Urban One, Inc. Reports Third Quarter Results

WASHINGTON, Nov. 7, 2019 /PRNewswire/ -- Urban One, Inc. UONEK today reported its results for the quarter ended September 30, 2019. Net revenue was approximately $111.1 million, an increase of 0.3% from the same period in 2018. Broadcast and digital operating income¹ was approximately $44.8 million, an increase of 3.2% from the same period in 2018. The Company reported operating income of approximately $32.5 million for the three months ended September 30, 2019, compared to approximately $32.1 million for the same period in 2018. Net income was approximately $5.4 million or $0.12 per share (basic) compared to net income of approximately $23.0 million or $0.51 per share (basic) for the same period in 2018. Adjusted EBITDA² was approximately $40.0 million for the three months ended September 30, 2019, compared to approximately $37.8 million for the same period in 2018.

(PRNewsfoto/Urban One, Inc.)

Alfred C. Liggins, III, Urban One's CEO and President stated, "During the third quarter we completed the sale of WDMK to Beasley Broadcasting, as a result of which our cash position improved and net leverage was reduced. On a same station basis, our third quarter radio revenues were up 4.2%, and I was pleased that we were able to grow the Radio Broadcasting segment Adjusted EBITDA by 6.6%. Same station core radio revenues, excluding political, are currently pacing down low single digits for the fourth quarter. Cable Television advertising was robust in the quarter, up 7.8%. While digital revenues decreased by 6.4%, we were able to post significant Adjusted EBITDA growth in that segment as a result of improved cost control. Overall, we were able to grow Adjusted EBITDA by 5.8% for the quarter, and I believe we are well positioned to achieve our strategic goals for the year, with Adjusted EBITDA in the range of $138-$140 million."

RESULTS OF OPERATIONS

		Three Months Ended September 30,		Nine Months Ended September 30,
		2019	2018	2019	2018
STATEMENT OF OPERATIONS		(unaudited)		(unaudited)
		(in thousands, except share data)		(in thousands, except share data)

	NET REVENUE	$ 111,055	$ 110,730	$ 331,075	$ 325,557
	OPERATING EXPENSES
	Programming and technical, excluding stock-based compensation	30,389	30,952	91,816	93,474
	Selling, general and administrative, excluding stock-based compensation	35,862	36,364	113,620	111,831
	Corporate selling, general and administrative, excluding stock-based compensation	7,863	1,846	25,666	20,963
	Stock-based compensation	1,881	1,134	2,592	3,635
	Depreciation and amortization	2,593	8,333	14,451	24,869
	Impairment of long-lived assets	-	-	3,800	6,556
	Total operating expenses	78,588	78,629	251,945	261,328
	Operating income	32,467	32,101	79,130	64,229
	INTEREST INCOME	45	33	131	194
	INTEREST EXPENSE	21,589	18,987	65,743	57,423
	GAIN ON RETIREMENT OF DEBT	-	(120)	-	(985)
	OTHER INCOME, net	(1,299)	(1,935)	(4,669)	(5,850)
	Income before provision for (benefit from) income taxes and noncontrolling interest in income of subsidiaries	12,222	15,202	18,187	13,835
	PROVISION FOR (BENEFIT FROM) INCOME TAXES	6,535	(8,173)	11,901	(10,914)
	CONSOLIDATED NET INCOME	5,687	23,375	6,286	24,749
	NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS	328	331	999	670
	CONSOLIDATED NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS	$ 5,359	$ 23,044	$ 5,287	$ 24,079

	AMOUNTS ATTRIBUTABLE TO COMMON STOCKHOLDERS
	CONSOLIDATED NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS	$ 5,359	$ 23,044	$ 5,287	$ 24,079

	Weighted average shares outstanding - basic³	44,315,077	45,128,341	44,912,673	45,946,820
	Weighted average shares outstanding - diluted⁴	46,118,702	47,462,358	46,965,245	48,376,362

	Three Months Ended September 30,		Nine Months Ended September 30,
	2019	2018	2019	2018
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 attributable to common stockholders (basic)	$ 0.12	$ 0.51	$ 0.12	$ 0.52

Consolidated net income attributable to common stockholders (diluted)	$ 0.12	$ 0.49	$ 0.11	$ 0.50

SELECTED OTHER DATA
Broadcast and digital operating income ¹	$ 44,804	$ 43,414	$ 125,639	$ 120,252
Broadcast and digital operating income margin (% of net revenue)	40.3%	39.2%	37.9%	36.9%

