tvone.tv), a television network serving more than 59 million households, offering a broad range of original programming, classic series and movies designed to entertain, inform and inspire a diverse audience of adult Black viewers. As of December 31, 2021, we owned and/or operated 64 independently formatted, revenue producing broadcast stations (including 54 FM or AM stations, 8 HD stations, and the 2 low power television stations we operate) branded under the tradename "Radio One" in 13 urban markets in the United States. Through its controlling interest in Reach Media, Inc. (blackamericaweb.com), the Company also operates syndicated programming including the Rickey Smiley Morning Show, the Russ Parr Morning Show and the DL Hughley Show. In addition to its radio and television broadcast assets, Urban One owns iOne Digital (ionedigital.com), our wholly owned digital platform serving the African-American community through social content, news, information, and entertainment websites, including its Cassius, Bossip, HipHopWired and MadameNoire digital platforms and brands. We also have invested in a minority ownership interest in MGM National Harbor, a gaming resort located in Prince George's County, Maryland. Through our national multi-media operations, we provide advertisers with a unique and powerful delivery mechanism to the African-American and urban audiences.

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SOURCE Urban One, Inc.