UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________
FORM
[X] | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period Ended June 30, 2022
OR
[ ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission FileNo. Number: 000-29253
BEASLEY BROADCAST GROUP, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware | 65-0960915 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification |
3033 Riviera Drive, Suite 200
Naples, Florida34103
(Address of Principal Executive Offices and Zip Code)
(239) 263-5000
(Registrant’sRegistrant's Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class | Trading Symbol | Name of Each Exchange on which Registered | ||
Class A Common Stock, par value $0.001 per share | BBGI | Nasdaq Global Market |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation(§ (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
Large accelerated filer | Accelerated filer | |||||
Non-accelerated filer | ||||||
Smaller reporting company | ||||||
Emerging growth company | ||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule☐ No ☒
Indicate the number of shares outstanding of each of the issuer’sissuer's classes of common stock, as of the latest practicable date.
Class A Common Stock, $0.001 par value, 12,880,70113,296,990 Shares Outstanding as of August 8, 2022
Class B Common Stock, $0.001August 8, 2022
INDEX
Page No. | ||||||
PART I FINANCIAL INFORMATION | ||||||
Item 1. | Condensed Consolidated Financial Statements. | |||||
7 | ||||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. | 14 | ||||
Item 3. | 20 | |||||
Item 4. | 20 | |||||
Item 1. | 21 | |||||
Item 1A. | 21 | |||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. | 21 | ||||
Item 3. | 21 | |||||
Item 4. | 21 | |||||
Item 5. | 21 | |||||
Item 6. | 22 | |||||
23 | ||||||
BEASLEY BROADCAST GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
December 31, | June 30, | |||||||
2021 | 2022 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 51,378,642 | $ | 45,918,446 | ||||
Accounts receivable, less allowance for doubtful accounts of $1,720,477 in 2021 and $1,648,342 in 2022 | 53,378,437 | 45,628,769 | ||||||
Prepaid expenses | 4,044,056 | 6,330,503 | ||||||
Other current assets | 3,397,418 | 3,983,998 | ||||||
Total current assets | 112,198,553 | 101,861,716 | ||||||
Property and equipment, net | 49,843,166 | 52,658,061 | ||||||
Operating lease right-of-use | 34,155,175 | 36,970,653 | ||||||
Finance lease right-of-use | 320,000 | 313,333 | ||||||
FCC licenses | 508,413,913 | 503,003,909 | ||||||
Goodwill | 28,596,547 | 22,739,996 | ||||||
Other intangibles, net | 22,697,207 | 23,373,197 | ||||||
Other assets | 5,863,501 | 7,688,682 | ||||||
Total assets | $ | 762,088,062 | $ | 748,609,547 | ||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities: | ||||||||
Current installments of long-term debt | $ | — | $ | 2,000,000 | ||||
Accounts payable | 6,995,081 | 9,637,062 | ||||||
Operating lease liabilities | 7,693,831 | 7,385,483 | ||||||
Finance lease liabilities | 1,945 | — | ||||||
Other current liabilities | 29,811,226 | 30,842,734 | ||||||
Total current liabilities | 44,502,083 | 49,865,279 | ||||||
Due to related parties | 372,193 | 101,087 | ||||||
Long-term debt, net of current installments and unamortized debt issuance costs | 293,789,892 | 287,641,142 | ||||||
Operating lease liabilities | 28,747,450 | 36,635,544 | ||||||
Deferred tax liabilities | 115,689,317 | 112,930,112 | ||||||
Other long-term liabilities | 15,904,829 | 15,899,359 | ||||||
Total liabilities | 499,005,764 | 503,072,523 | ||||||
Commitments and contingencies | 0 | |||||||
Stockholders’ equity: | ||||||||
Preferred stock, $0.001 par value; 10,000,000 shares authorized; 0ne issued | 0— | 0— | ||||||
Class A common stock, $0.001 par value; 150,000,000 shares authorized; 16,249,312 issued and 12,696,857 outstanding in 2021; 16,503,979 issued and 12,880,701 outstanding in 2022 | 16,248 | 16,502 | ||||||
Class B common stock, $0.001 par value; 75,000,000 shares authorized; 16,662,743 issued and outstanding in 2021 and 2022 | 16,662 | 16,662 | ||||||
Additional paid-in capital | 150,896,611 | 151,502,437 | ||||||
Treasury stock, Class A common stock; 3,552,455 shares in 2021; 3,623,278 shares in 2022 | (29,021,360 | ) | (29,127,067 | ) | ||||
Retained earnings | 142,220,494 | 124,174,847 | ||||||
Accumulated other comprehensive loss | (1,046,357 | ) | (1,046,357 | ) | ||||
Total stockholders’ equity | 263,082,298 | 245,537,024 | ||||||
Total liabilities and stockholders’ equity | $ | 762,088,062 | $ | 748,609,547 | ||||
|
| December 31, |
|
| June 30, |
| ||
|
| 2022 |
|
| 2023 |
| ||
ASSETS |
|
|
|
|
| |||
Current assets: |
|
|
|
|
|
| ||
Cash and cash equivalents |
| $ | 39,534,653 |
|
| $ | 35,490,662 |
|
Accounts receivable, less allowance for credit losses of $1,876,751 in 2022 and |
|
| 56,683,526 |
|
|
| 55,299,435 |
|
Prepaid expenses |
|
| 5,078,231 |
|
|
| 8,669,362 |
|
Other current assets |
|
| 4,364,120 |
|
|
| 4,931,795 |
|
Total current assets |
|
| 105,660,530 |
|
|
| 104,391,254 |
|
Property and equipment, net |
|
| 55,807,047 |
|
|
| 53,442,533 |
|
Operating lease right-of-use assets |
|
| 38,478,756 |
|
|
| 37,398,260 |
|
Finance lease right-of-use assets |
|
| 306,667 |
|
|
| 300,000 |
|
FCC licenses |
|
| 487,249,798 |
|
|
| 477,208,798 |
|
Goodwill |
|
| 13,265,460 |
|
|
| 13,265,460 |
|
Other intangibles, net |
|
| 8,219,939 |
|
|
| 7,735,897 |
|
Other assets |
|
| 5,955,158 |
|
|
| 4,684,273 |
|
Total assets |
| $ | 714,943,355 |
|
| $ | 698,426,475 |
|
|
|
|
|
|
| |||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
| |||
Current liabilities: |
|
|
|
|
|
| ||
Accounts payable |
| $ | 19,344,621 |
|
| $ | 20,071,365 |
|
Operating lease liabilities |
|
| 8,166,394 |
|
|
| 8,317,603 |
|
Other current liabilities |
|
| 29,183,630 |
|
|
| 32,330,526 |
|
Total current liabilities |
|
| 56,694,645 |
|
|
| 60,719,494 |
|
Due to related parties |
|
| 85,731 |
|
|
| 70,375 |
|
Long-term debt, net of unamortized debt issuance costs |
|
| 285,472,107 |
|
|
| 283,249,402 |
|
Operating lease liabilities |
|
| 37,485,602 |
|
|
| 36,011,146 |
|
Deferred tax liabilities |
|
| 98,068,981 |
|
|
| 94,924,594 |
|
Other long-term liabilities |
|
| 13,647,481 |
|
|
| 13,642,011 |
|
Total liabilities |
|
| 491,454,547 |
|
|
| 488,617,022 |
|
Commitments and contingencies |
|
|
|
|
|
| ||
Stockholders' equity: |
|
|
|
|
|
| ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized; none issued |
|
| - |
|
|
| - |
|
Class A common stock, $0.001 par value; 150,000,000 shares authorized; 16,763,227 |
|
| 16,761 |
|
|
| 17,015 |
|
Class B common stock, $0.001 par value; 75,000,000 shares authorized; 16,662,743 |
|
| 16,662 |
|
|
| 16,662 |
|
Additional paid-in capital |
|
| 151,948,310 |
|
|
| 152,303,663 |
|
Treasury stock, Class A common stock; 3,649,568 shares in 2022; 3,719,886 shares |
|
| (29,155,300 | ) |
|
| (29,223,067 | ) |
Retained earnings |
|
| 100,163,064 |
|
|
| 86,195,869 |
|
Accumulated other comprehensive income |
|
| 499,311 |
|
|
| 499,311 |
|
Total stockholders' equity |
|
| 223,488,808 |
|
|
| 209,809,453 |
|
Total liabilities and stockholders' equity |
| $ | 714,943,355 |
|
| $ | 698,426,475 |
|
3
BEASLEY BROADCAST GROUP, INC.
