Beasley Broadcast Group, Inc. (Nasdaq: BBGI) (“Beasley” or the
“Company”), a multi-platform media company, today announced
operating results for the three-month period ended June 30, 2023.
For further information, the Company has posted a presentation to
its website regarding the second quarter highlights and
accomplishments which management will review on today’s conference
call.
Summary of Second Quarter and
Year-to-Date Results
In millions, except per share data |
Three Months EndedJune 30, |
Six Months EndedJune 30, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Net revenue |
$63.5 |
|
$64.8 |
|
$121.2 |
|
$120.5 |
|
Operating loss 1 |
|
(4.5 |
) |
|
(4.5 |
) |
|
(4.1 |
) |
|
(7.3 |
) |
Net loss 1 |
|
(10.4 |
) |
|
(14.5 |
) |
|
(14.0 |
) |
|
(18.0 |
) |
Net loss per diluted share 1 |
($0.35 |
) |
($0.49 |
) |
($0.47 |
) |
($0.61 |
) |
Adjusted EBITDA (non-GAAP) |
|
7.7 |
|
|
6.6 |
|
|
10.4 |
|
|
8.1 |
|
1 Operating
loss, net loss and net loss per diluted share for the three and six
months ended June 30, 2023 include $10.0 million of non-cash
impairment losses. Operating loss, net loss and net loss per
diluted share in the three and six months ended June 30, 2022
reflect $8.6 million and $10.5 million, respectively of non-cash
impairment losses.
Net revenue during the three months ended June
30, 2023 decreased 2.1% to $63.5 million, primarily reflecting a
year-over-year decline in audio revenue largely due to a decrease
in agency revenue, which offset an increase in digital revenue.
Despite a 4.3% year-over-year decline in
operating expenses and flat corporate expenses compared to the
second quarter of 2022, Beasley reported a 2023 second quarter
operating loss of $4.5 million in the second quarter of 2023
compared to an operating loss of $4.5 million in the second quarter
of 2022. The second quarter of 2023 operating loss largely reflects
the impact of $10.0 million of non-cash impairment losses compared
to $8.6 million of non-cash impairment losses in the second quarter
of 2022.
Beasley reported a net loss of $10.4 million, or
$0.35 per diluted share, in the three months ended June 30, 2023,
compared to a net loss of $14.5 million, or $0.49 per diluted
share, in the three months ended June 30, 2022. The net loss in
both period primarily reflects the aforementioned impairment
charges and other items discussed above.
Adjusted EBITDA (a non-GAAP financial measure)
increased 16.8% to $7.7 million in the second quarter of 2023
compared to Adjusted EBITDA of $6.6 million in the second quarter
of 2022. The increase is primarily attributable to lower operating
expenses as a percentage of net revenue compared to the prior-year
period.
Please refer to the “Calculation of Adjusted
EBITDA” and “Reconciliation of Net Loss to Adjusted EBITDA” tables
at the end of this release.
Commenting on the financial results, Caroline
Beasley, Chief Executive Officer, said, “Despite ongoing challenges
related to the economy and softness in the national spot market,
Beasley’s successful digital transformation, continued local audio
leadership and revenue diversification initiatives, combined with
our proactive initiatives to reduce expenses, resulted in net loss
declining by more than $4.0 million in both the quarter and
year-to-date periods, compared to the same periods in 2022, as well
as quarterly adjusted EBITDA growth of 16.8% and 2023 year-to-date
Adjusted EBITDA growth of 28.1%.
“During the quarter, we made additional progress
with reducing leverage and strengthening our balance sheet as we
repurchased another $3 million of our debt at a discount and
lowered quarterly interest expense which support our goal to drive
cash flow growth. We are generating cash from operations, and we
expect to continue to generate positive cash flow for the full
year.
“Our digital strategy delivered second quarter
digital revenue growth of 14.8% year-over-year, and accounted for
19.4% of total second quarter revenue. Our digital revenue is
primarily derived from our owned and operated assets, with our
proprietary content creation driving the largest increase with the
best margins and third-party products that come with a higher cost.
Our talented sales teams have been able to combine our over-the-air
and digital platform offerings to create marketing campaigns and
brand solutions that provide great results for our clients. Our
continued strong digital revenue growth has moved us to within a
few basis points of reaching the bottom end of our goal of digital
revenue accounting for 20% to 30% of total revenue and we remain
laser focused on this initiative as a means to diversify and
complement revenue in a cash flow positive manner.
