Urban One (NASDAQ:UONE) held its first-quarter earnings conference call on Thursday. Below is the complete transcript from the call.

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Summary

Urban One reported a tough first quarter with consolidated net revenue of $77.7 million, down 15.8% year over year.

The company focused on balance sheet management, reducing debt by $60 million, resulting in a current long-term debt balance of $326.7 million.

Urban One announced an acquisition of Service Broadcasting in Dallas, Texas for $22 million, offset by dispositions in Dallas and Charlotte, with a net investment of $11 million.

The company updated its guidance for 2026 to approximately $60 million of EBITDA and expects year-end leverage to be below five times.

Operational highlights include a decrease in operating expenses, with significant reductions in sales and marketing expenses across segments, and a focus on expanding local digital sales.

Management expressed confidence in generating about $40 million of free cash flow for the year and emphasized ongoing efforts to deleverage and improve profitability.

Full Transcript

OPERATOR

Ladies and Gentlemen, thank you for standing by and welcome to the Urban One 2026 first quarter earnings call. As a reminder, this conference is being recorded. We will begin this call with the following Safe Harbor Statement during this conference call, Urban One will be sharing with you certain projections or other forward looking statements regarding future events or its future performance. Urban One cautions you that certain factors, including risks and uncertainties referred to in the 10Ks, 10Qs and other reports it periodically files with the securities and Exchange Commission could cause the Company's actual results to differ materially from those indicated by its projections or forward looking statements. This call will present information as of May 14, 2026. Please note that Urban One disclaims any duty to update any forward looking statements made in the presentation. In this call, Urban Urban One also discuss some non GAAP financial measures in talking about its performance. These measures will be reconciled to GAAP either during the course of this call or in the Company's press release which can be found on its website at www.urbanone.com. a replay of the conference call will be available from 2:00pm Eastern Daylight Time May 14, 2026 until 11:59pm EDT May 21, 2026. Callers may access the replay by calling 1-800-770-2030. International callers may dial direct 1609. The replay access code is 343-8559. Access to live audio and a replay of the conference will also be available on Urban One's corporate website at www.urbanone.com. the replay will be made available on the website for seven days after the call. No other recordings or copies of this call are authorized or may be relied upon. I will now turn the call over to Alfred C. Liggins, Chief executive officer of Urban One, who is joined by Peter Thompson, chief financial officer. Mr. Liggins, please go ahead.

Alfred C. Liggins (Chief Executive Officer)

Thank you very much operator and welcome to our first quarter results conference call. Also joining Peter and I are Joe Detour, the Chief Financial Officer at TV One and Chris Simpson who is our General Counsel. Press release came out this morning. I think that we had warned inferred other people have also reported already but first quarter was very tough quarter. We were budgeted to be down but things the marketplace was softer than anticipated due to continued declines in the traditional ad marketplace. Peter, I'll give you more specifics and details on the numbers in a moment, but with the slow start to the year we've been focused on balance sheet management and debt reduction and deleveraging opportunities since the beginning of the year we spent approximately $25 million to reduce our debt balance by another $60 million or so, approximately just to over $300 million of of gross debt. We've also announced some delevering and accretive M&A with the acquisition of Service Broadcasting in Dallas, Dallas, Texas. Two radio stations there in the marketplace for an in market consolidation opportunity. For an announced purchase price of just about $22 million but net of dispositions of one station in Dallas and two stations in Charlotte we will spend approximately by the way those dispositions don't contribute any cash flow. Currently we'll invest approximately $11 million and pick up about $5 million in pro forma EBITDA. And with that we are also giving out a new As I said in the last conference call, we're going to wait until after we got through first quarter to look at what that we wanted to do about updating guidance for 2026. So with that we're actually updating the 2026 guide to approximately $60 million of EBITDA and we expect year end leverage to be below five times by year end with these acquisitions and DISH positions. Another bright spot on this is with these numbers we'll generate about $40 million of free cash flow this year. Peter is going to have more details on that in his comments. So I'm going to let Peter go into the details and then we can open it up for Q and A and answer any more detailed questions about the business.

