URBAN ONE, INC. REPORTS FOURTH QUARTER RESULTS

WASHINGTON, July 6, 2023 /PRNewswire/ -- Urban One, Inc. (NASDAQ: UONEK and UONE) today reported its results for the quarter ended December 31, 2022. Net revenue was approximately $132.6 million, an increase of 1.6% from the same period in 2021. The Company reported operating income of approximately $14.3 million for the three months ended December 31, 2022, compared to approximately $20.3 million for the three months ended December 31, 2021. Broadcast and digital operating income¹ was approximately $47.6 million, an increase of 7.9% from the same period in 2021. Net income was $856,000 or $0.02 per share (basic) compared to approximately $5.3 million or $0.10 per share (basic) for the same period in 2021. Adjusted EBITDA² was approximately $31.7 million for the three months ended December 31, 2022, compared to approximately $32.5 million for the same period in 2021.

Alfred C. Liggins, III, Urban One's CEO and President stated, "I was pleased that Adjusted EBITDA came in right on top of our full year guidance at $165.6 million, a new highwater mark for Urban One. Boosted by political advertising, our radio division outperformed the overall market by 360 basis points, and on a same station basis Q4 radio revenue was up approximately 14.1% year-over-year. Reach Media did not run their Fantastic Voyage cruise event in 2022, hence Q4 revenues were down year-over-year, but normalizing for that event Q4 BCF was down approximately $317,000 year-over-year. Our digital segment grew revenue by 24%, however margins were reduced by a combination of higher traffic acquisition, ad production, and video content costs. Our cable TV segment suffered from a combination of audience under-delivery against upfront commitments, timing of FVOD payments in Q4 2021, and attrition in local direct response advertising. This was partially offset by improved upfront CPM's. Paid cable subscriber churn was -10% vs Q4 2021. Despite the softer fourth quarter, our cable television segment Adjusted EBITDA of $105.3 million was the highest in our history, helping us to keep net leverage below 4.0x at 3.96x. Pro-forma for the sale of our interest in MGM National Harbor and the Indianapolis radio acquisition, net leverage was 3.21x.

As for our preliminary results for 2023, Q1 2023, same station radio segment revenue was up 2.0% on a same station basis, however we have seen a slow-down in Q2 which is currently pacing down -5.0% same station or -0.9% ex political. Year to date through May 2023, according to Miller Kaplan our radio markets are down -2.8% vs Urban One -2.9% same station. We will have the benefit of the Indianapolis acquisition in the comparisons for Q1 through Q3, which will help to offset that lack of political revenues in 2023, although the margins on political revenues are significantly higher. Revenues at Reach Media were up 8.8% in first quarter 2023 and will be further boosted in Q2 by the Fantastic Voyage. Our digital segment revenues were down 2.7% in first quarter, although they have bounced back up mid-single digits in Q2. We expect margins at digital to remain in the low 20% range, as TAC, content and employee costs normalize into a steady state. The audience under-delivery at TV One has continued into 2023, with advertising revenues down -15.9% for Q1 and down mid-to-high single digits for Q2. Our TV affiliate revenues in 2023 are down approximately 7% year to date. This will put pressure on the TV One EBITDA, which we currently expect to be in the range $88-90 million for full year 2023.

We will talk more about the full-year outlook for 2023 on our earnings call, but overall, I believe we will still compare favorably to pre-pandemic 2019 results, despite the off-cycle political revenues and general advertising market slow-down that the industry is experiencing."

As previously disclosed in the Current Report on Form 8-K filed with the SEC on April 7, 2023, the Company announced that in connection with the preparation of its financial statements for the year ended December 31, 2022, the Company's management, in consultation with its independent registered public accounting firm, re-evaluated its accounting for the valuation of its investment interest in MGM National Harbor (the "MGM Investment"), which the Company sold for cash proceeds of approximately $136.8 million on April 21, 2023. After further review of the Company's accounting for its MGM Investment, it was determined that adjustments are required to the Company's financial statements as of January 1, 2021 and for each of the annual and interim periods ended December 31, 2021 and September 30, 2022 (the "Affected Periods"), due to understatements in the value of the MGM Investment, and related tax effects. In addition to the adjustment related to the MGM Investment, the Company included corrections for misstatements that were deemed immaterial to any period presented in our previously issued financial statements. These misstatements are related to radio broadcasting license impairment, right of use assets, fair value of the Reach Media redeemable noncontrolling interest, amortization of certain launch assets, misclassifications of certain balance sheet items, and any related tax effects. The Company also corrected certain line items within the statements of cash flows and certain disclosures related to deferred tax assets and content assets for errors identified. See the Company's Annual Report on Form 10-K filed with the SEC on June 30, 2023, for more information related to the restatement, including descriptions of the misstatements and the impacts on the Company's consolidated financial statements.

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-K/A, 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.

Net revenue increased to approximately $132.6 million for the quarter ended December 31, 2022, from approximately $130.5 million for the same period in 2021. Net revenues from our radio broadcasting segment increased 23.8% compared to the same period in 2021. Net revenue from our radio broadcasting segment, excluding political advertising, increased 9.2% compared to the same period in 2021. Same station net revenue from our radio broadcasting segment, excluding political advertising, decreased 0.7% compared to the same period in 2021. We recognized approximately $11.9 million of revenue from our Reach Media segment during the three months ended December 31, 2022, compared to approximately $19.3 million for the same period in 2021. 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. We recognized approximately $49.7 million and $54.1 million of revenue from our cable television segment during the three months ended December 31, 2022, and 2021, respectively, due primarily to decreased advertising and affiliate sales. We recognized approximately $24.2 million in revenue for our digital segment during the three months ended December 31, 2022, compared to approximately $19.5 million in the same period in 2021, primarily from higher direct revenues.

The following chart indicates the sources of our net revenue for the three months ended December 31, 2022 and 2021.