Broadcast and digital operating income reconciliation:

Consolidated net income attributable to common stockholders	$ 5,359	$ 23,044	$ 5,287	$ 24,079
Add back non-broadcast and digital operating income items included in consolidated net income:
Interest income	(45)	(33)	(131)	(194)
Interest expense	21,589	18,987	65,743	57,423
Provision for (benefit from) income taxes	6,535	(8,173)	11,901	(10,914)
Corporate selling, general and administrative expenses	7,863	1,846	25,666	20,963
Stock-based compensation	1,881	1,134	2,592	3,635
Gain on retirement of debt	-	(120)	-	(985)
Other income, net	(1,299)	(1,935)	(4,669)	(5,850)
Depreciation and amortization	2,593	8,333	14,451	24,869
Noncontrolling interest in income of subsidiaries	328	331	999	670
Impairment of long-lived assets	-	-	3,800	6,556
Broadcast and digital operating income	$ 44,804	$ 43,414	$ 125,639	$ 120,252

Adjusted EBITDA²	$ 40,021	$ 37,811	$ 110,113	$ 105,287

Adjusted EBITDA reconciliation:

Consolidated net income attributable to common stockholders:	$ 5,359	$ 23,044	$ 5,287	$ 24,079
Interest income	(45)	(33)	(131)	(194)
Interest expense	21,589	18,987	65,743	57,423
Provision for (benefit from) income taxes	6,535	(8,173)	11,901	(10,914)
Depreciation and amortization	2,593	8,333	14,451	24,869
EBITDA	$ 36,031	$ 42,158	$ 97,251	$ 95,263
Stock-based compensation	1,881	1,134	2,592	3,635
Gain on retirement of debt	-	(120)	-	(985)
Other income, net	(1,299)	(1,935)	(4,669)	(5,850)
Noncontrolling interest in income of subsidiaries	328	331	999	670
Employment Agreement Award, incentive plan award expenses and other compensation	860	(6,355)	3,576	(2,481)
Contingent consideration from acquisition	53	265	219	1,715
Severance-related costs	358	622	1,178	1,621
Cost method investment income from MGM National Harbor	1,809	1,711	5,167	5,143
Impairment of long-lived assets	-	-	3,800	6,556
Adjusted EBITDA	$ 40,021	$ 37,811	$ 110,113	$ 105,287

		September 30, 2019	December 31, 2018
		(unaudited)
		(in thousands)
SELECTED BALANCE SHEET DATA:
	Cash and cash equivalents and restricted cash	$ 31,903	$ 15,890
	Intangible assets, net	889,724	916,824
	Total assets	1,261,501	1,237,409
	Total debt (including current portion, net of original issue discount and issuance costs)	879,170	912,463
	Total liabilities	1,062,573	1,048,477
	Total stockholders' equity	189,681	178,700
	Redeemable noncontrolling interest	9,247	10,232

		September 30, 2019	Applicable Interest Rate
		(in thousands)
SELECTED LEVERAGE DATA:
	2017 Credit Facility, net of original issue discount and issuance costs of approximately $6.1 million (subject to variable rates) (a)	$ 315,739	6.12%
	7.375% senior secured notes due April 2022, net of original issue discount and issuance costs of approximately $2.9 million (fixed rate)	347,351	7.375%
	2018 Credit Facility, net of original issue discount and issuance costs of approximately $4.2 million (fixed rate)	166,755	12.875%
	MGM National Harbor Loan, net of original issue discount and issuance costs of approximately $2.4 million (fixed rate)	49,325	11.00%
	Asset-backed credit facility (subject to variable rates) (a)	-	0.00%

	(a) Subject to variable Libor or Prime 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 September 30,
	2019		2018		$ Change		% Change
	(Unaudited)
	(in thousands)
Net Revenue:
Radio Advertising	$	50,813	$	51,293	$	(480)	-0.9%
Political Advertising		300		917		(617)	-67.3%
Digital Advertising		8,171		8,734		(563)	-6.4%
Cable Television Advertising		20,649		19,157		1,492	7.8%
Cable Television Affiliate Fees		25,330		26,244		(914)	-3.5%
Event Revenues & Other		5,792		4,385		1,407	32.1%