Three Months Ended June 30, | ||||||||
2021 | 2022 | |||||||
Net revenue | $ | 59,574,705 | $ | 64,810,450 | ||||
Operating expenses: | ||||||||
Operating expenses (including stock-based compensation of $176,349 in 2021 and $75,368 in 2022 and excluding depreciation and amortization shown separately below) | 48,494,420 | 53,626,592 | ||||||
Corporate expenses (including stock-based compensation of $225,850 in 2021 and $303,462 in 2022) | 3,957,854 | 4,567,470 | ||||||
Depreciation and amortization | 2,850,923 | 2,451,102 | ||||||
Impairment losses | — | 8,619,097 | ||||||
Other operating income, net | (1,500,000 | ) | — | |||||
Total operating expenses | 53,803,197 | 69,264,261 | ||||||
Operating income (loss) | 5,771,508 | (4,453,811 | ) | |||||
Non-operating income (expense): | ||||||||
Interest expense | (6,865,369 | ) | (6,823,217 | ) | ||||
Other income, net | 8,080 | 190,210 | ||||||
Loss before income taxes | (1,085,781 | ) | (11,086,818 | ) | ||||
Income tax expense (benefit) | (1,299,394 | ) | 3,554,469 | |||||
Income (loss) before equity in earnings of unconsolidated affiliates | 213,613 | (14,641,287 | ) | |||||
Equity in earnings of unconsolidated affiliates, net of tax | (25,919 | ) | 186,570 | |||||
Net income (loss) | 187,694 | (14,454,717 | ) | |||||
Net income (loss) per Class A and Class B common share: | ||||||||
Basic and diluted | $ | 0.01 | $ | (0.49 | ) | |||
Weighted average shares outstanding: | ||||||||
Basic | 29,235,009 | 29,418,951 | ||||||
Diluted | 29,324,614 | 29,418,951 | ||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)
Six Months Ended June 30, | ||||||||
2021 | 2022 | |||||||
Net revenue | $ | 107,786,745 | $ | 120,530,718 | ||||
Operating expenses: | ||||||||
Operating expenses (including stock-based compensation of $247,280 in 2021 and $153,591 in 2022 and excluding depreciation and amortization shown separately below) | 91,462,291 | 103,636,141 | ||||||
Corporate expenses (including stock-based compensation of $675,720 in 2021 and $452,489 in 2022) | 7,863,143 | 8,800,930 | ||||||
Depreciation and amortization | 5,802,824 | 4,967,002 | ||||||
Impairment losses | — | 10,476,323 | ||||||
Gain on disposition | (191,988 | ) | — | |||||
Other operating income, net | (400,000 | ) | — | |||||
Total operating expenses | 104,536,270 | 127,880,396 | ||||||
Operating income (loss) | 3,250,475 | (7,349,678 | ) | |||||
Non-operating income (expense): | ||||||||
Interest expense | (12,643,440 | ) | (13,672,254 | ) | ||||
Loss on extinguishment of long-term debt | (4,996,731 | ) | — | |||||
Other income, net | 46,493 | 191,082 | ||||||
Loss before income taxes | (14,343,203 | ) | (20,830,850 | ) | ||||
Income tax benefit | (3,902,280 | ) | (2,621,977 | ) | ||||
Loss before equity in earnings of unconsolidated affiliates | (10,440,923 | ) | (18,208,873 | ) | ||||
Equity in earnings of unconsolidated affiliates, net of tax | (56,024 | ) | 163,226 | |||||
Net loss | (10,496,947 | ) | (18,045,647 | ) | ||||
Earnings attributable to noncontrolling interest | 129,249 | — | ||||||
Net loss attributable to BBGI stockholders | (10,367,698 | ) | (18,045,647 | ) | ||||
Net loss attributable to BBGI stockholders per Class A and Class B common share: | ||||||||
Basic and diluted | $ | (0.35 | ) | $ | (0.61 | ) | ||
Weighted average shares outstanding: | ||||||||
Basic and diluted | 29,268,717 | 29,395,003 | ||||||
|
| Three Months Ended June 30, |
| |||||
|
| 2022 |
|
| 2023 |
| ||
Net revenue |
| $ | 64,810,450 |
|
| $ | 63,461,723 |
|
Operating expenses: |
|
|
|
|
|
| ||
Operating expenses (including stock-based compensation of $75,368 in 2022 |
|
| 53,626,592 |
|
|
| 51,327,562 |
|
Corporate expenses (including stock-based compensation of $303,462 in 2022 |
|
| 4,567,470 |
|
|
| 4,405,031 |
|
Depreciation and amortization |
|
| 2,451,102 |
|
|
| 2,195,985 |
|
Impairment losses |
|
| 8,619,097 |
|
|
| 10,041,000 |
|
Total operating expenses |
|
| 69,264,261 |
|
|
| 67,969,578 |
|
Operating loss |
|
| (4,453,811 | ) |
|
| (4,507,855 | ) |
Non-operating income (expense): |
|
|
|
|
|
| ||
Interest expense |
|
| (6,823,217 | ) |
|
| (6,724,469 | ) |
Other income, net |
|
| 190,210 |
|
|
| 36,735 |
|
Loss before income taxes |
|
| (11,086,818 | ) |
|
| (11,195,589 | ) |
Income tax expense (benefit) |
|
| 3,554,469 |
|
|
| (821,836 | ) |
Loss before equity in earnings of unconsolidated affiliates |
|
| (14,641,287 | ) |
|
| (10,373,753 | ) |
Equity in earnings of unconsolidated affiliates, net of tax |
|
| 186,570 |
|
|
| (56,876 | ) |
Net loss |
|
| (14,454,717 | ) |
|
| (10,430,629 | ) |
Net loss per Class A and Class B common share: |
|
|
|
|
|
| ||
Basic and diluted |
| $ | (0.49 | ) |
| $ | (0.35 | ) |
Weighted average shares outstanding: |
|
|
|
|
|
| ||
Basic and diluted |
|
| 29,418,951 |
|
|
| 29,853,144 |
|
4
BEASLEY BROADCAST GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)
|
| Six Months Ended June 30, |
| |||||
|
| 2022 |
|
| 2023 |
| ||
Net revenue |
| $ | 120,530,718 |
|
| $ | 121,240,843 |
|
Operating expenses: |
|
|
|
|
|
| ||
Operating expenses (including stock-based compensation of $153,591 in 2022 |
|
| 103,636,141 |
|
|
| 101,981,217 |
|
Corporate expenses (including stock-based compensation of $452,489 in 2022 |
|
| 8,800,930 |
|
|
| 8,888,126 |
|
Depreciation and amortization |
|
| 4,967,002 |
|
|
| 4,425,310 |
|
Impairment losses |
|
| 10,476,323 |
|
|
| 10,041,000 |
|
Total operating expenses |
|
| 127,880,396 |
|
|
| 125,335,653 |
|
Operating loss |
|
| (7,349,678 | ) |
|
| (4,094,810 | ) |
Non-operating income (expense): |
|
|
|
|
|
| ||
Interest expense |
|
| (13,672,254 | ) |
|
| (13,318,321 | ) |
Other income, net |
|
| 191,082 |
|
|
| 577,250 |
|
Loss before income taxes |
|
| (20,830,850 | ) |
|
| (16,835,881 | ) |
Income tax benefit |
|
| (2,621,977 | ) |
|
| (2,985,819 | ) |
Loss before equity in earnings of unconsolidated affiliates |
|
| (18,208,873 | ) |
|
| (13,850,062 | ) |
Equity in earnings of unconsolidated affiliates, net of tax |
|
| 163,226 |
|
|
| (117,133 | ) |
Net loss |
|
| (18,045,647 | ) |
|
| (13,967,195 | ) |
Net loss per Class A and Class B common share: |
|
|
|
|
|
| ||
Basic and diluted |
| $ | (0.61 | ) |
| $ | (0.47 | ) |
Weighted average shares outstanding: |
|
|
|
|
|
| ||
Basic and diluted |
|
| 29,395,003 |
|
|
| 29,819,638 |
|
5
BEASLEY BROADCAST GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Six Months Ended June 30, | ||||||||
2021 | 2022 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (10,496,947 | ) | $ | (18,045,647 | ) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
Stock-based compensation | 923,000 | 606,080 | ||||||
Provision for bad debts | (1,779,188 | ) | 588,751 | |||||
Depreciation and amortization | 5,802,824 | 4,967,002 | ||||||
Impairment losses | — | 10,476,323 | ||||||
Gain on disposition | (191,988 | ) | — | |||||
Amortization of loan fees | 791,574 | 754,085 | ||||||
Loss on extinguishment of long-term debt | 4,996,731 | — | ||||||
Deferred income taxes | (3,902,280 | ) | (2,747,810 | ) | ||||
Equity in earnings of unconsolidated affiliates | 56,024 | (163,226 | ) | |||||
Change in operating assets and liabilities: | ||||||||
Accounts receivable | 4,835,493 | 7,160,917 | ||||||
Prepaid expenses | (2,320,101 | ) | (2,286,447 | ) | ||||
Other assets | (1,684,017 | ) | (2,176,152 | ) | ||||
Accounts payable | (5,837,685 | ) | 2,641,981 | |||||
Other liabilities | 13,446,861 | 5,003,953 | ||||||
Other operating activities | 208,725 | (28,264 | ) | |||||
Net cash provided by operating activities | 4,849,026 | 6,751,546 | ||||||
Cash flows from investing activities: | ||||||||
Payment for acquisition | — | (2,000,000 | ) | |||||
Capital expenditures | (2,553,787 | ) | (6,486,902 | ) | ||||
Proceeds from dispositions | 362,500 | 1,185,312 | ||||||
Net cash used in investing activities | (2,191,287 | ) | (7,301,590 | ) | ||||
Cash flows from financing activities: | ||||||||
Issuance of debt | 310,000,000 | — | ||||||
Payments on debt | (268,500,000 | ) | (4,802,500 | ) | ||||
Payment of debt issuance costs | (7,604,215 | ) | — | |||||
Reduction of finance lease liabilities | (35,086 | ) | (1,945 | ) | ||||
Purchase of treasury stock | (136,779 | ) | (105,707 | ) | ||||
Net cash provided by (used in) financing activities | 33,723,920 | (4,910,152 | ) | |||||
Net increase (decrease) in cash and cash equivalents | 36,381,659 | (5,460,196 | ) | |||||
Cash and cash equivalents at beginning of period | 20,759,432 | 51,378,642 | ||||||
Cash and cash equivalents at end of period | $ | 57,141,091 | $ | 45,918,446 | ||||
Cash paid for interest | $ | 1,837,493 | $ | 12,921,869 | ||||
Cash paid for income taxes | $ | 1,526,303 | $ | 1,546,500 | ||||
Supplemental disclosure of non-cash investing and financing activities: | ||||||||
Acquisition of noncontrolling interest | $ | 4,490,130 | $ | — | ||||
Extinguishment of trade sales payable | $ | 934,500 | $ | — | ||||
Class A common stock returned to treasury stock | $ | 670,594 | $ | — | ||||
|
| Six Months Ended June 30, |
| |||||
|
| 2022 |
|
| 2023 |
| ||
Cash flows from operating activities: |
|
|
|
|
|
| ||
Net loss |
| $ | (18,045,647 | ) |
| $ | (13,967,195 | ) |
