Beasley Broadcast (BBGI) 10-Q 2023 Q1 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM

10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2023

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period fromto

Commission File Number

000-29253

BEASLEY BROADCAST GROUP, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	65-0960915
(State of or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

3033 Riviera Drive, Suite 200

Naples, Florida 34103

(Address of Principal Executive Offices and Zip Code)

(239)

263-5000

(Registrant’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

S-T

(§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

non-accelerated

filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule

12b-2

of the Exchange Act.

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

12b-2

of the Exchange Act).    Yes  ☐    No  ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class A Common Stock, $0.001 par value, 13,183,354 Shares Outstanding as of April 

20

, 2023

Class B Common Stock, $0.001 par value, 16,662,743 Shares Outstanding as of

April 20, 2023

INDEX

		Page No.
PART I
FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements		3
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		11
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		15
Item 4.	Controls and Procedures		16
PART II
OTHER INFORMATION
Item 1.	Legal Proceedings		17
Item 1A.	Risk Factors		17
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		17
Item 3.	Defaults Upon Senior Securities		17
Item 4.	Mine Safety Disclosures		17
Item 5.	Other Information		17
Item 6.	Exhibits		18
SIGNATURES			19

BEASLEY BROADCAST GROUP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

	December 31,			March 31,
	2022			2023
ASSETS
Current assets:
Cash and cash equivalents	$	39,534,653		$	35,894,663
Accounts receivable, less allowance for credit losses of $ 1,876,751 in 2022 and $1,740,162 in 2023		56,683,526			47,487,802
Prepaid expenses		5,078,231			5,344,980
Other current assets		4,364,120			3,380,589
Total current assets		105,660,530			92,108,034
Property and equipment, net		55,807,047			54,605,751
Operating lease right-of-use assets		38,478,756			36,623,847
Finance lease right-of-use assets		306,667			303,333
FCC licenses		487,249,798			487,249,798
Goodwill		13,265,460			13,265,460
Other intangibles, net		8,219,939			7,977,918
Other assets		5,955,158			5,994,261
Total assets	$	714,943,355		$	698,128,402
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	19,344,621		$	15,631,581
Operating lease liabilities		8,166,394			8,140,640
Other current liabilities		29,183,630			27,249,726
Total current liabilities		56,694,645			51,021,947
Due to related parties		85,731			78,053
Long-term debt, net of unamortized debt issuance costs		285,472,107			285,839,233
Operating lease liabilities		37,485,602			35,538,596
Deferred tax liabilities		98,068,981			95,904,862
Other long-term liabilities		13,647,481			9,644,746
Total liabilities		491,454,547			478,027,437
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 issued and 13,113,659 outstanding in 2022; 16,846,376 issued and 13,169,284 outstanding in 2023		16,761			16,844
Class B common stock, $0.001 par value; 75,000,000 shares authorized; 16,662,743 issued and outstanding in 2022 and 2023		16,662			16,662
Additional paid-in capital		151,948,310			152,122,495
Treasury stock, Class A common stock; 3,649,568 shares in 2022; 3,677,092 shares in 2023		(29,155,300	)		(29,180,845	)
Retained earnings		100,163,064			96,626,498
Accumulated other comprehensive income		499,311			499,311
Total stockholders’ equity		223,488,808			220,100,965
Total liabilities and stockholders’ equity	$	714,943,355		$	698,128,402

3

BEASLEY BROADCAST GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)

	Three Months Ended March 31,
	2022			2023
Net revenue	$	55,720,268		$	57,779,120
Operating expenses:
Operating expenses (including stock-based compensation of $78,223 in 2022 and $32,804 in 2023 and excluding depreciation and amortization shown separately below)		49,830,436			50,653,655
Corporate expenses (including stock-based compensation of $149,027 in 2022 and $141,464 in 2023)		4,233,460			4,483,095
Depreciation and amortization		2,515,900			2,229,325
Impairment loss		1,857,226			—
Total operating expenses		58,437,022			57,366,075
Operating income (loss)		(2,716,754	)		413,045
Non-operating income (expense):
Interest expense		(6,849,037	)		(6,593,852	)
Other income, net		872			540,515
Loss before income taxes		(9,564,919	)		(5,640,292	)
Income tax benefit		(5,849,318	)		(2,163,983	)
Loss before equity in earnings of unconsolidated affiliates		(3,715,601	)		(3,476,309	)
Equity in earnings of unconsolidated affiliates, net of tax		(23,344	)		(60,257	)
Net loss		(3,738,945	)		(3,536,566	)
Net loss per Class A and Class B common share:
Basic and diluted	$	(0.13	)	$	(0.12	)
Weighted average shares outstanding:
Basic and diluted		29,370,789			29,785,759