Net Revenue (as reported)	$	111,055	$	110,730	$	325	0.3%

Net revenue increased to approximately $111.1 million for the quarter ended September 30, 2019, from approximately $110.7 million for the same period in 2018. Net revenues from our radio broadcasting segment increased 1.1% compared to the same period in 2018. We experienced net revenue declines most significantly in our Detroit and Indianapolis markets, with our Atlanta, Baltimore, Charlotte, Raleigh, St. Louis, and Washington DC markets experiencing the most significant growth for the quarter. As previously announced, we sold our Detroit WDMK-FM station as of August 31, 2019 and we sold our Detroit WPZR-FM station as of August 8, 2018. We recognized approximately $46.0 million of revenue from our cable television segment during the three months ended September 30, 2019, compared to approximately $45.4 million for the same period in 2018, with an increase primarily in advertising sales, which was partially offset by a decline in affiliate sales. Net revenue from our Reach Media segment increased marginally for the quarter ended September 30, 2019, compared to the same period in 2018. The Tom Joyner One More Time Experience, a multi-city tour event for 2019 added revenue for the quarter. Finally, net revenues for our digital segment decreased 6.6% for the three months ended September 30, 2019, compared to the same period in 2018, primarily due to decreases in direct revenues.

Operating expenses, excluding depreciation and amortization, stock-based compensation and impairment of long-lived assets, increased to approximately $74.1 million for the quarter ended September 30, 2019, up 7.2% from the approximately $69.2 million incurred for the comparable quarter in 2018. The overall operating expense increase was driven primarily by higher corporate selling, general and administrative expenses, which was partially offset by lower programming and technical expenses as well as lower selling, general and administrative expenses. The increase in corporate expenses was primarily due to a change in methodology used in calculating the fair value of the Company's Employment Agreement Award liability. The revised methodology resulted in a one-time reduction of approximately $6.6 million during the quarter ended September 30, 2018 to reflect this change in estimate.

Depreciation and amortization expense decreased to approximately $2.6 million for the quarter ended September 30, 2019, compared to approximately $8.3 million for the quarter ended September 30, 2018. The decrease in expense is due to the mix of assets approaching or near the end of their useful lives, most notably the Company's affiliate agreements.

Interest expense increased to approximately $21.6 million for the quarter ended September 30, 2019, compared to approximately $19.0 million for the same period in 2018. During the quarter ended September 30, 2019, the Company recorded interest expense of approximately $1.3 million on its operating leases as a result of adopting ASC 842 on January 1, 2019. The Company made cash interest payments of approximately $11.7 million on its outstanding debt for the quarter September 30, 2019, compared to cash interest payments of approximately $17.5 million on its outstanding debt for the quarter ended September 30, 2018. On December 20, 2018, the Company closed on a new $192.0 million unsecured credit facility (the "2018 Credit Facility") and a new $50.0 million loan secured by its interest in the MGM National Harbor Casino (the "MGM National Harbor Loan"). As of September 30, 2019, the Company did not have any borrowings outstanding on its ABL Facility.

The gain on retirement of debt of $120,000 for the quarter ended September 30, 2018, was due to the redemption of approximately $5.0 million of our 2020 Notes at a discount.

The increase in stock-based compensation for the three months ended September 30, 2019, compared to the same period in 2018, is primarily due to grants and vesting of stock awards for certain executive officers and other management personnel.

For the three months ended September 30, 2019, we recorded a provision for income taxes of approximately $6.5 million on pre-tax income from continuing operations of approximately $12.2 million, which results in a tax rate of 53.5%. This tax rate is based on an estimated annual effective tax rate of 35.5%, and discrete tax provision adjustments of approximately $1.9 million related to provision to return adjustments and legislative changes. For the three months ended September 30, 2018, we recorded a benefit from income taxes of approximately $8.2 million on pre-tax income from continuing operations of approximately $15.2 million, which resulted in an effective tax rate of (53.8)%. This tax rate is based on an estimated annual effective tax rate of (66.1)% and discrete tax provision adjustments of approximately $2.3 million related to state rate and legislative changes. The Company received a net tax refund of $16,000 and paid $48,000 in taxes for the quarters ended September 30, 2019 and 2018, respectively.

Other income, net, was approximately $1.3 million and $1.9 million for the quarters ended September 30, 2019 and 2018, respectively. For the three months ended September 30, 2019 and 2018, the Company recognized approximately $1.8 million and $1.7 million, respectively, of cost method investment income from its MGM investment.

The decrease in noncontrolling interests in income of subsidiaries was due primarily to lower net income recognized by Reach Media during the three months ended September 30, 2019, compared to the same period in 2018.

Other pertinent financial information includes capital expenditures of approximately $1.8 million and $1.6 million for the quarters ended September 30, 2019 and 2018, respectively.