Peter Thompson (Chief Financial Officer)

Thank you Alfred. So consolidated net revenue for the quarter was approximately $77.7 million, down by 50 15.8% year over year. Net revenue for the radio broadcasting segment was $30.5 million, which was a decrease of 6.4% year over year excluding political revenue. Then net revenue for radio was down 8.7% year over year and according to Miller Kaplan, our local ad sales were down 5.5% against the market that was down 7.1%. National ad sales were down 8.2% against a market that was down 6.7%. Our largest ad category was services which was up 14.5% primarily due to legal services and the government and public category was up 23.6% due to political spending, but all of the other major categories were down. Net revenue for the Reach media segment was $4.9 million, down 17% from the prior year. Adjusted EBITDA was a loss of half a million for the quarter. This decrease was primarily driven by a decrease in the network marketplace revenue and key client attrition Net revenues for the digital Segment were down 33.5% in first quarter at $6.8 million. Decrease was driven by the decrease in national direct revenue streams as a result of a reduction of Diversity, Equity, and Inclusion (DEI) focused spending, ad budgets being pushed to second quarter and second half, and a general pullback in advertiser spending due to macroeconomic concerns. Local digital revenue was up 10.9% for the quarter. As we continue to focus on expanding and improving our local digital sales, we recognized approximately $36 million of revenue from our cable television segment during the quarter decrease of 18.5. Cable television advertising revenue was down 24.9%. Prime time delivery declined 24% year over year for persons 25-54 the integration of Nielsen DASH data gave a boost to linear inventory and this along with a weak scatter market led to more commercial units being allocated to Direct Response which has a lower average unit rate. Cable television affiliate revenue was down by 9.8% driven by a decrease in subscribers as linear cable continues to decline when that was partially offset by an increase in subscriber rates. Cable subscribers for TV One as measured by Nielsen finished the first quarter at 29.1 million compared to 30.2 million at the end of the day. Q4 decline is a result of the combination of churn and a conversion of virtual multichannel video programming distributors (MVPDs) that has been sold as connected television and therefore pulled out of the Nielsen numbers. Cleo TV had 28.6 million Nielsen subscribers. Operating expenses excluding depreciation and amortization, stock based compensation and impairment of goodwill and intangible assets approximately $73.5 million compared to approximately $80.7 million for the comparable period in 2025. Decrease was mainly driven by sales and marketing expense decreases in the operating segments. Radio expenses were down 3.8% or $1.1 million, driven primarily by lower costs associated with revenue, lower facility and rental costs, lower national rep fees and lower bank charges. Reach operating expenses were down by 16.2% or 1.1 million primarily due to lower bad debt reserve, lower bank charges and lower revenue related expenses. Operating expenses in the digital Segment were down 19.7% driven by decrease in traffic, acquisition costs, commissions, headcount related savings and third party ad serving costs. Operating expenses in cable television segment were down 9.8% driven by lower marketing expense, lower programming content, amortization and research costs. Operating expenses at corporate were down approximately 6.1% driven by lower professional service fees and payroll related costs. Consolidated Adjusted EBITDA was $4.7 million for the first quarter down 63.8%. Consolidated broadcast and digital operating income was approximately 14.9 million, a decrease of 35.4%. Interest expense was down to approximately $4.4 million, down from $10.9 million last year. Company made cash interest payments of approximately $700,000 in the quarter on the outstanding 2028 notes. Semi