4

BEASLEY BROADCAST GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	Three Months Ended March 31,
	2022			2023
Cash flows from operating activities:
Net loss	$	(3,738,945	)	$	(3,536,566	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Stock-based compensation		227,250			174,268
Provision for credit losses		77,498			230,692
Depreciation and amortization		2,515,900			2,229,325
Impairment loss		1,857,226			—
Amortization of loan fees		380,211			367,126
Deferred income taxes		(5,849,318	)		(2,163,983	)
Equity in earnings of unconsolidated affiliates		23,344			60,257
Change in operating assets and liabilities:
Accounts receivable		11,188,519			8,965,032
Prepaid expenses		213,359			(266,749	)
Other assets		570,082			1,049,212
Accounts payable		361,375			(3,713,040	)
Other liabilities		(7,069,648	)		(6,062,782	)
Other operating activities		(21,479	)		222,043
Net cash provided by (used in) operating activities		735,374			(2,445,165	)
Cash flows from investing activities:
Capital expenditures		(1,375,775	)		(1,169,280	)
Net cash used in investing activities		(1,375,775	)		(1,169,280	)
Cash flows from financing activities:
Reduction of finance lease liabilities		(1,945	)		—
Purchase of treasury stock		(29,599	)		(25,545	)
Net cash used in financing activities		(31,544	)		(25,545	)
Net decrease in cash and cash equivalents		(671,945	)		(3,639,990	)
Cash and cash equivalents at beginning of period		51,378,642			39,534,653
Cash and cash equivalents at end of period	$	50,706,697		$	35,894,663
Cash paid for interest	$	12,937,576		$	12,506,445
Cash paid for income taxes	$	61,000		$	21,491

5

BEASLEY BROADCAST GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(1) Interim Financial Statements

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 Form

10-K

for the year ended December 31, 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

10-Q

and Article 10 of Regulation

S-X.

Accordingly, they do not include all of the information and footnotes required by GAAP for comp

lete

financial statements. In the opinion of management, the financial statements reflect all adjustments necessary for a fair statement of the financial position and results of operations for the interim periods presented, and all such adjustments are of a normal and recurring nature. The Company’s results are subject to seasonal fluctu

ations, ther

efore the results shown on an interim basis are not necessarily indicative of results for the full

year

.

(2) Summary of Significant Accounting Policies

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 March 31,
	2022			2023
Beginning balance	$	1,720,477		$	1,876,751
Provision for credit losses		77,498			230,692
Deductions		(287,553	)		(367,281	)
Ending balance	$	1,510,422		$	1,740,162

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.

6

BEASLEY BROADCAST GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(3) Disposition

On April 1, 2022, the Company completed the sale of substantially all of the assets used in the operations of

WWNN-AM

in West Palm Beach-Boca Raton, FL to a third party for $1.25 million in cash. As a result of the sale, the Company recorded an impairment loss of $1.9 million related to the FCC license during the first quarter of 2022.

(4) Long-Term Debt

Long-term debt is comprised of the following:

	December 31,			March 31,
	2022			2023
Secured notes	$	290,000,000		$	290,000,000
Less unamortized debt issuance costs		(4,527,893	)		(4,160,767	)
	$	285,472,107		$	285,839,233

On February 2, 2021, the Company issued $300.0 million aggregate principal amount of 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 of 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 owned subsidiaries and are guaranteed jointly and severally by the Company and its majority 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 liens; enter into agreements restricting certain subsidiaries’ ability to pay dividends or make other intercompany transfers; consolidate, merge, sell or otherwise dispose of all or substantially all of its assets; enter into transactions with affiliates; prepay certain kinds of indebtedness; and issue or sell stock of its subsidiaries. Prior to February 1, 2025, the Company will be subject to certain premiums, as defined in the Indenture, for optional or mandatory (upon certain contingent events) redemption of some or all of the Note

s

.

(5) Stockholders’ Equity

The changes in stockholders’ equity are as follows:

	Three months ended March 31,
	2022			2023
Beginning balance	$	263,082,298		$	223,488,808
Stock-based compensation		227,250			174,268
Purchase of treasury stock		(29,599	)		(25,545	)
Net loss		(3,738,945	)		(3,536,566	)
Ending balance	$	259,541,004		$	220,100,965

(6) Net Revenue

Net revenue is comprised of the following:

	Three months ended March 31,
	2022		2023
Audio	$	47,365,145	$	47,417,966
Digital		7,808,250		9,976,785
Other		546,873		384,369
	$	55,720,268	$	57,779,120

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

7

BEASLEY BROADCAST GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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. Substantially all deferred revenue is recognized within 12 months of the payment date.