During the three months ended September 30, 2019, the Company repurchased 6,345 shares of Class A common stock in the amount of $14,000 and repurchased 448,742 shares of Class D common stock in the amount of $975,000. During the three months ended September 30, 2018, the Company repurchased 3,928 shares of Class A common stock in the amount of $9,000 and repurchased 702,282 shares of Class D common stock in the amount of approximately $1.5 million.

The Company, in connection with its 2009 stock 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 September 30, 2019, the Company executed a Stock Vest Tax Repurchase of 13,264 shares of Class D Common Stock in the amount of $25,000. During the three months ended September 30, 2018, the Company executed a Stock Vest Tax Repurchase of 20,787 shares of Class D Common Stock in the amount of $44,000.

Supplemental Financial Information:

For comparative purposes, the following more detailed, unaudited statements of operations for the three and nine months ended September 30, 2019 and 2018 are included.

				Three Months Ended September 30, 2019
				(in thousands, unaudited)


						Radio		Reach				Cable		Corporate/
				Consolidated		Broadcasting		Media		Digital		Television		Eliminations

STATEMENT OF OPERATIONS:

	NET REVENUE		$	111,055	$	46,467	$	10,917	$	8,170	$	45,981	$	(480)
	OPERATING EXPENSES:
	Programming and technical			30,389		9,707		4,070		2,899		14,153		(440)
	Selling, general and administrative			35,862		18,960		4,411		4,549		8,048		(106)
	Corporate selling, general and administrative			7,863		-		443		1		1,476		5,943
	Stock-based compensation			1,881		262		12		11		-		1,596
	Depreciation and amortization			2,593		791		60		474		953		315
	Total operating expenses			78,588		29,720		8,996		7,934		24,630		7,308
	Operating income (loss)			32,467		16,747		1,921		236		21,351		(7,788)
	INTEREST INCOME			45		-		-		-		-		45
	INTEREST EXPENSE			21,589		1,184		75		69		2,163		18,098
	OTHER (INCOME) EXPENSE, net			(1,299)		515		-		-		-		(1,814)
		Income (loss) before provision for (benefit from) income taxes and noncontrolling interest in income of subsidiaries		12,222		15,048		1,846		167		19,188		(24,027)
	PROVISION FOR (BENEFIT FROM) INCOME TAXES			6,535		3,869		485		(13)		4,892		(2,698)
	CONSOLIDATED NET INCOME (LOSS)			5,687		11,179		1,361		180		14,296		(21,329)
	NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS			328		-		-		-		-		328
	NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS		$	5,359	$	11,179	$	1,361	$	180	$	14,296	$	(21,657)

	Adjusted EBITDA²		$	40,021	$	17,963	$	1,993	$	780	$	22,345	$	(3,060)

				Three Months Ended September 30, 2018
				(in thousands, unaudited)


						Radio		Reach				Cable		Corporate/
				Consolidated		Broadcasting		Media		Digital		Television		Eliminations

STATEMENT OF OPERATIONS:

	NET REVENUE		$	110,730	$	45,958	$	10,822	$	8,749	$	45,401	$	(200)
	OPERATING EXPENSES:
	Programming and technical			30,952		10,327		4,266		3,423		13,056		(120)
	Selling, general and administrative			36,364		18,880		3,607		5,928		8,028		(79)
	Corporate selling, general and administrative			1,846		-		855		-		1,704		(713)
	Stock-based compensation			1,134		166		12		12		7		937
	Depreciation and amortization			8,333		872		63		482		6,577		339
	Total operating expenses			78,629		30,245		8,803		9,845		29,372		364
	Operating income (loss)			32,101		15,713		2,019		(1,096)		16,029		(564)
	INTEREST INCOME			33		-		-		-		-		33
	INTEREST EXPENSE			18,987		337		-		-		1,919		16,731
	GAIN ON RETIREMENT OF DEBT			(120)		-		-		-		-		(120)
	OTHER INCOME, net			(1,935)		(204)		-		-		(2)		(1,729)
		Income (loss) before (benefit from) provision for income taxes and noncontrolling interest in income of subsidiaries		15,202		15,580		2,019		(1,096)		14,112		(15,413)
	(BENEFIT FROM) PROVISION FOR INCOME TAXES			(8,173)		3,586		458		117		3,534		(15,868)
	CONSOLIDATED NET INCOME (LOSS)			23,375		11,994		1,561		(1,213)		10,578		455
	NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS			331		-		-		-		-		331
	NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS		$	23,044	$	11,994	$	1,561	$	(1,213)	$	10,578	$	124