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
|
|
| ||
Stock-based compensation |
|
| 606,080 |
|
|
| 355,607 |
|
Provision for credit losses |
|
| 588,751 |
|
|
| 525,814 |
|
Depreciation and amortization |
|
| 4,967,002 |
|
|
| 4,425,310 |
|
Impairment losses |
|
| 10,476,323 |
|
|
| 10,041,000 |
|
Amortization of loan fees |
|
| 754,085 |
|
|
| 734,253 |
|
Gain on debt purchases |
|
| (100,335 | ) |
|
| (973,208 | ) |
Deferred income taxes |
|
| (2,747,810 | ) |
|
| (3,144,387 | ) |
Equity in earnings of unconsolidated affiliates |
|
| (163,226 | ) |
|
| 117,133 |
|
Change in operating assets and liabilities: |
|
|
|
|
|
| ||
Accounts receivable |
|
| 7,160,917 |
|
|
| 858,277 |
|
Prepaid expenses |
|
| (2,286,447 | ) |
|
| (3,591,131 | ) |
Other assets |
|
| (2,176,152 | ) |
|
| 947,918 |
|
Accounts payable |
|
| 2,641,981 |
|
|
| 726,744 |
|
Other liabilities |
|
| 5,003,953 |
|
|
| 2,840,148 |
|
Other operating activities |
|
| 72,071 |
|
|
| 127,428 |
|
Net cash provided by operating activities |
|
| 6,751,546 |
|
|
| 23,711 |
|
Cash flows from investing activities: |
|
|
|
|
|
| ||
Payment for acquisition |
|
| (2,000,000 | ) |
|
| - |
|
Capital expenditures |
|
| (6,486,902 | ) |
|
| (2,016,185 | ) |
Proceeds from dispositions |
|
| 1,185,312 |
|
|
| - |
|
Net cash used in investing activities |
|
| (7,301,590 | ) |
|
| (2,016,185 | ) |
Cash flows from financing activities: |
|
|
|
|
|
| ||
Payments on debt |
|
| (4,802,500 | ) |
|
| (1,983,750 | ) |
Reduction of finance lease liabilities |
|
| (1,945 | ) |
|
| - |
|
Purchase of treasury stock |
|
| (105,707 | ) |
|
| (67,767 | ) |
Net cash used in financing activities |
|
| (4,910,152 | ) |
|
| (2,051,517 | ) |
Net decrease in cash and cash equivalents |
|
| (5,460,196 | ) |
|
| (4,043,991 | ) |
Cash and cash equivalents at beginning of period |
|
| 51,378,642 |
|
|
| 39,534,653 |
|
Cash and cash equivalents at end of period |
| $ | 45,918,446 |
|
| $ | 35,490,662 |
|
Cash paid for interest |
| $ | 12,921,869 |
|
| $ | 12,569,776 |
|
Cash paid for income taxes |
| $ | 1,546,500 |
|
| $ | 1,246,263 |
|
6
BEASLEY BROADCAST GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of Beasley Broadcast Group, Inc. and its subsidiaries (the “Company”) included in the Company’s Annual Report on Form2021.2022. These financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form
Use of Estimates
Preparing financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. Such estimates include: (i) the amount of allowance for credit losses; (ii) future cash flows used for testing recoverability of property and equipment; (iii) fair values used for testing Federal Communications Commission (“FCC”) licenses, goodwill and other intangibles for impairment; (iv) estimates used to determine the incremental borrowing rate to record lease liabilities and related right-of-use assets; (v) the realization of deferred tax assets; and (vi) actuarial assumptions related to the SERP. Actual results and outcomes may differ from management’s estimates and assumptions.
Accounts Receivable
Accounts receivable consist primarily of uncollected amounts due from advertisers for the sale of advertising airtime. The amounts are net of advertising agency commissions and an allowance for credit losses. The allowance for credit losses reflects management’s estimate of expected losses in accounts receivable from local advertisers and national agencies. Management determines the allowance based on historical information, relative improvements or deteriorations in the age of the accounts receivable and changes in current economic conditions and reasonable and supportable forecasts of future economic conditions. Interest is not accrued on accounts receivable.
The changes in allowance for credit losses on accounts receivable are as follows:
| Three months ended June 30, |
|
| Six months ended June 30, |
| |||||||||||
| 2022 |
|
| 2023 |
|
| 2022 |
|
| 2023 |
| |||||
Beginning balance |
| $ | 1,510,422 |
|
| $ | 1,740,162 |
|
| $ | 1,720,477 |
|
| $ | 1,876,751 |
|
Provision for credit losses |
|
| 511,253 |
|
|
| 295,122 |
|
|
| 588,751 |
|
|
| 525,814 |
|
Deductions |
|
| (373,333 | ) |
|
| (186,689 | ) |
|
| (660,886 | ) |
|
| (553,970 | ) |
Ending balance |
| $ | 1,648,342 |
|
| $ | 1,848,595 |
|
| $ | 1,648,342 |
|
| $ | 1,848,595 |
|
Recent Accounting Pronouncements
In June 2016, the Financial Accounting Standards Board (“FASB”) issued guidance that will require the measurement of all expected credit losses for financial assets, including accounts receivable, held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The guidance was initially effective for the Company for annual reporting periods beginning after December 15, 2019, and interim periods within those fiscal years. In November 2019, the FASB issued additional guidance that included a deferral of the effective date for smaller reporting companies as defined by the Securities and Exchange Commission to fiscal years beginning after December 15, 2022, and interim periods within those years. The Company adopted the guidance on January 1, 2023, and the adoption did not have a material impact on the Company’s condensed consolidated financial statements.
7
BEASLEY BROADCAST GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Due to the potential sales of certain audio assets in 2023, the Company recorded impairment losses of $10.0 million during the second quarter of 2023 based on the estimated fair value of these audio assets. Management determined that the reclassification to assets held for sale would not have a material impact on the Company’s condensed consolidated balance sheet as of June 30, 2023.
On June 22, 2022, the Company completed the acquisition of Guarantee Digital, LLC (“Guarantee”), a digital marketing agency, for $2.0$2.0 million in cash. The Company is currently determining whether the acquisition should be recordedwas accounted for as a business combination or an asset acquisition and has temporarily recorded the purchase price in other intangibles, net in the accompanying balance sheet as of June 30, 2022.combination. The purchase price allocation is expectedsummarized as follows:
Property and equipment |
| $ | 3,000 |
|
Goodwill |
|
| 922,000 |
|
Other intangibles |
|
| 1,075,000 |
|
| $ | 2,000,000 |
|
Goodwill was equal to be completed during the third quarteramount the purchase price exceeded the values allocated to the tangible and identifiable intangible assets and includes the value of 2022.
On April 1, 2022, the Company completed the sale of substantially all of the assets used in the operations of$1.25$1.25 million in cash. As a result of the sale, the Company recorded an impairment loss of $1.9$1.9 million related to the Federal Communications Commission (“FCC”)FCC license during the first quarter of 2022.
Balance as of January 1, 2022 | $ | 508,413,913 | ||
Radio station disposition (see Note 2) | (790,232 | ) | ||
Impairment losses (see below and also Note 2) | (4,619,772 | ) | ||
Balance as of June 30, 2022 | $ | 503,003,909 | ||
Due to an increase in interest rates in the U.S. economy, the Company tested its FCC licenses for impairment during the second quarter of 2022. As a result of the quantitative impairment test performed as of June 30, 2022, the Company recorded impairment losses of $2.8$2.8 million related to the FCC licenses in its Fort Myers-Naples, FL, Las Vegas, NV, and Wilmington, DE market clusters. The impairment losses were primarily due to an increase in the discount rate used in the discounted cash flow analyses to estimate the fair value of the FCC licenses due to certain risks associated with the U.S. economy.
The fair values of the FCC licenses in the Fort Myers-Naples, FL, Las Vegas, NV, and Wilmington, DE market clusters were estimated using an income approach. The income approach is based upon discounted cash flow analyses incorporating variables such as projected radio market revenues, projected growth rate for radio market revenues, projected radio market revenue shares, projected radio station operating income margins, and a discount rate appropriate for the radio broadcasting industry. The key assumptions used in the discounted cash flow analyses are as follows:
Revenue growth rates | (1.9)% - | |
Market revenue shares at maturity | 0.6% - | |
Operating income margins at maturity | 19.2 | |
Discount rate | 9.5% |
Balance as of January 1, 2022 | $ | 28,596,547 | ||
Impairment losses | (5,856,551 | ) | ||
Balance as of June 30, 2022 | $ | 22,739,996 | ||
Due to an increase in interest rates in the U.S. economy, the Company tested its goodwill for impairment during the second quarter of 2022. As a result of the quantitative impairment test performed as of June 30, 2022, the Company recorded impairment losses of $5.9$5.9 million related to the goodwill in its Boston, MA, Charlotte, NC, Fayetteville, NC, Fort Myers-Naples, FL, and Tampa-Saint Petersburg, FL market clusters. The impairment losses were primarily due to an increase in the discount rate used in the discounted cash flow analyses to estimate the fair value of goodwill due to certain risks associated with the U.S. economy.