“Total outstanding debt as of June 30, 2023 was
$287.0 million, and second quarter interest expense declined
slightly to $6.7 million. Beasley had $35.5 million of cash and
cash equivalents on hand at quarter end. Our current cash balance
provides us the flexibility to continue to opportunistically reduce
our debt, leverage, and interest expense. We are hyper focused on
this, as it both increases cash flow and de-risks our equity.
“In summary, the experience of our team and
strong competitive positions in our markets combined with the
meaningful actions we have taken to reduce costs and improve
operating efficiencies were again evident in the strength of our
second quarter results. Looking ahead, we are closely monitoring
local and national economies and believe that our current operating
structure will result in positive cash flow for the balance of the
year and for the full year 2023.”
Conference Call and Webcast Information
The Company will host a conference call and
webcast today, August 3, 2023, at 11:00 a.m. ET to discuss its
financial results and operations. To access the conference call,
interested parties may dial 877-407-4018 or 201-689-8471,
conference ID 13739796 (domestic and international callers).
Participants can also listen to a live webcast of the call at the
Company’s website at www.bbgi.com. Please allow 15 minutes to
register and download and install any necessary software. Following
its completion, a replay of the webcast can be accessed for five
days on the Company’s website, www.bbgi.com.
Questions from analysts, institutional investors
and debt holders may be e-mailed to ir@bbgi.com at any time up
until 9:00 a.m. ET on Thursday, August 3, 2023. Management will
answer as many questions as possible during the conference call and
webcast (provided the questions are not addressed in their prepared
remarks).
About Beasley Broadcast
GroupBeasley Broadcast Group, Inc. (www.bbgi.com) was
founded in 1961 and owns 61 AM and FM stations in 14 large- and
mid-size markets in the United States. Beasley reaches
approximately 29 million unique consumers weekly over-the-air,
online and on smartphones and tablets, and millions regularly
engage with the Company’s brands and personalities through digital
platforms such as Facebook, Twitter, text, apps and email. For more
information, please visit www.bbgi.com.
For further information, or to receive future
Beasley Broadcast Group news announcements via e-mail, please
contact Beasley Broadcast Group, at 239-263-5000 or email@bbgi.com,
or Joseph Jaffoni, JCIR, at 212-835-8500 or bbgi@jcir.com.
CONTACT: |
|
B. Caroline Beasley |
Joseph Jaffoni, James Leahy |
Chief Executive Officer |
JCIR |
Beasley Broadcast Group, Inc. |
212/835-8500 or bbgi@jcir.com |
239/263-5000 or ir@bbgi.com |
|
DefinitionsEBITDA is defined as
net income (loss) before interest income or expense, income tax
expense or benefit, depreciation, and amortization.
Adjusted EBITDA is defined as EBITDA further
adjusted to exclude certain, non-operating or other items that we
believe are not indicative of the performance of our ongoing
operations, such as impairment losses, other income or expense, or
equity in earnings of unconsolidated affiliates. See
“Reconciliation of Net Loss to Adjusted EBITDA”
for additional information.
Adjusted EBITDA can also be calculated as net
revenue less operating and corporate expenses. We define operating
expenses as cost of services and selling, general and
administrative expenses. Corporate expenses include general and
administrative expenses and certain other income and expense items
not allocated to the operating segments.
Adjusted EBITDA is a measure widely used in the
media industry. The Company recognizes that because Adjusted EBITDA
is not calculated in accordance with GAAP, it is not necessarily
comparable to similarly titled measures employed by other
companies. However, management believes that Adjusted EBITDA
provides meaningful information to investors because it is an
important measure of how effectively we operate our business and
assists investors in comparing our operating performance with that
of other media companies.
Note Regarding Forward-Looking
StatementsStatements in this release that are
“forward-looking statements” are based upon current expectations
and assumptions, and involve certain risks and uncertainties within
the meaning of the U.S. Private Securities Litigation Reform Act of
1995. Words or expressions such as “looking ahead,” “intends,”
“believes,” “expects,” “seek,” “will,” “should,” or variations of
such words and similar expressions are intended to identify such
forward-looking statements. Forward-looking statements by their
nature address matters that are, to different degrees, uncertain.