	Adjusted EBITDA²		$	37,811	$	16,854	$	2,107	$	(110)	$	22,935	$	(3,975)

				Nine Months Ended September 30, 2019
				(in thousands, unaudited)


						Radio		Reach				Cable		Corporate/
				Consolidated		Broadcasting		Media		Digital		Television		Eliminations

STATEMENT OF OPERATIONS:

	NET REVENUE		$	331,075	$	132,528	$	36,660	$	23,280	$	140,234	$	(1,627)
	OPERATING EXPENSES:
	Programming and technical			91,816		29,527		12,150		8,438		43,058		(1,357)
	Selling, general and administrative			113,620		56,603		16,712		13,620		26,856		(171)
	Corporate selling, general and administrative			25,666		-		1,834		2		4,617		19,213
	Stock-based compensation			2,592		450		31		39		9		2,063
	Depreciation and amortization			14,451		2,510		178		1,395		9,430		938
	Impairment of long-lived assets			3,800		3,800		-		-		-		-
	Total operating expenses			251,945		92,890		30,905		23,494		83,970		20,686
	Operating income (loss)			79,130		39,638		5,755		(214)		56,264		(22,313)
	INTEREST INCOME			131		-		-		-		-		131
	INTEREST EXPENSE			65,743		3,574		229		211		6,500		55,229
	OTHER (INCOME) EXPENSE, net			(4,669)		517		-		-		-		(5,186)
		Income (loss) before provision for (benefit from) income taxes and noncontrolling interest in income of subsidiaries		18,187		35,547		5,526		(425)		49,764		(72,225)
	PROVISION FOR (BENEFIT FROM) INCOME TAXES			11,901		9,121		1,343		(10)		12,559		(11,112)
	CONSOLIDATED NET INCOME (LOSS)			6,286		26,426		4,183		(415)		37,205		(61,113)
	NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS			999		-		-		-		-		999
	NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS		$	5,287	$	26,426	$	4,183	$	(415)	$	37,205	$	(62,112)

	Adjusted EBITDA²		$	110,113	$	46,863	$	5,982	$	1,670	$	65,869	$	(10,271)

				Nine Months Ended September 30, 2018
				(in thousands, unaudited)


						Radio		Reach				Cable		Corporate/
				Consolidated		Broadcasting		Media		Digital		Television		Eliminations

STATEMENT OF OPERATIONS:

	NET REVENUE		$	325,557	$	131,924	$	33,721	$	23,454	$	138,414	$	(1,956)
	OPERATING EXPENSES:
	Programming and technical			93,474		29,839		12,801		10,256		40,962		(384)
	Selling, general and administrative			111,831		55,272		14,462		18,485		25,201		(1,589)
	Corporate selling, general and administrative			20,963		-		2,396		5		5,900		12,662
	Stock-based compensation			3,635		477		41		84		9		3,024
	Depreciation and amortization			24,869		2,590		189		1,435		19,690		965
	Impairment of long-lived assets			6,556		6,556		-		-		-		-
	Total operating expenses			261,328		94,734		29,889		30,265		91,762		14,678
	Operating income (loss)			64,229		37,190		3,832		(6,811)		46,652		(16,634)
	INTEREST INCOME			194		-		-		-		-		194
	INTEREST EXPENSE			57,423		1,026		-		-		5,756		50,641
	GAIN ON RETIREMENT OF DEBT			(985)		-		-		-		-		(985)
	OTHER INCOME, net			(5,850)		(642)		-		-		(2)		(5,206)
		Income (loss) before (benefit from) provision for income taxes and noncontrolling interest in income of subsidiaries		13,835		36,806		3,832		(6,811)		40,898		(60,890)
	(BENEFIT FROM) PROVISION FOR INCOME TAXES			(10,914)		8,749		940		(630)		10,141		(30,114)
	CONSOLIDATED NET INCOME (LOSS)			24,749		28,057		2,892		(6,181)		30,757		(30,776)
	NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS			670		-		-		-		-		670
	NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS		$	24,079	$	28,057	$	2,892	$	(6,181)	$	30,757	$	(31,446)

	Adjusted EBITDA²		$	105,287	$	47,279	$	4,075	$	(3,242)	$	67,857	$	(10,682)

Urban One, Inc. will hold a conference call to discuss its results for the third fiscal quarter of 2019. The conference call is scheduled for Thursday, November 07, 2019 at 10:00 a.m. EST. To participate on this call, U.S. callers may dial toll-free 1-800-230-1096; international callers may dial direct (+1) 612-288-0337.