The fair values of the goodwill in the Boston, MA, Charlotte, NC, Fayetteville, NC, Fort Myers-Naples, FL, and Tampa-Saint Petersburg, FL market clusters waswere estimated using an income approach. The income approach is based upon discounted cash flow analyses incorporating variables such as projected radio market revenues, projected growth rate for radio market revenues, projected
8
BEASLEY BROADCAST GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
radio market revenue shares, projected radio station operating income margins, and a discount rate appropriate for the radio broadcasting industry. The key assumptions used in the discounted cash flow analyses are as follows:
Revenue growth rates | (1.9)% - | |
Operating income margins | 5.4% - | |
Discount rate | 9.5% |
Long-term debt is comprised of the following:
| December 31, |
|
| June 30, |
| |||
| 2022 |
|
| 2023 |
| |||
Secured notes |
| $ | 290,000,000 |
|
| $ | 287,000,000 |
|
Less unamortized debt issuance costs |
|
| (4,527,893 | ) |
|
| (3,750,598 | ) |
| $ | 285,472,107 |
|
| $ | 283,249,402 |
| |
December 31, 2021 | June 30, 2022 | |||||||
Secured notes | $ | 300,000,000 | $ | 295,000,000 | ||||
Less unamortized debt issuance costs | (6,210,108 | ) | (5,358,858 | ) | ||||
| 293,789,892 | 289,641,142 | |||||||
Less current installments | — | (2,000,000 | ) | |||||
| $ | 293,789,892 | $ | 287,641,142 | |||||
On February 2, 2021, the Company issued $300.0$300.0 million aggregate principal amount of 8.625%8.625% senior secured notes due on February 1, 2026 (the “Notes”) under an indenture dated February 2, 2021 (the “Indenture”). Interest on the Notes accrues at the rate of8.625% 8.625% per annum and is payable semiannually in arrears on February 1 and August 1 of each year. The Notes are secured on a first-lien priority basis by substantially all assets of the Company and its majority ownedmajority-owned subsidiaries and are guaranteed jointly and severally by the Company and its majority ownedmajority-owned subsidiaries. The Indenture contains restrictive covenants that limit the ability of the Company and its subsidiaries to, among other things, incur additional indebtedness, guarantee indebtedness or issue disqualified stock or, in the case of such subsidiaries, preferred stock; pay dividends on, repurchase or make distributions in respect of our capital stock or make other restricted payments; make certain investments or acquisitions; sell, transfer or otherwise convey certain assets; create
In Aprilthe second quarter of 2023, the Company repurchased $3.0 million principal amount of the Notes for a price equal to 66% of the principal amount and recorded a gain of $1.0 million as a result of the repurchase.
In the second quarter of 2022, the Company repurchased $5.0$5.0 million aggregate principal amount of the Notes for an aggregate price equal to 96%96% of the principal amount. Asamount and recorded an aggregate gain of $0.1 million as a result of the repurchase, the Company recorded an aggregate gain on repurchase of long-term debt of $0.1 million during the second quarter of 2022. In July 2022, the Company repurchased $2.0 million principal amount of the Notes for a price equal to 75% of the principal amount. As a result of the repurchase, the Company recorded a gain on repurchase of long-term debt of $0.5 million during the third quarter of 2022.repurchases.
The changes in stockholders’ equity for the three and six months ended June 30, 2021 and 2022 are as follows:
| Three months ended June 30, |
|
| Six months ended June 30, |
| |||||||||||
| 2022 |
|
| 2023 |
|
| 2022 |
|
| 2023 |
| |||||
Beginning balance |
| $ | 259,689,019 |
|
| $ | 220,100,965 |
|
| $ | 263,082,298 |
|
| $ | 223,488,808 |
|
Stock-based compensation |
|
| 378,830 |
|
|
| 181,339 |
|
|
| 606,080 |
|
|
| 355,607 |
|
Purchase of treasury stock |
|
| (76,108 | ) |
|
| (42,222 | ) |
|
| (105,707 | ) |
|
| (67,767 | ) |
Net loss |
|
| (14,454,717 | ) |
|
| (10,430,629 | ) |
|
| (18,045,647 | ) |
|
| (13,967,195 | ) |
Ending balance |
| $ | 245,537,024 |
|
| $ | 209,809,453 |
|
| $ | 245,537,024 |
|
| $ | 209,809,453 |
|
9
BEASLEY BROADCAST GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2021 | 2022 | 2021 | 2022 | |||||||||||||
Beginning balance | $ | 252,739,797 | $ | 259,689,019 | $ | 267,101,820 | $ | 263,082,298 | ||||||||
Stock-based compensation | 402,199 | 378,830 | 923,000 | 606,080 | ||||||||||||
Acquisition of noncontrolling interest | — | — | (4,490,130 | ) | — | |||||||||||
Purchase of treasury stock | (22,471 | ) | (76,108 | ) | (807,373 | ) | (105,707 | ) | ||||||||
Net income (loss) | 187,694 | (14,454,717 | ) | (10,496,947 | ) | (18,045,647 | ) | |||||||||
Elimination of noncontrolling interest | — | — | 1,076,849 | — | ||||||||||||
Ending balance | $ | 253,307,219 | $ | 245,537,024 | $ | 253,307,219 | $ | 245,537,024 | ||||||||
Net revenue is comprised of the following:
| Three months ended June 30, |
|
| Six months ended June 30, |
| |||||||||||
| 2022 |
|
| 2023 |
|
| 2022 |
|
| 2023 |
| |||||
Audio |
| $ | 53,417,896 |
|
| $ | 50,448,093 |
|
| $ | 100,783,041 |
|
| $ | 97,866,059 |
|
Digital |
|
| 10,719,410 |
|
|
| 12,301,269 |
|
|
| 18,527,660 |
|
|
| 22,278,054 |
|
Other |
|
| 673,144 |
|
|
| 712,361 |
|
|
| 1,220,017 |
|
|
| 1,096,730 |
|
| $ | 64,810,450 |
|
| $ | 63,461,723 |
|
| $ | 120,530,718 |
|
| $ | 121,240,843 |
| |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2021 | 2022 | 2021 | 2022 | |||||||||||||
Audio | $ | 51,215,234 | $ | 53,417,896 | $ | 92,944,836 | $ | 100,783,041 | ||||||||
Digital | 7,983,343 | 10,719,410 | 13,747,071 | 18,527,660 | ||||||||||||
Other | 376,128 | 673,144 | 1,094,838 | 1,220,017 | ||||||||||||
| $ | 59,574,705 | $ | 64,810,450 | $ | 107,786,745 | $ | 120,530,718 | |||||||||
The Company recognizes revenue when it satisfies a performance obligation under a contract with an advertiser. The transaction price is allocated to performance obligations based on executed contracts which represent relative standalone selling prices. Payment is generally due within 30 days, although certain advertisers are required to pay in advance. Revenues are reported at the amount the Company expects to be entitled to receive under the contract. The Company has elected to use the practical expedient to expense sales commissions as incurred. Payments received from advertisers before the performance obligation is satisfied are recorded as deferred revenue in the balance sheet.sheets. Substantially all deferred revenue is recognized within twelve12 months of the payment date.
| December 31, |
|
| June 30, |
| |||
| 2022 |
|
| 2023 |
| |||
Deferred revenue |
| $ | 4,696,989 |
|
| $ | 6,636,401 |
|
December 31, 2021 | June 30, 2022 | |||||||
Deferred revenue | $ | 3,085,370 | $ | 5,112,294 | ||||
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2021 | 2022 | 2021 | 2022 | |||||||||||||
Losses on receivables | $ | 602,253 | $ | 373,333 | $ | 1,697,566 | $ | 660,886 | ||||||||
Audio revenue includes revenue from the sale or trade of aired commercial spots to advertisers directly or through national, regional or local advertising agencies. Each commercial spot is considered a performance obligation. Revenue is recognized when the commercial spots have aired. Trade sales are recorded at the estimated fair value of the goods or services received. If commercial spots are aired before the goods or services are received, then a trade sales receivable is recorded. If goods or services are received before the commercial spots are aired, then a trade sales payable is recorded. Other revenue includes revenue from concerts, promotional events, talent fees and other miscellaneous items. Such revenue is generally recognized when the concert, promotional event, or talent services are completed.
|
| December 31, |
|
| June 30, |
| ||
| 2022 |
|
| 2023 |
| |||
Trade sales receivable |
| $ | 1,564,054 |
|
| $ | 1,973,948 |
|
Trade sales payable |
|
| 806,162 |
|
|
| 849,333 |
|
| Three months ended June 30, |
|
| Six months ended June 30, |
| |||||||||||
| 2022 |
|
| 2023 |
|
| 2022 |
|
| 2023 |
| |||||
Trade sales revenue |
| $ | 1,504,105 |
|
| $ | 1,466,652 |
|
| $ | 2,876,678 |
|
| $ | 2,847,494 |
|
December 31, 2021 | June 30, 2022 | |||||||
Trade sales receivable | $ | 881,885 | $ | 1,087,601 | ||||
Trade sales payable | 614,467 | 723,239 | ||||||
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2021 | 2022 | 2021 | 2022 | |||||||||||||
Trade sales revenue | $ | 1,075,325 | $ | 1,504,105 | $ | 2,004,922 | $ | 2,876,678 | ||||||||
Digital revenue includes revenue from the sale of streamed commercial spots, station-owned assets and third-party products. Each streamed commercial spot, station-owned asset and third-party product is considered a performance obligation. Revenue is recognized when the commercial spots have streamed. Station-owned assets are generally scheduled over a period of time and revenue is recognized over time as the digital items are used for advertising content, except for streamed commercial spots. Third-party products are generally scheduled over a period of time with an impression target each month. Revenue from the sale of third-party products is recognized over time as the digital items are used for advertising content and impression targets are met each month.
10
BEASLEY BROADCAST GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The Beasley Broadcast Group, Inc. 2007 Equity Incentive Award Plan (the “2007 Plan”) permits the Company to issue up to 7.5 million shares of Class A common stock. The 2007 Plan allows for eligible employees, directors and certain consultants of the Company to receive restricted stock units, shares of restricted stock, stock options or other stock-based awards. The restricted stock units that have been granted under the 2007 Plan generally vest over one to five years of service.