annual cash interest payments for the 2030 and 2031 notes made on April 1 for 102 days of accrued interest from the transaction day of December 18, 2025 and the next payment on those notes is now due October 1st for the full 180 days of accrued interest. During the first quarter the company repurchased $43 million of its sorry $4.3 million of its 2028 notes at an average price of 51% of par for a $2.1 million gain and approximately $32.4 million of its 2031 second lien notes at a weighted average price of approximately 40.7% of par. The discounted debt repurchases in the first quarter reduced the outstanding long term debt balance to $326.7 million as of March 31, 2026. The company repurchased an additional $23.5 million of its 2031 notes in Q2 at 42% of par. And so as Alfred said year to date as total reduction in long term debt of $60.2 million which will give us an annual interest saving of $4.6 million under the Troubled debt restructuring accounting. The long term debt on the balance sheet includes a premium which amortizes over the remaining term and on the asset-based lending (ABL) we drew $10 million in fourth quarter and repaid that in the first quarter and now on March 31st we drew another $10 million with a six month maturity which was outstanding as of March 31st, 2026. We drew a further $10 million in the second quarter of 2026 to help us do the long term debt repurchase. And so we have a current outstanding balance today of $20 million on the asset-based lending (ABL) and we have incremental borrowing capacity of approximately $22 million today. No impairment losses were recognized for the three months ended March 31, 2026. We recorded amortization expense of approximately $6.2 million including $5.6 million for the radio broadcast license and TV. One trade name for the three months ended March 31st, 2026. Benefit from income taxes was approximately $1.4 million for the first quarter the company paid cash income taxes net of refunds in the amount of approximately $0.1 million. Capital expenditures were approximately $3.4 million in the quarter, which included the Indianapolis studio refurbishment, which is why that's higher than you would normally expect to see, so that will normalize over time. Net loss was approximately $3.1 million, or $0.69 a share, compared at $11.7 million or $2.64 per share for the first quarter of 2025. During the three months, the company did not repurchase any shares of Class A common stock and we executed stock vest tax repurchases of 2,187 shares Class D common stock at a price of $5.73 per share. As we previously announced in March, the Company agreed to sell its WMXG and also WLNK radio broadcast licenses in Charlotte, North Carolina to unrelated third parties for approximately 0.7 million and $4.2 million respectively. We anticipate to close on the sale by the end of Q2. In April, company entered into an agreement to acquire Service Broadcasting group in Dallas, Texas, including radio stations KKDA and KRMB for $22 million. At the same time, we also entered into an agreement to sell radio station KZMJ to Fusion Dallas for $6 million. Pending FCC approval, the Dallas transactions are expected to close in Q3, so the net of all of that Radio M and a is roughly $11 million of outflow. And on a pro forma basis, we think the incremental cash flows from that will be around about $5 million as of March 31, 2026. The current contractually outstanding debt balance was approximately $336 million and the ending unrestricted cash balance of $27.2 million, resulting in net debt of approximately $309.5 million compared to $48.5 million of LTM reported Adjusted EBITDA for total net leverage ratio of 6.39 times. Cash flow from operations is expected to be around $40 million for the year and we do anticipate repaying the $20 million asset-based lending (ABL) balance in the second half of the the year and based on the guidance that we gave, we anticipate net leverage being below five times at year end. With that, I'll hand it back. Thanks Peter. Operator, could you please open up the lines for questions?