A replay of the conference call will be available from 12:00 p.m. EST November 07, 2019 until 11:59 p.m. EST November 14, 2019. Callers may access the replay by calling 1-800-475-6701; international callers may dial direct (+1) 320-365-3844. The replay Access Code is 472686.

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 one of the nation's largest radio broadcasting companies, Urban One currently owns and/or operates 58 broadcast stations (including all HD stations, translator stations and the low power television station we operate) branded under the tradename "Radio One" in 15 urban markets in the United States. Through its controlling interest in Reach Media, Inc. (blackamericaweb.com), the Company also operates syndicated programming including the Tom Joyner Morning Show, 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.

Notes:

1 "Broadcast and digital operating income" consists of net (loss) income before depreciation and amortization, corporate selling, general and administrative expenses, stock-based compensation, income taxes, noncontrolling interest in income (loss) of subsidiaries, interest expense, impairment of long-lived assets, other (income) expense, loss (gain) on retirement of debt, gain on sale-leaseback and interest income. Broadcast and digital operating income is not a measure of financial performance under generally accepted accounting principles. Nevertheless, broadcast and digital operating income is a significant measure used by our management to evaluate the operating performance of our core operating segments because broadcast and digital operating income provides helpful information about our results of operations apart from expenses associated with our fixed assets and long-lived intangible assets, income taxes, investments, debt financings and retirements, overhead, stock-based compensation, impairment charges, and asset sales. Our measure of broadcast and digital operating income is similar to industry use of station operating income; however, it reflects our more diverse business and therefore is not completely analogous to "station operating income" or other similarly titled measures used by other companies. Broadcast and digital operating income does not purport to represent operating income or cash flow from operating activities, as those terms are defined under generally accepted accounting principles, and should not be considered as an alternative to those measurements as an indicator of our performance. A reconciliation of net income (loss) to broadcast and digital operating income has been provided in this release.

2 "Adjusted EBITDA" consists of net loss plus (1) depreciation, amortization, income taxes, interest expense, noncontrolling interest in (loss) income of subsidiaries, impairment of long-lived assets, stock-based compensation, (gain) loss on retirement of debt, gain on sale-leaseback, Employment Agreement and incentive plan award expenses and other compensation, contingent consideration from acquisition, severance-related costs, cost investment income, less (2) other income and interest income. Net income before interest income, interest expense, income taxes, depreciation and amortization is commonly referred to in our business as "EBITDA." Adjusted EBITDA and EBITDA are not measures of financial performance under generally accepted accounting principles. However, we believe Adjusted EBITDA is often a useful measure of a company's operating performance and is a significant measure used by our management to evaluate the operating performance of our business because Adjusted EBITDA excludes charges for depreciation, amortization and interest expense that have resulted from our acquisitions and debt financing, our taxes, impairment charges, and gain on retirements of debt. Accordingly, we believe that Adjusted EBITDA provides useful information about the operating performance of our business, apart from the expenses associated with our fixed assets and long-lived intangible assets or capital structure. EBITDA is frequently used as one of the measures for comparing businesses in the broadcasting industry, although our measure of Adjusted EBITDA may not be comparable to similarly titled measures of other companies, including, but not limited to the fact that our definition includes the results of all four segments (radio broadcasting, Reach Media, digital and cable television). Adjusted EBITDA and EBITDA do not purport to represent operating income or cash flow from operating activities, as those terms are defined under generally accepted accounting principles, and should not be considered as alternatives to those measurements as an indicator of our performance. A reconciliation of net income (loss) to EBITDA and Adjusted EBITDA has been provided in this release.

3 For the three months ended September 30, 2019 and 2018, Urban One had 44,315,077 and 45,128,341 shares of common stock outstanding on a weighted average basis (basic), respectively. For the nine months ended September 30, 2019 and 2018, Urban One had 44,912,673 and 45,946,820 shares of common stock outstanding on a weighted average basis (basic), respectively.

4 For the three months ended September 30, 2019 and 2018, Urban One had 46,118,702 and 47,462,358 shares of common stock outstanding on a weighted average basis (fully diluted for outstanding stock awards), respectively. For the nine months ended September 30, 2019 and 2018, Urban One had 46,965,245 and 48,376,362 shares of common stock outstanding on a weighted average basis (fully diluted for outstanding stock awards), respectively.

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SOURCE Urban One, Inc.

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