A summary of restricted stock unit activity is presented below:
| Units |
|
| Weighted-Average Grant-Date Fair Value |
| |||
Unvested as of April 1, 2023 |
|
| 1,049,350 |
|
| $ | 1.78 |
|
Granted |
|
| - |
|
|
| - |
|
Vested |
|
| (170,500 | ) |
|
| 2.58 |
|
Forfeited |
|
| - |
|
|
| - |
|
Unvested as of June 30, 2023 |
|
| 878,850 |
|
| $ | 1.63 |
|
Units | Weighted- Average Grant-Date Fair Value | |||||||
Unvested as of April 1, 2022 | 918,816 | $ | 2.75 | |||||
Granted | 531,582 | 1.49 | ||||||
Vested | (211,333 | ) | 3.51 | |||||
Forfeited | (30,000 | ) | 2.47 | |||||
Unvested as of June 30, 2022 | 1,209,065 | $ | 2.07 | |||||
As of June 30, 2022,2023, there was $1.9$1.0 million of total unrecognized compensation cost for restricted stock units granted under the 2007 Plan. That cost is expected to be recognized over a weighted-average period of 2.02.4 years.
The Company’s effective tax rate was (120)32% and 32%(7)% for the three months ended June 30, 20212022 and 2022,2023, respectively, and (27)(13)% and (13)(18)% for the six months ended June 30, 20212022 and 2022,2023, respectively. These rates differ from the federal statutory rate of 21%21% due to the effect of state income taxes certainnon-taxableincome, and certain expenses that are not deductible for tax purposes.
Earnings per share calculation information is as follows:
| Three months ended June 30, |
|
| Six months ended June 30, |
| |||||||||||
| 2022 |
|
| 2023 |
|
| 2022 |
|
| 2023 |
| |||||
Net loss attributable to BBGI |
| $ | (14,454,717 | ) |
| $ | (10,430,629 | ) |
| $ | (18,045,647 | ) |
| $ | (13,967,195 | ) |
Weighted-average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Basic |
|
| 29,418,951 |
|
|
| 29,853,144 |
|
|
| 29,395,003 |
|
|
| 29,819,638 |
|
Effect of dilutive restricted stock units and |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Diluted |
|
| 29,418,951 |
|
|
| 29,853,144 |
|
|
| 29,395,003 |
|
|
| 29,819,638 |
|
Net loss attributable to BBGI |
| $ | (0.49 | ) |
| $ | (0.35 | ) |
| $ | (0.61 | ) |
| $ | (0.47 | ) |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2021 | 2022 | 2021 | 2022 | |||||||||||||
Net income (loss) attributable to BBGI stockholders | $ | 187,694 | $ | (14,454,717 | ) | $ | (10,367,698 | ) | $ | (18,045,647 | ) | |||||
Weighted-average shares outstanding: | ||||||||||||||||
Basic | 29,235,009 | 29,418,951 | 29,268,717 | 29,395,003 | ||||||||||||
Effect of dilutive restricted stock units and restricted stock | 89,605 | — | — | — | ||||||||||||
Diluted | 29,324,614 | 29,418,951 | 29,268,717 | 29,395,003 | ||||||||||||
| Net income (loss) attributable to BBGI stockholders per Class A and Class B common share – basic and diluted | $ | 0.01 | $ | (0.49 | ) | $ | (0.35 | ) | $ | (0.61 | ) | |||||
The Company excluded the effect of restrictive stock units and restricted stock under the treasury stock method when reporting a net loss as the addition of shares was anti-dilutive. As a result, the Company excluded 136,119 shares and 58,490 shares for the three months ended June 30, 2022 and 77,9082023, respectively, and 171,501 shares and 171,50157,775 shares for the six months ended June 30, 20212022 and 2022,2023, respectively.
11
BEASLEY BROADCAST GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The carrying amount of the Company’s financial instruments, including cash and cash equivalents, accounts receivable and accounts payable, approximateapproximates fair value due to the short-term nature of these financial instruments.
The estimated fair value of the Notes, based on available market information, was $295.9$174.0 million and $228.6$189.4 million as of December 31, 20212022 and June 30, 2022,2023, respectively. The Company used Level 2 measurements under the fair value measurement hierarchy to determine the estimated fair value of the Notes.
The Company currently operates three operating segments (Audio, Digital, esports) and two reportable segments (Audio, Digital). The identification of segments is consistent with how the segments report to and are managed by the Company’s Chief Executive Officer (the Company’s Chief Operating Decision Maker). The Audio segment generates revenue primarily from the sale of commercial advertising to customers of the Company’s radio stations in the following radio markets: Atlanta, GA, Augusta, GA, Boston, MA, Charlotte, NC, Detroit, MI, Fayetteville, NC, Fort Myers-Naples, FL, Las Vegas, NV, Middlesex, NJ, Monmouth, NJ, Morristown, NJ, Philadelphia, PA, Tampa-Saint Petersburg, FL, and Wilmington, DE. The Digital segment generates revenue primarily from the sale of digital advertising to customers of the Company’s radio stations and other advertisers throughout the United States. Corporate includes general and administrative expenses and certain other income and expense items not allocated to the operating segments.income (loss).
Reportable segment information for the three months ended June 30, 2023 is as follows:
| Audio |
|
| Digital |
|
| Other |
|
| Corporate |
|
| Total |
| ||||||
Net revenue |
| $ | 50,448,093 |
|
| $ | 12,301,269 |
|
| $ | 712,361 |
|
| $ | - |
|
| $ | 63,461,723 |
|
Operating expenses |
|
| 39,369,033 |
|
|
| 10,786,584 |
|
|
| 1,171,945 |
|
|
| - |
|
|
| 51,327,562 |
|
Corporate expenses |
|
| - |
|
|
| - |
|
|
| - |
|
|
| 4,405,031 |
|
|
| 4,405,031 |
|
Depreciation and amortization |
|
| 1,737,441 |
|
|
| 47,201 |
|
|
| 199,290 |
|
|
| 212,053 |
|
|
| 2,195,985 |
|
Impairment losses |
|
| 10,041,000 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 10,041,000 |
|
Operating income (loss) |
| $ | (699,381 | ) |
| $ | 1,467,484 |
|
| $ | (658,874 | ) |
| $ | (4,617,084 | ) |
| $ | (4,507,855 | ) |
| Audio |
|
| Digital |
|
| Other |
|
| Corporate |
|
| Total |
| ||||||
Capital expenditures |
| $ | 811,663 |
|
| $ | 8,777 |
|
| $ | 5,412 |
|
| $ | 21,053 |
|
| $ | 846,905 |
|
Reportable segment information for the three months ended June 30, 2022 is as follows:
Audio | Digital | Other | Corporate | Total | ||||||||||||||||
Net revenue | $ | 53,417,896 | $ | 10,719,410 | $ | 673,144 | $ | — | $ | 64,810,450 | ||||||||||
Operating expenses | 43,187,604 | 9,171,535 | 1,267,453 | — | 53,626,592 | |||||||||||||||
Corporate expenses | — | — | — | 4,567,470 | 4,567,470 | |||||||||||||||
Depreciation and amortization | 1,564,338 | 4,613 | 700,953 | 181,198 | 2,451,102 | |||||||||||||||
Impairment losses | 8,619,097 | — | — | — | 8,619,097 | |||||||||||||||
Operating income (loss) | $ | 46,857 | $ | 1,543,262 | $ | (1,295,262 | ) | $ | (4,748,668 | ) | $ | (4,453,811 | ) | |||||||
| Audio |
|
| Digital |
|
| Other |
|
| Corporate |
|
| Total |
| ||||||
Net revenue |
| $ | 53,417,896 |
|
| $ | 10,719,410 |
|
| $ | 673,144 |
|
| $ | - |
|
| $ | 64,810,450 |
|
Operating expenses |
|
| 43,187,604 |
|
|
| 9,171,535 |
|
|
| 1,267,453 |
|
|
| - |
|
|
| 53,626,592 |
|
Corporate expenses |
|
| - |
|
|
| - |
|
|
| - |
|
|
| 4,567,470 |
|
|
| 4,567,470 |
|
Depreciation and amortization |
|
| 1,564,338 |
|
|
| 4,613 |
|
|
| 700,953 |
|
|
| 181,198 |
|
|
| 2,451,102 |
|
Impairment losses |
|
| 8,619,097 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 8,619,097 |
|
Operating income (loss) |
| $ | 46,857 |
|
| $ | 1,543,262 |
|
| $ | (1,295,262 | ) |
| $ | (4,748,668 | ) |
| $ | (4,453,811 | ) |
| Audio |
|
| Digital |
|
| Other |
|
| Corporate |
|
| Total |
| ||||||
Capital expenditures |
| $ | 5,039,229 |
|
| $ | 8,982 |
|
| $ | (1,598 | ) |
| $ | 64,514 |
|
| $ | 5,111,127 |
|
12
BEASLEY BROADCAST GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Reportable segment information for the threesix months ended June 30, 20212023 is as follows:
Audio | Digital | Other | Corporate | Total | ||||||||||||||||
Net revenue | $ | 51,215,234 | $ | 7,983,343 | $ | 376,128 | $ | — | $ | 59,574,705 | ||||||||||
Operating expenses | 39,715,005 | 7,910,418 | 868,997 | — | 48,494,420 | |||||||||||||||
Corporate expenses | — | — | — | 3,957,854 | 3,957,854 | |||||||||||||||
Depreciation and amortization | 1,911,236 | 4,142 | 796,019 | 139,526 | 2,850,923 | |||||||||||||||
Other operating income, net | — | — | — | (1,500,000 | ) | (1,500,000 | ) | |||||||||||||
Operating income (loss) | $ | 9,588,993 | $ | 68,783 | $ | (1,288,888 | ) | $ | (2,597,380 | ) | $ | 5,771,508 | ||||||||
Audio | Digital | Other | Corporate | Total | ||||||||||||||||
Capital expenditures | $ | 1,276,776 | $ | 87,432 | $ | — | $ | 160,311 | $ | 1,524,519 | ||||||||||
| Audio |
|
| Digital |
|
| Other |
|
| Corporate |
|
| Total |
| ||||||
Net revenue |
| $ | 97,866,059 |
|
| $ | 22,278,054 |
|
| $ | 1,096,730 |
|
| $ | - |
|
| $ | 121,240,843 |
|
Operating expenses |
|
| 79,268,627 |
|
|
| 20,694,181 |
|
|
| 2,018,409 |
|
|
| - |
|
|
| 101,981,217 |
|
Corporate expenses |