Key risks are described in the Company’s reports filed with the
Securities and Exchange Commission (“SEC”) including its annual
report on Form 10-K and quarterly reports on Form 10-Q. Readers
should note that forward-looking statements are subject to change
and to inherent risks and uncertainties and may be impacted by
several factors, including:
- external economic forces and
conditions that could have a material adverse impact on our
advertising revenues and results of operations;
- the ability of our stations to
compete effectively in their respective markets for advertising
revenues;
- our ability to develop compelling
and differentiated digital content, products and services;
- audience acceptance of our content,
particularly our audio programs;
- our ability to respond to changes
in technology, standards and services that affect the audio
industry;
- our dependence on federally issued
licenses subject to extensive federal regulation;
- actions by the FCC or new
legislation affecting the audio industry;
- increases to royalties we pay to
copyright owners or the adoption of legislation requiring royalties
to be paid to record labels and recording artists;
- our dependence on selected market
clusters of stations for a material portion of our net
revenue;
- credit risk on our accounts
receivable;
- the risk that our FCC licenses
and/or goodwill could become impaired;
- our substantial debt levels and the
potential effect of restrictive debt covenants on our operational
flexibility and ability to pay dividends;
- the potential effects of hurricanes
on our corporate offices and stations;
- the failure or destruction of the
internet, satellite systems and transmitter facilities that we
depend upon to distribute its programming;
- disruptions or security breaches of
our information technology infrastructure and information
systems;
- the loss of key personnel;
- our ability to integrate acquired
businesses and achieve fully the strategic and financial objectives
related thereto and their impact on our financial condition and
results of operations;
- the fact that our Company is
controlled by the Beasley family, which creates difficulties for
any attempt to gain control of our Company; and
- other economic, business,
competitive, and regulatory factors affecting our businesses,
including those set forth in our filings with the SEC.
Our actual performance and results could differ materially
because of these factors and other factors discussed in our SEC
filings, including but not limited to our annual reports on Form
10-K or quarterly reports on Form 10-Q, copies of which can be
obtained from the SEC, www.sec.gov, or our website, www.bbgi.com.
All information in this release is as of August 3, 2023 and we
undertake no obligation to update the information contained herein
to actual results or changes to our expectations.
Condensed Consolidated Statements of Comprehensive Loss
(Unaudited) |
|
|
Three months ended |
|
Six months ended |
|
June 30, |
|
June 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net revenue |
$ |
63,461,723 |
|
|
$ |
64,810,450 |
|
|
$ |
121,240,843 |
|
|
$ |
120,530,718 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
Operating expenses (including stock-based compensation and
excluding depreciation and amortization shown separately
below) |
|
51,327,562 |
|
|
|
53,626,592 |
|
|
|
101,981,217 |
|
|
|
103,636,141 |
|
Corporate expenses (including stock-based compensation) |
|
4,405,031 |
|
|
|
4,567,470 |
|
|
|
8,888,126 |
|
|
|
8,800,930 |
|
Depreciation and amortization |
|
2,195,985 |
|
|
|
2,451,102 |
|
|
|
4,425,310 |
|
|
|
4,967,002 |
|
Impairment losses |
|
10,041,000 |
|
|
|
8,619,097 |
|
|
|
10,041,000 |
|
|
|
10,476,323 |
|
Total operating expenses |
|
67,969,578 |
|
|
|
69,264,261 |
|
|
|
