URBAN ONE, INC. - 10-Q filing on 2020-05-29

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

3 Months Ended

Mar. 31, 2020

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


	Three Months Ended March 31,
	2020		2019
	(Unaudited)
	(In thousands)
Net Revenue:
Radio Advertising	$	38,417	$	42,374
Political Advertising		2,404		123
Digital Advertising		6,289		7,437
Cable Television Advertising		21,033		20,193
Cable Television Affiliate Fees		26,207		27,475
Event Revenues & Other		525		847
Net Revenue (as reported)	$	94,875	$	98,449

Schedule of contract assets (unbilled receivables) and contract liabilities (customer advances and unearned income and unearned event income)


	March 31, 2020		December 31, 2019		March 31, 2019
	(Unaudited)		(In thousands)		(Unaudited)


Contract assets:
Unbilled receivables	$	5,799	$	3,763	$	6,529

Contract liabilities:
Customer advances and unearned income	$	2,667	$	3,048	$	3,836
Unearned event income		11,194		6,645		8,201

Schedule of calculation of basic and diluted earnings per share from continuing operations

The following table sets forth the calculation of basic and diluted earnings per share from continuing operations (in thousands, except share and per share data):


	Three Months Ended March 31,
	2020		2019
	(Unaudited)
	(In thousands)

Numerator:
Net loss attributable to common stockholders	$	(23,187)	$	(3,104)
Denominator:
Denominator for basic net loss per share - weighted-average outstanding shares		45,228,164		45,001,767
Effect of dilutive securities:
Stock options and restricted stock		—		—
Denominator for diluted net loss per share - weighted-average outstanding shares		45,228,164		45,001,767

Net loss attributable to common stockholders per share – basic and diluted	$	(0.51)	$	(0.07)

All stock options and restricted stock awards were excluded from the diluted calculation for the three months ended March 31, 2020 and 2019, as their inclusion would have been anti-dilutive. The following table summarizes the potential common shares excluded from the diluted calculation.


	Three Months Ended March 31,
	2020	2019
	(Unaudited)
	(In thousands)

Stock options	4,173	3,549
Restricted stock awards	379	1,256

Schedule of fair values of our financial assets and liabilities measured at fair value on a recurring basis


	Total		Level 1		Level 2		Level 3
	(Unaudited)
	(In thousands)
As of March 31, 2020
Liabilities subject to fair value measurement:
Contingent consideration (a)	$	1,500		—		—	$	1,500
Employment agreement award (b)		27,598		—		—		27,598
Total	$	29,098	$	—	$	—	$	29,098

Mezzanine equity subject to fair value measurement:
Redeemable noncontrolling interests (c)	$	10,292	$	—	$	—	$	10,292

As of December 31, 2019
Liabilities subject to fair value measurement:
Contingent consideration (a)	$	1,921		—		—	$	1,921
Employment agreement award (b)		27,017		—		—		27,017
Total	$	28,938	$	—	$	—	$	28,938

Mezzanine equity subject to fair value measurement:
Redeemable noncontrolling interests (c)	$	10,564	$	—	$	—	$	10,564

Schedule of changes in Level 3 liabilities measured at fair value on a recurring basis


			Employment		Redeemable
	Contingent		Agreement		Noncontrolling
	Consideration		Award		Interests
	(In thousands)

Balance at December 31, 2019	$	1,921	$	27,017	$	10,564
Net income attributable to noncontrolling interests		—		—		129
Distribution		(349)		(632)		—
Dividends paid to noncontrolling interests		—		—		(1,000)
Change in fair value		(72)		1,213		599
Balance at March 31, 2020	$	1,500	$	27,598	$	10,292

The amount of total (losses)/income for the period included in earnings attributable to the change in unrealized losses/income relating to assets and liabilities still held at the reporting date	$	72	$	(1,213)	$	—

Schedule of significant unobservable input value


					As of
			As of		December 31,
		Significant	March 31, 2020		2019
		Unobservable	Significant Unobservable
Level 3 liabilities	Valuation Technique	Inputs	Input Value

Contingent consideration	Monte Carlo Simulation	Expected volatility	20.8	%	20.8	%
Contingent consideration	Monte Carlo Simulation	Discount Rate	14.5	%	14.5	%
Employment agreement award	Discounted Cash Flow	Discount Rate	10.0	%	10.0	%
Employment agreement award	Discounted Cash Flow	Long-term Growth Rate	2.0	%	2.0	%
Redeemable noncontrolling interest	Discounted Cash Flow	Discount Rate	11.0	%	11.0	%
Redeemable noncontrolling interest	Discounted Cash Flow	Long-term Growth Rate	1.0	%	1.0	%

Schedule of the components of lease expense and the weighted average remaining lease term and the weighted average discount rate

The following table sets forth the components of lease expense and the weighted average remaining lease term and the weighted average discount rate for the Company’s leases:


		Three Months Ended March 31,
		2020		2019
		(Unaudited)
		(Dollar In thousands)


Operating Lease Cost (Cost resulting from lease payments)	$	3,151	$	3,057
Variable Lease Cost (Cost excluded from lease payments)		40		103
Total Lease Cost	$	3,191	$	3,160

Operating Lease - Operating Cash Flows (Fixed Payments)	$	3,406	$	3,268
Operating Lease - Operating Cash Flows (Liability Reduction)	$	2,134	$	1,897

Weighted Average Lease Term - Operating Leases		5.59	years	6.28	years
Weighted Average Discount Rate - Operating Leases		11.00	%	11.00	%

Schedule of maturities of lease liabilities


For the Year Ended December 31,	(Dollars in thousands)
For the remaining nine months ending December 31, 2020	$	9,867
2021		12,664
2022		12,019
2023		10,391
2024		9,326
Thereafter		11,502
Total future lease payments		65,769
Imputed interest		(16,753)
Total	$	49,016