|
| - |
|
|
| - |
|
|
| - |
|
|
| 8,888,126 |
|
|
| 8,888,126 |
|
Depreciation and amortization |
|
| 3,512,205 |
|
|
| 93,967 |
|
|
| 395,767 |
|
|
| 423,371 |
|
|
| 4,425,310 |
|
Impairment losses |
|
| 10,041,000 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 10,041,000 |
|
Operating income (loss) |
| $ | 5,044,227 |
|
| $ | 1,489,906 |
|
| $ | (1,317,446 | ) |
| $ | (9,311,497 | ) |
| $ | (4,094,810 | ) |
| Audio |
|
| Digital |
|
| Other |
|
| Corporate |
|
| Total |
| ||||||
Capital expenditures |
| $ | 1,949,777 |
|
| $ | 11,590 |
|
| $ | 25,534 |
|
| $ | 29,284 |
|
| $ | 2,016,185 |
|
Reportable segment information for the six months ended June 30, 2022 is as follows:
Audio | Digital | Other | Corporate | Total | ||||||||||||||||
Net revenue | $ | 100,783,041 | $ | 18,527,660 | $ | 1,220,017 | $ | — | $ | 120,530,718 | ||||||||||
Operating expenses | 84,050,529 | 17,573,298 | 2,012,314 | — | 103,636,141 | |||||||||||||||
Corporate expenses | — | — | — | 8,800,930 | 8,800,930 | |||||||||||||||
Depreciation and amortization | 3,186,165 | 9,077 | 1,396,301 | 375,459 | 4,967,002 | |||||||||||||||
Impairment losses | 10,476,323 | — | — | — | 10,476,323 | |||||||||||||||
Operating income (loss) | $ | 3,070,024 | $ | 945,285 | $ | (2,188,598 | ) | $ | (9,176,389 | ) | $ | (7,349,678 | ) | |||||||
| Audio |
|
| Digital |
|
| Other |
|
| Corporate |
|
| Total |
| ||||||
Net revenue |
| $ | 100,783,041 |
|
| $ | 18,527,660 |
|
| $ | 1,220,017 |
|
| $ | - |
|
| $ | 120,530,718 |
|
Operating expenses |
|
| 84,050,529 |
|
|
| 17,573,298 |
|
|
| 2,012,314 |
|
|
| - |
|
|
| 103,636,141 |
|
Corporate expenses |
|
| - |
|
|
| - |
|
|
| - |
|
|
| 8,800,930 |
|
|
| 8,800,930 |
|
Depreciation and amortization |
|
| 3,186,165 |
|
|
| 9,077 |
|
|
| 1,396,301 |
|
|
| 375,459 |
|
|
| 4,967,002 |
|
Impairment losses |
|
| 10,476,323 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 10,476,323 |
|
Operating income (loss) |
| $ | 3,070,024 |
|
| $ | 945,285 |
|
| $ | (2,188,598 | ) |
| $ | (9,176,389 | ) |
| $ | (7,349,678 | ) |
| Audio |
|
| Digital |
|
| Other |
|
| Corporate |
|
| Total |
| ||||||
Capital expenditures |
| $ | 6,221,223 |
|
| $ | 10,826 |
|
| $ | 59,084 |
|
| $ | 206,744 |
|
| $ | 6,497,877 |
|
Audio | Digital | Other | Corporate | Total | ||||||||||||||||
Net revenue | $ | 92,944,836 | $ | 13,747,071 | $ | 1,094,838 | $ | — | $ | 107,786,745 | ||||||||||
Operating expenses | 74,450,474 | 15,168,333 | 1,843,484 | — | 91,462,291 | |||||||||||||||
Corporate expenses | — | — | — | 7,863,143 | 7,863,143 | |||||||||||||||
Depreciation and amortization | 3,915,613 | 4,142 | 1,607,922 | 275,147 | 5,802,824 | |||||||||||||||
Gain on disposition | (191,988 | ) | — | — | — | (191,988 | ) | |||||||||||||
Other operating (income) expense, net | 500,000 | — | — | (900,000 | ) | (400,000 | ) | |||||||||||||
Operating income (loss) | $ | 14,270,737 | $ | (1,425,404 | ) | $ | (2,356,568 | ) | $ | (7,238,290 | ) | $ | 3,250,475 | |||||||
Audio | Digital | Other | Corporate | Total | ||||||||||||||||
Capital expenditures | $ | 1,989,721 | $ | 87,432 | $ | 2,852 | $ | 473,782 | $ | 2,553,787 | ||||||||||
Reportable segment information as of June 30, 20222023 is as follows:
Audio | Digital | Other | Corporate | Total | ||||||||||||||||
Property and equipment, net | $ | 48,624,289 | $ | 76,296 | $ | 75,224 | $ | 3,882,252 | $ | 52,658,061 | ||||||||||
FCC licenses | 503,003,909 | — | — | — | 503,003,909 | |||||||||||||||
Goodwill | 19,520,896 | — | 3,219,100 | — | 22,739,996 | |||||||||||||||
Other intangibles, net | 1,907,547 | 2,000,000 | 19,285,987 | 179,663 | 23,373,197 | |||||||||||||||
| Audio |
|
| Digital |
|
| Other |
|
| Corporate |
|
| Total |
| ||||||
Property and equipment, net |
| $ | 49,958,321 |
|
| $ | 109,274 |
|
| $ | 84,109 |
|
| $ | 3,290,829 |
|
| $ | 53,442,533 |
|
FCC licenses |
|
| 477,208,798 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 477,208,798 |
|
Goodwill |
|
| 10,582,360 |
|
|
| 922,000 |
|
|
| 1,761,100 |
|
|
| - |
|
|
| 13,265,460 |
|
Other intangibles, net |
|
| 1,774,455 |
|
|
| 913,794 |
|
|
| 4,867,985 |
|
|
| 179,663 |
|
|
| 7,735,897 |
|
Reportable segment information as of December 31, 20212022 is as follows:
| Audio |
|
| Digital |
|
| Other |
|
| Corporate |
|
| Total |
| ||||||
Property and equipment, net |
| $ | 51,941,687 |
|
| $ | 112,693 |
|
| $ | 67,751 |
|
| $ | 3,684,916 |
|
| $ | 55,807,047 |
|
FCC licenses |
|
| 487,249,798 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 487,249,798 |
|
Goodwill |
|
| 10,582,360 |
|
|
| 922,000 |
|
|
| 1,761,100 |
|
|
| - |
|
|
| 13,265,460 |
|
Other intangibles, net |
|
| 1,841,001 |
|
|
| 992,752 |
|
|
| 5,206,523 |
|
|
| 179,663 |
|
|
| 8,219,939 |
|
Audio | Digital | Other | Corporate | Total | ||||||||||||||||
Property and equipment, net | $ | 45,696,008 | $ | 74,547 | $ | 21,644 | $ | 4,050,967 | $ | 49,843,166 | ||||||||||
FCC licenses | 508,413,913 | — | — | — | 508,413,913 | |||||||||||||||
Goodwill | 25,377,447 | — | 3,219,100 | — | 28,596,547 | |||||||||||||||
Other intangibles, net | 1,974,093 | — | 20,543,451 | 179,663 | 22,697,207 | |||||||||||||||
13
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
General
We are a multi-platform media company whose primary business is operating radio stations throughout the United States. We offer local and national advertisers integrated marketing solutions across audio, digital and event platforms. We own and operate radio stations in the following radio markets: Atlanta, GA, Augusta, GA, Boston, MA, Charlotte, NC, Detroit, MI, Fayetteville, NC, Fort Myers-Naples, FL, Las Vegas, NV, Middlesex, NJ, Monmouth, NJ, Morristown, NJ, Philadelphia, PA, Tampa-Saint Petersburg, FL, and Wilmington, DE. We refer to each group of radio stations in each radio market as a market cluster. Unless the context otherwise requires, all references in this report to the “Company,” “we,” “us” or “our” are to Beasley Broadcast Group, Inc. and its subsidiaries.
Cautionary Note Regarding Forward-Looking Statements
This report contains “forward-looking statements” about the Company within the meaning of the Private Securities Litigation Reform Act of 1995, which relate to future, not past, events. All statements other than statements of historical fact included in this document are forward-looking statements. These forward-looking statements are based on the current beliefs and expectations of the Company’s management and are subject to known and unknown risks and uncertainties. Forward-looking statements, which address the Company’s expected business and financial performance and financial condition, among other matters, contain words such as: “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates,” “may,” “will,” “plans,” “projects,” “could,” “should,” “would,” “seek,” “forecast,” or other similar expressions.
Forward-looking statements, by their nature, address matters that are, to different degrees, uncertain. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. The Company undertakes no obligation to update or revise any forward-looking statements.
Forward-looking statements involve a number of risks and uncertainties, and actual results or events may differ materially from those projected or implied in those statements. Factors that could cause actual results or events to differ materially from these forward-looking statements include, but are not limited to:
14
Although we believe the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. We do not intend, and undertake no obligation, to update any forward-looking statement.
Financial Statement Presentation
The following discussion provides a brief description of certain key items that appear in our financial statements and general factors that impact these items.
Net Revenue.
Our net revenue is generally determined by the advertising rates that we are able to charge and the number of advertisements that we can broadcast without jeopardizing listener levels. Advertising rates are primarily based on the following factors:
15
Our net revenue is affected by general economic conditions, competition and our ability to improve operations at our radio market clusters. Seasonal revenue fluctuations are also common in the radio broadcasting industry and are primarily due to variations in advertising expenditures by local and national advertisers. Our revenues typically are lowest in the first calendar quarter of the year. In addition, our revenues tend to fluctuate between years, consistent with, among other things, increased advertising expenditures in even-numbered years by political candidates, political parties and special interest groups. This political spending typically is heaviest during the fourth quarter of such years.
