- Year-End 2023 Adjusted EBITDA: $128.4 million.
- 2024 EBITDA Guidance: $110 million to $120 million.
- Q4 2023 Consolidated Net Revenue: $120.3 million, down 9.2% year over year.
- Q4 2023 Radio Segment Net Revenue: $41.7 million, down 12.4% year over year.
- Q4 2023 Retail Segment Net Revenue: $10.8 million, down 9.7% year over year.
- Q4 2023 Digital Segment Net Revenue: $21.2 million, down 12.5% year over year.
- Q4 2023 Cable Television Segment Revenue: $47.3 million, down 4.9% year over year.
- Q1 2024 Consolidated Net Revenue: $104.4 million, down 5% year over year.
- Q1 2024 Radio Segment Net Revenue: $36.4 million, up 3.3% year over year.
- Q1 2024 Retail Segment Net Revenue: $8.5 million, down 22.4% year over year.
- Q1 2024 Digital Segment Net Revenue: $14 million, down 7.3% year over year.
- Q1 2024 Cable Television Segment Revenue: $46.2 million, down 6.9% year over year.
- Q4 2023 Operating Expenses: $105.6 million, up 1.6% year over year.
- Q1 2024 Operating Expenses: $88.3 million, up 11.6% year over year.
- Q4 2023 Adjusted EBITDA: $26.4 million, down 30.5% year over year.
- Q1 2024 Adjusted EBITDA: $21.5 million, down 28.9% year over year.
- Q4 2023 Net Loss: $11 million or $0.23 per share.
- Q1 2024 Net Income: $7.5 million or $0.15 per share.
- Q4 2023 Total Gross Debt: $725 million.
- Q1 2024 Total Gross Debt: $650 million.
- Q4 2023 Ending Unrestricted Cash: $233.1 million.
- Q1 2024 Ending Unrestricted Cash: $155.3 million.
Release Date: June 10, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Urban One Inc (UONE, Financial) is back in compliance with Nasdaq after completing the year-end 2023 and first quarter 2024 audits.
- The company provided 2024 EBITDA guidance of $110 million to $120 million, indicating a positive outlook.
- Adjusted EBITDA for the digital segment increased by 82% in Q4, showing strong performance in that area.
- Interest expense decreased year-over-year due to lower overall debt balances, improving financial health.
- Urban One Inc (UONE) repurchased $75 million of its 2028 notes at an average price of 88.3%, reducing future interest obligations.
Negative Points
- Consolidated net revenue was down by 9.2% year-over-year for Q4 2023 and by 5% year-over-year for Q1 2024.
- Net revenue for the radio segment decreased by 12.4% year-over-year in Q4 and by 7.9% on a same-station basis in Q1.
- Political advertising revenue in the radio division declined by 76% year-over-year in Q4, significantly impacting overall revenue.
- Operating expenses increased by 11.6% in Q1 2024 compared to the same period in 2023, driven by higher third-party professional fees.
- Net loss for Q4 2023 was approximately $11 million, or $0.23 per share, compared to a net loss of $1.9 million, or $0.04 per share, in Q4 2022.
Q & A Highlights
Q: As I think about the fixed charges out for 2024, specifically CapEx and taxes, your cash interest is about $48 million per year now after the paydown. How much do you expect to spend this year on CapEx and taxes?
A: CapEx is penciled out at around $9 million this year, including a couple of big real estate projects. Cash taxes are expected to be about $3 million this year. So, $9 million on CapEx and $3 million on taxes.
Q: Can you describe a little color on what you're seeing in national ad sales and whether you expect that trend to persist? Also, can you provide some forecast on political ad revenue for 2024?
A: We budgeted $10 million for political this year, which is conservative compared to previous cycles. We are seeing a shift towards digital in political ad spending. National ad sales have been soft, but we expect this to normalize over time. In Q2, national ad sales are performing better relative to local.
Q: Are you able to provide any read-through on how Q2 is coming along?
A: Q2 is soft overall, with continued churn in cable TV and softness in digital. However, political ad revenue is performing well. We expect Q2 to be a challenging quarter, but this is factored into our guidance.
Q: Can you talk more about what's been driving the softness in digital and reach segments, and what you're focusing on to improve performance?
A: The softness is due to a combination of factors: a national ad recession, a tail-off in diversity dollars, and a shift from traditional to digital distribution systems. We are still working through these challenges and have not yet fully developed a strategy to turn this around.
Q: Can you provide more details on the elevated SG&A expenses and whether there are plans to reduce them?
A: The elevated SG&A expenses are primarily due to one-time audit and consultancy fees. We had a prolonged and expensive audit, which added about $5 million in Q1. This is not expected to be a recurring expense.
Q: What is the current cash balance, and do you have any thoughts on potential acquisitions like Bounce TV?
A: As of today, our cash balance is $162.9 million. We have signed an NDA and will participate in the process for Bounce TV. We are always looking at opportunities that make sense and can provide synergies, but everything is relative to price.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