125,335,653 |
|
|
|
127,880,396 |
|
Operating loss |
|
(4,507,855 |
) |
|
|
(4,453,811 |
) |
|
|
(4,094,810 |
) |
|
|
(7,349,678 |
) |
Non-operating income
(expense): |
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
(6,724,469 |
) |
|
|
(6,823,217 |
) |
|
|
(13,318,321 |
) |
|
|
(13,672,254 |
) |
Other income, net |
|
36,735 |
|
|
|
190,210 |
|
|
|
577,250 |
|
|
|
191,082 |
|
Loss before income taxes |
|
(11,195,589 |
) |
|
|
(11,086,818 |
) |
|
|
(16,835,881 |
) |
|
|
(20,830,850 |
) |
Income tax expense
(benefit) |
|
(821,836 |
) |
|
|
3,554,469 |
|
|
|
(2,985,819 |
) |
|
|
(2,621,977 |
) |
Loss before equity in earnings of unconsolidated affiliates |
|
(10,373,753 |
) |
|
|
(14,641,287 |
) |
|
|
(13,850,062 |
) |
|
|
(18,208,873 |
) |
Equity in earnings of
unconsolidated affiliates, net of tax |
|
(56,876 |
) |
|
|
186,570 |
|
|
|
(117,133 |
) |
|
|
163,226 |
|
Net loss |
|
(10,430,629 |
) |
|
|
(14,454,717 |
) |
|
|
(13,967,195 |
) |
|
|
(18,045,647 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per
share |
$ |
(0.35 |
) |
|
|
(0.49 |
) |
|
$ |
(0.47 |
) |
|
$ |
(0.61 |
) |
Basic and diluted common
shares outstanding |
$ |
29,853,144 |
|
|
|
29,418,951 |
|
|
$ |
29,819,638 |
|
|
$ |
29,395,003 |
|
|
Selected Balance Sheet Data - Unaudited |
(in thousands) |
|
|
June 30, |
|
December 31, |
|
2023 |
|
2022 |
Cash and cash equivalents |
$ |
35,491 |
|
|
$ |
39,535 |
|
Working capital |
|
43,672 |
|
|
|
48,966 |
|
Total assets |
|
698,426 |
|
|
|
714,943 |
|
Long-term debt, net of
unamortized debt issuance costs |
|
283,249 |
|
|
|
285,473 |
|
Stockholders' equity |
$ |
209,809 |
|
|
$ |
223,489 |
|
|
Selected Statement of Cash Flows Data –
Unaudited |
|
|
Six months ended |
|
June 30, |
|
2023 |
|
|
2022 |
|
Net cash provided by operating activities |
$ |
23,711 |
|
|
$ |
6,751,546 |
|
Net cash used in investing
activities |
|
(2,016,185 |
) |
|
|
(7,301,590 |
) |
Net cash used in financing
activities |
|
(2,051,517 |
) |
|
|
(4,910,152 |
) |
Net decrease in cash and cash
equivalents |
$ |
(4,043,991 |
) |
|
$ |
(5,460,196 |
) |
|
Calculation of Adjusted EBITDA |
|
|
|
|
|
Three months ended |
|
Six months ended |
|
June 30, |
|
June 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net revenue |
$ |
63,461,723 |
|
|
$ |
64,810,450 |
|
|
$ |
121,240,843 |
|
|
$ |
120,530,718 |
|
Operating expenses |
|
(51,327,562 |
) |
|
|
(53,626,592 |
) |
|
|
(101,981,217 |
) |
|
|
(103,636,141 |
) |
Corporate expenses |
|
(4,405,031 |
) |
|
|
(4,567,470 |
) |
|
|
(8,888,126 |
) |
|
|
(8,800,930 |
) |
Adjusted EBITDA |
$ |
7,729,130 |
|
|
$ |
6,616,388 |
|
|
$ |
10,371,500 |
|
|
$ |
8,093,647 |
|
|
Reconciliation of Net Loss to Adjusted EBITDA |
|
|
Three months ended |
|
Six months ended |
|
June 30, |
|
June 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net loss |
$ |
(10,430,629 |
) |
|
$ |
(14,454,717 |
) |
|
$ |
(13,967,195 |
) |
|
$ |
(18,045,647 |
) |
Interest expense |
|
6,724,469 |
|
|
|
6,823,217 |
|
|
|
13,318,321 |
|
|
|
13,672,254 |
|
Income tax expense
(benefit) |
|
(821,836 |
) |
|
|
3,554,469 |
|
|
|
(2,985,819 |
) |
|
|
(2,621,977 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization |
|
2,195,985 |
|
|
|
2,451,102 |
|
|
|
4,425,310 |
|
|
|
4,967,002 |
|
EBITDA |
$ |
(2,332,011 |
) |
|
$ |
(1,625,929 |
) |
|
$ |
790,617 |
|
|
|
(2,028,368 |
) |
Impairment losses |
|
10,041,000 |
|
|
|
8,619,097 |
|
|
|
10,041,000 |
|
|
|
10,476,323 |
|
Other income, net |
|
(36,735 |
) |
|
|
(190,210 |
) |
|
|
(577,250 |
) |
|
|
(191,082 |
) |
Equity in earnings of
unconsolidated affiliates, net of tax |
|
56,876 |
|
|
|
(186,570 |
) |
|
|
117,133 |
|
|
|
(163,226 |
) |
Adjusted EBITDA |
$ |
7,729,130 |
|
|
$ |
6,616,388 |
|
|
$ |
10,371,500 |
|
|
$ |
8,093,647 |
|
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