We use trade sales agreements to reduce cash paid for operating costs and expenses by exchanging advertising airtime for goods or services; however, we endeavor to minimize trade revenue in order to maximize cash revenue from our available airtime.
We also continue to invest in digital support services to develop and promote our radio station websites, applications, and other distribution platforms. We derive revenue from our websites through the sale of advertiser promotions and advertising on our websites and the sale of advertising airtime during audio streaming of our radio stations over the internet. We also generate revenue from selling third-party digital products and services.
Operating Expenses.
Critical Accounting Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect reported amounts and related disclosures. We consider an accounting estimate to be critical if:
Market cluster | FCC broadcasting licenses | Excess | ||||||
Atlanta, GA | $ | 832,300 | 13.1 | % | ||||
Augusta, GA | 6,113,075 | 57.1 | ||||||
Boston, MA | 137,856,160 | 0.2 | ||||||
Charlotte, NC | 56,418,151 | 9.4 | ||||||
Detroit, MI | 29,978,201 | 8.2 | ||||||
Fayetteville, NC | 8,974,679 | 9.3 | ||||||
Fort Myers-Naples, FL | 9,131,300 | — | ||||||
Las Vegas, NV | 33,655,100 | — | ||||||
Middlesex, Monmouth, Morristown, NJ | 21,896,900 | 1.6 | ||||||
Philadelphia, PA | 119,674,192 | 11.2 | ||||||
Tampa-Saint Petersburg, FL | 61,787,351 | 16.7 | ||||||
Wilmington, DE | 16,686,500 | — | ||||||
Our remaining critical accounting estimates are described in Item 7 of our Annual Report on Form2021.2022. There have been no additional material changes to our critical accounting estimates during the six months ended June 30, 2022.
Recent Accounting Pronouncements
There were no recent accounting pronouncements that have or will have a material effect on our financial condition or results of operations.
Three Months Ended June 30, 20222023 Compared to the Three Months Ended June 30, 2021
The following summary table presents a comparison of our results of operations for the three months ended June 30, 20212022 and 2022,2023, with respect to certain of our key financial measures. The changes illustrated in the table are discussed in greater detail below. This section should be read in conjunction with the condensed consolidated financial statements and notes to condensed consolidated financial statements included in Item 1 of this report.
Results of Operations - Consolidated
Three Months ended June 30, | Change | |||||||||||||||
2021 | 2022 | $ | % | |||||||||||||
Net revenue | $ | 59,574,705 | $ | 64,810,450 | $ | 5,235,745 | 8.8 | % | ||||||||
Operating expenses | 48,494,420 | 53,626,592 | 5,132,172 | 10.6 | ||||||||||||
Corporate expenses | 3,957,854 | 4,567,470 | 609,616 | 15.4 | ||||||||||||
Impairment losses | — | 8,619,097 | 8,619,097 | — | ||||||||||||
Other operating income, net | 1,500,000 | — | (1,500,000 | ) | (100.0 | ) | ||||||||||
Income tax expense (benefit) | (1,299,394 | ) | 3,554,469 | 4,853,863 | 373.5 | |||||||||||
Net income (loss) | 187,694 | (14,454,717 | ) | (14,642,411 | ) | (7801.2 | ) | |||||||||
| Three Months Ended June 30, |
|
| Change |
| |||||||||||
| 2022 |
|
| 2023 |
|
| $ |
|
| % |
| |||||
Net revenue |
| $ | 64,810,450 |
|
| $ | 63,461,723 |
|
| $ | (1,348,727 | ) |
|
| (2.1 | )% |
Operating expenses |
|
| 53,626,592 |
|
|
| 51,327,562 |
|
|
| (2,299,030 | ) |
|
| (4.3 | )% |
Corporate expenses |
|
| 4,567,470 |
|
|
| 4,405,031 |
|
|
| (162,439 | ) |
|
| (3.6 | )% |
Impairment losses |
|
| 8,619,097 |
|
|
| 10,041,000 |
|
|
| 1,421,903 |
|
|
| 16.5 | % |
Income tax expense (benefit) |
|
| 3,554,469 |
|
|
| (821,836 | ) |
|
| (4,376,305 | ) |
|
| (123.1 | )% |
Net loss |
|
| 14,454,717 |
|
|
| 10,430,629 |
|
|
| (4,024,088 | ) |
|
| (27.8 | )% |
Results of Operations - Segments
Three Months ended June 30, | Change | |||||||||||||||
2021 | 2022 | $ | % | |||||||||||||
Net revenue | ||||||||||||||||
Audio | $ | 51,215,234 | $ | 53,417,896 | $ | 2,202,662 | 4.3 | % | ||||||||
Digital | 7,983,343 | 10,719,410 | 2,736,067 | 34.3 | ||||||||||||
Other | 376,128 | 673,144 | 297,016 | 79.0 | ||||||||||||
| $ | 59,574,705 | $ | 64,810,450 | $ | 5,235,745 | 8.8 | ||||||||||
Operating expenses | ||||||||||||||||
Audio | $ | 39,715,005 | $ | 43,187,604 | $ | 3,472,599 | 8.7 | % | ||||||||
Digital | 7,910,418 | 9,171,535 | 1,261,117 | 15.9 | ||||||||||||
Other | 868,997 | 1,267,453 | 398,456 | 45.9 | ||||||||||||
| $ | 48,494,420 | $ | 53,626,592 | $ | 5,132,172 | 10.6 | ||||||||||
16
| Three Months Ended June 30, |
|
| Change |
| |||||||||||
| 2022 |
|
| 2023 |
|
| $ |
|
| % |
| |||||
Net revenue |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Audio |
| $ | 53,417,896 |
|
| $ | 50,448,093 |
|
| $ | (2,969,803 | ) |
|
| (5.6 | )% |
Digital |
|
| 10,719,410 |
|
|
| 12,301,269 |
|
|
| 1,581,859 |
|
|
| 14.8 | % |
Other |
|
| 673,144 |
|
|
| 712,361 |
|
|
| 39,217 |
|
|
| 5.8 | % |
| $ | 64,810,450 |
|
| $ | 63,461,723 |
|
| $ | (1,348,727 | ) |
|
| (2.1 | )% | |
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Audio |
| $ | 43,187,604 |
|
| $ | 39,369,033 |
|
| $ | (3,818,571 | ) |
|
| (8.8 | )% |
Digital |
|
| 9,171,535 |
|
|
| 10,786,584 |
|
|
| 1,615,049 |
|
|
| 17.6 | % |
Other |
|
| 1,267,453 |
|
|
| 1,171,945 |
|
|
| (95,508 | ) |
|
| (7.5 | )% |
| $ | 53,626,592 |
|
| $ | 51,327,562 |
|
| $ | (2,299,030 | ) |
|
| (4.3 | )% | |
Net Revenue.
Operating Expenses.
Corporate Expenses.
Impairment Losses. Due to an increasethe potential sales of certain audio assets in compensation.
Income Net.
Net Income (Loss).
Six Months Ended June 30, 20222023 Compared to the Six Months Ended June 30, 2021
The following summary table presents a comparison of our results of operations for the six months ended June 30, 20212022 and 2022,2023, with respect to certain of our key financial measures. The changes illustrated in the table are discussed in greater detail below. This section should be read in conjunction with the condensed consolidated financial statements and notes to condensed consolidated financial statements included in Item 1 of this report.