OPERATOR

We will now begin the question and answer session. To ask a question, press Star, then the number one on your telephone keypad. Again, for questions simply press Star followed by the number one on your telephone keypad Our first question will come from the line of Ben Briggs with Stonex Financial. Please go ahead.

Ben Briggs

Hey, good morning, guys, and thank you for taking the call and taking the questions. So I wanted to touch on one thing here. So first of all, congratulations on the acquisitions that you made this quarter. I know kind of moving some chips around the board is an important strategy for you guys. Can you give us some clarity on the thought process behind these? Is it more attractive formats that you think are going to make the difference or is it better geographies or combination of both? Any clarity there would be great.

Alfred C. Liggins (Chief Executive Officer)

They aren't different formats, they're similar formats in the marketplace. So we're really looking to expand our reach and our service of the African American community in Dallas, Texas. So I think it's going to help us all the way around in terms of serving local advertisers. The economics of putting those clusters together and also selling off our one station are going to create a much larger cluster that has more revenue scale. And with those economies of scale, you're producing significantly more ebitda. So it makes a lot of sense. It's an acquisition that we than I've been trying to do for almost 30 years. You know, I think we, you know, actually, so we went public in May of 99. That's when we bought our first established station and, you know, been trying to make a deal with the owner, operator, you know, there, Mr. Hyman Childs, who's a wonderful broadcaster and has been, you know, in this business for, you know, a long time. And, you know, we were, you know, we, we always stayed in touch and we finally were able to do something. What really helps it is again, the disposition of the one station that we have that I think does maybe a couple million dollars of revenue, but really no cash flow contribution. Those two stations in Charlotte that we're selling, we'll probably do just about a million dollars of revenue this year and also contribute no cash flow. The two stations in Charlotte became saleable because we moved our news talk format off of WBTAM and we put it on W, what was wlnkfm, which is a full market signal there because these spoken word formats have to move to the FM band. So we finally did that and then we moved the adult contemporary format to these stations, which one's a Class A in Charlotte, the other One is a C3, that's just south of Charlotte. And so we're really positioning that Charlotte cluster for the future. But there was no cash flow associated with. Also actually frees up the land associated with the tower sites for WBT AM&Also for our old WFNZ am, which we also moved to the FM band. So something I didn't talk about is that we've got significant value in those land assets in Charlotte and there is a process going on as we speak to monetize those parcels. So all in the vein of how do we look for accretive and delevering M and A. So you got to get at the right price. It's got to be an operational fit such that one plus one equals three in terms of profit, in terms of profitability. And so we think what we did in Dallas and what we're doing in Charlotte is going to be significant plays in our effort to continue to delever. Okay, that's great color and I appreciate the information about the land that some AM towers are on that that frees up. Can you give any more clarity on the monetization process? Is it going to be. Are you going to lease, you're going to sell? Are you not sure yet? Yes, we're. The land is listed with JLL right now and there's a process going on to bring in offers and to evaluate and to eventually just sell it. Yeah. Okay, great. That's a very helpful caller. I appreciate it.

Ben Briggs

Thank you guys.

OPERATOR

Thank you again. For questions, press star one and our next question will come from the line of Dennis Pannullo with Lapan Partners. Please go ahead.

Dennis Pannullo

Hi, good morning, guys. Thanks for taking my questions. Hey, Dennis. Hey. I know the first quarter, you know, seasonality is the weakest quarter of the year, but man, to see TV down double digits. And did I hear Mr. Thompson write, did you say digital? Your digital broadcasting was up.

Peter Thompson (Chief Financial Officer)

Q2, Q2, yes. I'm sorry, no. So super soft Q1, but a bunch of campaigns got pushed into Q2 and the back half. So Q2 and digital is actually up.

Alfred C. Liggins (Chief Executive Officer)

So. Yeah, because digital is actually. Yeah, sorry. Of all of the divisions, I think that the digital folks are optimistic and confident about making their numbers for the year. Right. So a weak Q2, but. A weak Q1. But a stronger Q2.

Dennis Pannullo

Yeah. Because a lot of your peers are transitioning to digital and digital sales have been pretty strong. So I'm sure that we're probably trying to head in that same direction. I would imagine margins are better. You know, sales numbers are better. Division.

Alfred C. Liggins (Chief Executive Officer)

Yes. The margin. Well, the division, you know, has grown. I mean, we created Interactive One and for a long time it was a break even division. And then I think revenue went from like low 30s to 75 after sort of the George Floyd DEI and it was wildly profitable. When I say wild, they went up to call it 20 million bucks. Now there's pressure on digital publishers, of which they are, you can see Buzzfeed, headaches, challenge, et cetera. But even with all of that, advertisers are moving more towards digital. So it will still be not a $20 million profitable division, but probably six. But a misnomer that you just mention is that the margins aren't better in digital. The margins are actually worse, particularly on local digital, because a lot of the campaigns that you sell require you to A, do specialized individual custom content and B, oftentimes you need impressions that are not not owned and operated impressions to build scale. And those impressions are very expensive to buy. And so you have tac, which is traffic acquisition cost. And the radio business, local radio

Peter Thompson (Chief Financial Officer)

has been moving in that direction, but it is a lower margin business. But as our local radio stations have been behind the curve in local digital and we're pushing and improving in that area because I tell my guys and ladies that low margin is better than no margin. Right. And Dennis, on the local, to Alfred's point, on local digital revenue, I mentioned in my prepared remarks, which we were up 10.9% for the quarter, the marketplace was up 20%. So local digital is where the growth is in radio and we're sort of trailing that curve, but we're working hard to catch up. More scale in our markets will help us be a better local digital marketing partner for our advertisers. So we're focused on that.