	December 31,		March 31,
	2022		2023
Deferred revenue	$	4,696,989	$	4,890,338

Audio revenue includes revenue from the sale or trade of aired commercial spots to advertisers directly or through national 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,		March 31,
	2022		2023
Trade sales receivable	$	1,564,054	$	1,752,566
Trade sales payable		806,162		806,640

	Three months ended March 31,
	2022		2023
Trade sales revenue	$	1,372,573	$	1,380,842

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. The Company assesses each digital order to determine if the Company is operating as the principal or an agent. In general, the Company operates as the principal, however, after the acquisition of Guarantee Digital, LLC in 2022, the Company determined that it is operating as an agent for one advertiser.

(7) Stock-Based Compensation

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 January 1, 2023		1,084,818		$	1.87
Granted		54,348			0.92
Vested		(83,149	)		2.32
Forfeited		(6,667	)		2.36
Unvested as of March 31, 2023		1,049,350		$	1.78

8

BEASLEY BROADCAST GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

As of March 31, 2023, there was $1.2 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 2.3 years.

(8) Income Taxes

The Company’s effective tax rate was (61)% and (38)% for the three months ended March 31, 2022 and 2023, respectively. These rates differ from the federal statutory rate of 21% due to the effect of state income taxes, certain

non-taxable

income, and certain expenses that are not deductible for tax purposes.

(9) Earnings Per Share

Earnings per share calculation information is as follows:

	Three months ended March 31,
	2022			2023
Net loss	$	(3,738,945	)	$	(3,536,566	)
Weighted-average shares outstanding:
Basic		29,370,789			29,785,759
Effect of dilutive restricted stock units and restricted stock		—			—
Diluted		29,370,789			29,785,759
Net loss per Class A and Class B common share – basic and diluted	$	(0.13	)	$	(0.12	)

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. The number of shares excluded was 178,625 and 123,738 for the three months ended March 31, 2022 and 2023, respectively.

(10) Financial Instruments

The carrying amount of the Company’s financial instruments, including cash and cash equivalents, accounts receivable and accounts payable, approximates 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 $174.0 million and $191.4 million as of December 31, 2022 and March 31, 2023, respectively. The Company used Level 2 measurements under the fair value measurement hierarchy to determine the estimated fair value of the Notes.

(11) Segment Information

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 stations in the following 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 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.

Non-operating

corporate items including interest expense and income taxes, are reported in the accompanying condensed consolidated statements of comprehensive loss.

Reportable segment information for the three months ended March 31, 2023 is as follows:

	Audio		Digital		Other			Corporate			Total
Net revenue	$	47,417,966	$	9,976,785	$	384,369		$	—		$	57,779,120
Operating expenses		39,899,594		9,907,597		846,464			—			50,653,655
Corporate expenses		—		—		—			4,483,095			4,483,095
Depreciation and amortization		1,774,764		46,766		196,477			211,318			2,229,325
Operating income (loss)	$	5,743,608	$	22,422	$	(658,572	)	$	(4,694,413	)	$	413,045

9

BEASLEY BROADCAST GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

	Audio		Digital		Other		Corporate		Total
Capital expenditures	$	1,138,114	$	2,813	$	20,122	$	8,231	$	1,169,280

Reportable segment information for the three months ended March 31, 2022 is as follows:

	Audio		Digital			Other			Corporate			Total
Net revenue	$	47,365,145	$	7,808,250		$	546,873		$	—		$	55,720,268
Operating expenses		40,683,812		8,401,763			744,861			—			49,830,436
Corporate expenses		—		—			—			4,233,460			4,233,460
Depreciation and amortization		1,621,827		4,464			695,348			194,261			2,515,900
Impairment loss		1,857,226		—			—			—			1,857,226
Operating income (loss)	$	3,202,280	$	(597,977	)	$	(893,336	)	$	(4,427,721	)	$	(2,716,754	)

	Audio		Digital		Other		Corporate		Total
Capital expenditures	$	1,181,994	$	1,844	$	60,682	$	142,230	$	1,386,750

Reportable segment information as of March 31, 2023 is as follows:

	Audio		Digital		Other		Corporate		Total
Property and equipment, net	$	50,931,567	$	108,219	$	84,136	$	3,481,829	$	54,605,751
FCC licenses		487,249,798		—		—		—		487,249,798
Goodwill		10,582,360		922,000		1,761,100		—		13,265,460
Other intangibles, net		1,807,728		953,273		5,037,254		179,663		7,977,918

Reportable segment information as of December 31, 2022 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