Results of Operations - Consolidated
Six Months ended June 30, | Change | |||||||||||||||
2021 | 2022 | $ | % | |||||||||||||
Net revenue | $ | 107,786,745 | $ | 120,530,718 | $ | 12,743,973 | 11.8 | % | ||||||||
Operating expenses | 91,462,291 | 103,636,141 | 12,173,850 | 13.3 | ||||||||||||
Corporate expenses | 7,863,143 | 8,800,930 | 937,787 | 11.9 | ||||||||||||
Impairment losses | — | 10,476,323 | 10,476,323 | — | ||||||||||||
Other operating income, net | 400,000 | — | (400,000 | ) | (100.0 | ) | ||||||||||
Interest expense | 12,643,440 | 13,672,254 | 1,028,814 | 8.1 | ||||||||||||
Loss on extinguishment of long-term debt | 4,996,731 | — | (4,996,731 | ) | (100.0 | ) | ||||||||||
Income tax benefit | 3,902,280 | 2,621,977 | (1,280,303 | ) | (32.8 | ) | ||||||||||
Net loss | 10,496,947 | 18,045,647 | 7,548,700 | 71.9 | ||||||||||||
17
| Six Months Ended June 30, |
|
| Change |
| |||||||||||
| 2022 |
|
| 2023 |
|
| $ |
|
| % |
| |||||
Net revenue |
| $ | 120,530,718 |
|
| $ | 121,240,843 |
|
| $ | 710,125 |
|
|
| 0.6 | % |
Operating expenses |
|
| 103,636,141 |
|
|
| 101,981,217 |
|
|
| (1,654,924 | ) |
|
| (1.6 | )% |
Corporate expenses |
|
| 8,800,930 |
|
|
| 8,888,126 |
|
|
| 87,196 |
|
|
| 1.0 | % |
Impairment losses |
|
| 10,476,323 |
|
|
| 10,041,000 |
|
|
| (435,323 | ) |
|
| (4.2 | )% |
Income tax benefit |
|
| 2,621,977 |
|
|
| 2,985,819 |
|
|
| 363,842 |
|
|
| 13.9 | % |
Net loss |
|
| 18,045,647 |
|
|
| 13,967,195 |
|
|
| (4,078,452 | ) |
|
| (22.6 | )% |
Results of Operations - Segments
Six Months ended June 30, | Change | |||||||||||||||
2021 | 2022 | $ | % | |||||||||||||
Net revenue | ||||||||||||||||
Audio | $ | 92,944,836 | $ | 100,783,041 | $ | 7,838,205 | 8.4 | % | ||||||||
Digital | 13,747,071 | 18,527,660 | 4,780,589 | 34.8 | ||||||||||||
Other | 1,094,838 | 1,220,017 | 125,179 | 11.4 | ||||||||||||
| $ | 107,786,745 | $ | 120,530,718 | $ | 12,743,973 | 11.8 | ||||||||||
Operating expenses | ||||||||||||||||
Audio | $ | 74,450,474 | $ | 84,050,529 | $ | 9,600,055 | 12.9 | % | ||||||||
Digital | 15,168,333 | 17,573,298 | 2,404,965 | 15.9 | ||||||||||||
Other | 1,843,484 | 2,012,314 | 168,830 | 9.2 | ||||||||||||
| $ | 91,462,291 | $ | 103,636,141 | $ | 12,173,850 | 13.3 | ||||||||||
| Six Months Ended June 30, |
|
| Change |
| |||||||||||
| 2022 |
|
| 2023 |
|
| $ |
|
| % |
| |||||
Net revenue |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Audio |
| $ | 100,783,041 |
|
| $ | 97,866,059 |
|
| $ | (2,916,982 | ) |
|
| (2.9 | )% |
Digital |
|
| 18,527,660 |
|
|
| 22,278,054 |
|
|
| 3,750,394 |
|
|
| 20.2 | % |
Other |
|
| 1,220,017 |
|
|
| 1,096,730 |
|
|
| (123,287 | ) |
|
| (10.1 | )% |
| $ | 120,530,718 |
|
| $ | 121,240,843 |
|
| $ | 710,125 |
|
|
| 0.6 | % | |
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Audio |
| $ | 84,050,529 |
|
| $ | 79,268,627 |
|
| $ | (4,781,902 | ) |
|
| (5.7 | )% |
Digital |
|
| 17,573,298 |
|
|
| 20,694,181 |
|
|
| 3,120,883 |
|
|
| 17.8 | % |
Other |
|
| 2,012,314 |
|
|
| 2,018,409 |
|
|
| 6,095 |
|
|
| 0.3 | % |
| $ | 103,636,141 |
|
| $ | 101,981,217 |
|
| $ | (1,654,924 | ) |
|
| (1.6 | )% | |
Net Revenue.
Operating Expenses. Operating expenses increased $1.7 million during the six months ended June 30, 2023 as compared to the six months ended June 30, 2022. Audio operating expenses decreased $4.8 million during the six months ended June 30, 20222023 as compared to the six months ended June 30, 2021,2022, primarily due to continued growth in the digital segment.
Corporate Expenses.
Impairment Losses. Due to an increasethe potential sales of certain audio assets in cash compensation, contract services, and travel expenses.
Income Tax Benefit.
Net Loss.
18
Liquidity and Capital Resources
Overview.
Our board of directors has suspended future quarterly dividend payments until it is determined that resumption of dividend payments is in the best interest of the Company’s stockholders. In addition, as discussed in “Secured Notes” below, the Indenture governing our Notes limits our ability to pay dividends.
Secured Notes.
In April 2022, we repurchased $5.0 million aggregate principal amount of the Notes for an aggregate price equal to 96% of the principal amount. As a result of the repurchase, we recorded an aggregate gain on repurchase of long-term debt of $0.1 million during the second quarter of 2022. In July 2022,2023, we repurchased $2.0$3.0 million principal amount of the Notes for a price equal to 75%66% of the principal amount. Asamount and recorded a gain of $1.0 million as a result of the repurchase we recorded a gain on repurchase of long-term debt of $0.5 million during the third quarter of 2022.
From time to time, we repurchase sufficient shares of our common stock to fund withholding taxes in connection with the vesting of restricted stock units. We paid $0.1 millionapproximately $68,000 to repurchase 70,82370,318 shares during the six months ended June 30, 2022.2023. From time to time, we may seek to repurchase, redeem or otherwise retire our Notes through cash purchases and/or exchanges for equity securities, in open market purchases, privately negotiated transactions, tender offers or otherwise. Such repurchases, redemptions or other transactions, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, and other factors. The amounts involved may be material.
We expect to provide for future liquidity needs through one or a combination of the following sources of liquidity:
We believe we will have sufficient liquidity and capital resources to permit us to provide for our liquidity requirements and meet our financial obligations for the next twelve12 months and thereafter. However, poor financial results or unanticipated expenses could give rise to default under the Notes, additional debt servicing requirements or other additional financing or liquidity requirements sooner than we expect, and we may not secure financing when needed or on acceptable terms.
Off-Balance
Cash Flows
Six Months ended June 30, | ||||||||
2021 | 2022 | |||||||
Net cash provided by operating activities | $ | 4,849,026 | $ | 6,751,546 | ||||
Net cash used in investing activities | (2,191,287 | ) | (7,301,590 | ) | ||||
Net cash provided by (used in) financing activities | 33,723,920 | (4,910,152 | ) | |||||
Net increase (decrease) in cash and cash equivalents | $ | 36,381,659 | $ | (5,460,196 | ) | |||
19
| Three Months Ended June 30, |
| ||||||
| 2022 |
|
| 2023 |
| |||
Net cash provided by operating activities |
| $ | 6,751,546 |
|
| $ | 23,711 |
|
Net cash used in investing activities |
|
| (7,301,590 | ) |
|
| (2,016,185 | ) |
Net cash used in financing activities |
|
| (4,910,152 | ) |
|
| (2,051,517 | ) |
Net decrease in cash and cash equivalents |
| $ | (5,460,196 | ) |
| $ | (4,043,991 | ) |
Net Cash Provided By Operating Activities.
Net Cash Used In Investing Activities.
Net Cash Provided By (Used In)Used In Financing Activities.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not required for smaller reporting companies.
ITEM 4. CONTROLS AND PROCEDURES.
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures pursuant to Exchange Act Rule
There were no changes in our internal controlcontrols over financial reporting during the quarter ended June 30, 20222023 that have materially affected, or are reasonably likely to materially affect, our internal controlcontrols over financial reporting.
20
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
We currently and from time to time are involved in ordinary routine litigation and are the subject of threats of litigation that are incidental to the conduct of our business. These include indecency claims and related proceedings at the FCC, as well as claims and threatened claims by private third parties. However, we are not a party to any lawsuit or other proceedings, or the subject of any threatened lawsuit or other proceedings, which, in the opinion of management, is likely to have a material adverse effect on our financial condition or results of operations.
ITEM 1A. RISK FACTORS.
There have been no material changes to the risks affecting our Company as previously disclosed in Item 1A, “Risk Factors” of our annual report on Form2021.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
Repurchases of Equity Securities
The following table presents information with respect to purchases we made of our Class A common stock during the three months ended June 30, 2022.
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Program | Approximate Dollar Value of Shares That May Yet Be Purchased Under the Program | ||||||||||||
April 1 – 30, 2022 | 2,965 | $ | 1.70 | — | — | |||||||||||
May 1 – 31, 2022 | 22,430 | 1.50 | — | — | ||||||||||||
June 1 – 30, 2022 | 29,221 | 1.28 | — | — | ||||||||||||
Total | 54,616 | |||||||||||||||
Period |
| Total Number of Shares Purchased |
|
| Average Price Paid per Share |
|
| Total Number of Shares Purchased as Part of Publicly Announced Program |
|
| Approximate Dollar Value of Shares |
| ||||
April 1 – 30, 2023 |
|
| 5,930 |
|
| $ | 0.79 |
|
|
| - |
|
|
| - |
|
May 1 – 31, 2023 |
|
| 6,977 |
|
| $ | 1.05 |
|
|
| - |
|
|
| - |
|
June 1 – 30, 2023 |
|
| 29,887 |
|
| $ | 1.01 |
|
|
| - |
|
|
| - |
|
Total |
|
| 42,794 |
|
|
|
|
|
|
|
|
|
| |||
On March 27, 2007, our board of directors approved the Beasley Broadcast Group, Inc. 2007 Equity Incentive Award Plan (the “2007 Plan”). The original ten10 year term of the 2007 Plan ended on March 27, 2017. Our stockholders approved an amendment to the 2007 Plan at the Annual Meeting of Stockholders on June 8, 2017 to, among other things, extend the term of the 2007 Plan until March 27, 2027. The 2007 Plan permits us to purchase sufficient shares to fund withholding taxes in connection with the vesting of restricted stock units and shares of restricted stock.units. All shares purchased during the three months ended June 30, 20222023 were purchased to fund withholding taxes in connection with the vesting of restricted stock units.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
ITEM 5. OTHER INFORMATION.
None.
21
ITEM 6. EXHIBITS.
Exhibit Number | Description | |
31.1 | ||
31.2 | ||
32.1 | ||
32.2 | ||
101.INS | ||
XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | ||
101.SCH | ||
XBRL Taxonomy Extension Schema Document. | ||
101.CAL | ||
XBRL Taxonomy Extension Calculation Linkbase Document. | ||
101.DEF | ||
XBRL Taxonomy Extension Definition Linkbase Document. | ||
101.LAB | ||
XBRL Taxonomy Extension Label Linkbase Document. | ||
101.PRE | ||
XBRL Taxonomy Extension Presentation Linkbase Document. | ||
104 | ||
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). |
22
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
BEASLEY BROADCAST GROUP, INC. | ||||||
Dated: August | /s/ Caroline Beasley | |||||
Name: Caroline Beasley | ||||||
Title: Chief Executive Officer (principal executive officer) | ||||||
Dated: August | /s/ Marie Tedesco | |||||
Name: Marie Tedesco | ||||||
Title: Chief Financial Officer (principal financial and accounting officer) | ||||||
23