Dennis Pannullo

And let me just take a quick second to thank you in management for working so hard. I mean, my God, that refurbished financing you guys did in December was awesome. You didn't any of the company, there was no dilution to shareholders and unfortunately the market didn't reward you in any way, shape or form for that. And now with this additional debt repurchase and another 1.1 million in interest savings plus the premium savings, it's looking like, if I'm not mistaken, your quarterly interest cost on your P and L is going to be under $3 million. Does that sound about right, Mr. Thompson?

Peter Thompson (Chief Financial Officer)

Yeah, that's the weirdness of having to amortize the premium and it reduces the effective interest rate. I think the way to think about the interest burden going forward is the cash interest expense. Yes. So 24.8 is the pro forma cash interest expense moving forward, which is obviously way down on where we've been historically and to your point, helps us Generate more free cash flow.

Alfred C. Liggins (Chief Executive Officer)

Right? Yeah, look, we're in tougher businesses, and so it really, it's going to be a threading of the needle of how do you manage the balance sheet, get your interest burden down, get your debt down, find the places where you can create more cash flow. And look, you got to deal with the reality is that at least the assumptions that we make, like when we did this Dallas acquisition, our model has the Dallas market going down in spot revenue and digital going up with lower margins, but net, net the market coming down. Right. And I don't have a crystal ball as to what happens to the media ecosystem in terms of technology and who's competing and what it means, you know, and I don't think anybody does, but, you know, you just got to manage that debt down and stay ahead of it. And so that's, you know, that's what we've been doing. That's what we plan to. I mean, it's actually the fact that In February of 21, we had $825 million of debt. Five years later, we've got $303 million of debt. Now we have less cash flow, too. But, you know, but that's, you know, that's.

Dennis Pannullo

Well, even looking at January of 2024, you had 725 million. So in just a few years, you guys took off over $400 million in debt without diluting shareholders a single share.

Alfred C. Liggins (Chief Executive Officer)

Yeah, I mean, look, yeah, that's all fine and good, and I appreciate that, but the stock trades basically as an option level because what's the value? Right. Like, if you value stuff, we're like, hey, we're going to be below five times. Somebody could argue that your assets, cable and radio, are worth five times. So there's no equity value. Right. It could certainly benchmarks, whether it's AMC Networks or whether it's Versant or like, you know, have seen multiples, you know, you know, below five times. Right. You know, so, but we soldier on. That's the reason you got to get your debt down to three times. Right. You know, and that's, you know, what we're, you know, what we're focusing on?

Dennis Pannullo

Well, even your free cash flow that you just mentioned, you're going to do $40 million. Your current market cap is 26 million this morning. I mean, how many companies are trading under 1 times free cash flow? I don't know any. I mean, I don't know what your peers typically trade at, but when I took a look, they typically traded five to eight times free cash flow, you guys are less than 1.

Alfred C. Liggins (Chief Executive Officer)

Look, I think the market's got to get comfortable that, you know, our company, these companies are gonna make it through the curve. Right. Like, you know, because a number of folks have not made it. You know, Cumulus is in, you know, BK again. Spanish broadcasting just went to bk, you know, and so, you know, they got to believe that you're going to make it and then they'll buy your argument.

Dennis Pannullo

Well, and you don't have any liquidity issues either. And near term debt issues. You just pushed them out till 2030 and 2031 and you're eradicated and you're eliminating that debt at a rapid pace. So how do you not get re rated and have your stock trading at literally bankruptcy prices? S and P are on the call. I'm sure they make exactly. I hope you're making notes. Thank you guys. Thank you for taking my questions. I appreciate your time and your hard work and I hope you guys get rewarded share price wise very soon.

Alfred C. Liggins (Chief Executive Officer)

Yeah. Thank you, Dennis.

OPERATOR

And once again, for questions, please press star1 on your telephone keypad. This concludes our question and answer session. I'll hand the call back to Alfred for any closing comments.

Alfred C. Liggins (Chief Executive Officer)

Operator, thank you very much. And also thank you everybody for your support. And again, I always say this, it sounds like a broken record, but Peter and I pride ourselves on being accessible. And so if there are any follow up questions, please feel free to reach out to us. Thank you very much.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.