10

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 stations in the following 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 stations in each 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:

• the effects of the COVID-19 pandemic, including its potential effects on the economic environment and the Company’s results of operations, liquidity and financial condition, and the increased risk of impairments of the Company’s Federal Communications Commission (“FCC”) licenses and/or goodwill;

• external economic forces and conditions that could have a material adverse impact on the Company’s advertising revenues and results of operations;

• the ability of the Company’s stations to compete effectively in their respective markets for advertising revenues;

• the ability of the Company to develop compelling and differentiated digital content, products and services;

• audience acceptance of the Company’s content, particularly its audio programs;

• the ability of the Company to respond to changes in technology, standards and services that affect the audio industry;

• the Company’s dependence on federally issued licenses subject to extensive federal regulation;

• actions by the FCC or new legislation affecting the audio industry;

• increases to royalties the Company pays to copyright owners or the adoption of legislation requiring royalties to be paid to record labels and recording artists;

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• the Company’s dependence on selected market clusters of stations for a material portion of its net revenue;

• credit risk on the Company’s accounts receivable;

• the risk that the Company’s FCC licenses and/or goodwill could become impaired;

• the Company’s substantial debt levels and the potential effect of restrictive debt covenants on the Company’s operational flexibility and ability to pay dividends;

• the potential effects of hurricanes on the Company’s corporate offices and stations;

• the failure or destruction of the internet, satellite systems and transmitter facilities that the Company depends upon to distribute its programming;

• disruptions or security breaches of the Company’s information technology infrastructure and information systems;

• the loss of key personnel;

• the Company’s ability to integrate acquired businesses and achieve fully the strategic and financial objectives related thereto and their impact on the Company’s financial condition and results of operations;

• the fact that the Company is controlled by the Beasley family, which creates difficulties for any attempt to gain control of the Company; and

• other economic, business, competitive, and regulatory factors affecting the businesses of the Company, including those set forth in the Company’s filings with the SEC.

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 primarily derived from the sale of commercial spots to advertisers directly or through national, regional or local advertising agencies. Revenues are reported at the amount we expect to be entitled to receive under the contract. Local revenue generally consists of commercial advertising sales, digital advertising sales and other sales to advertisers in a station’s local market, either directly to the advertiser or through the advertiser’s agency. National revenue generally consists of commercial advertising sales through advertiser agencies. National advertiser agencies generally purchase advertising for multiple markets. National sales are generally facilitated by our national representation firm, which serves as our agent in these transactions.

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:

• a station’s audience share in the demographic groups targeted by advertisers as measured principally by periodic reports issued by Nielsen Audio;

• the number of stations, as well as other forms of media, in the market competing for the attention of the same demographic groups;

• the supply of, and demand for, radio advertising time; and

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• the size of the market.

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 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 stations over the internet. We also generate revenue from selling third-party digital products and services.

Operating Expenses. Our operating expenses consist primarily of programming, engineering, sales, advertising and promotion, and general and administrative expenses incurred at our stations. We strive to control our operating expenses by centralizing certain functions at our corporate offices and consolidating certain functions in each of our market clusters.

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:

• it involves a significant level of estimation uncertainty; and

• changes in the estimate or different estimates that could have been selected have had or are reasonably likely to have a material impact on our results of operations or financial condition.

Our critical accounting estimates are described in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022. There have been no additional material changes to our critical accounting estimates during the three months ended March 31, 2023.

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 March 31, 2023 Compared to the Three Months Ended March 31, 2022

The following summary table presents a comparison of our results of operations for the three months ended March 31, 2022 and 2023, with respect to certain of our key financial measures. These 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 March 31,				Change
	2022		2023		$			%
Net revenue	$	55,720,268	$	57,779,120	$	2,058,852			3.7	%
Operating expenses		49,830,436		50,653,655		823,219			1.7
Corporate expenses		4,233,460		4,483,095		249,635			5.9
Impairment loss		1,857,226		—		(1,857,226	)		(100.0	)
Income tax benefit		5,849,318		2,163,983		(3,685,335	)		(63.0	)
Net loss		3,738,945		3,536,566		(202,379	)		(5.4	)

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Results of Operations - Segments

	Three Months ended March 31,				Change
	2022		2023		$			%
Net revenue
Audio	$	47,365,145	$	47,417,966	$	52,821			0.1	%
Digital		7,808,250		9,976,785		2,168,535			27.8
Other		546,873		384,369		(162,504	)		(29.7	)
	$55,720,268		$57,779,120		$2,058,852			3.7
Operating expenses
Audio	$	40,683,812	$	39,899,594	$	(784,218	)		(1.9	)%
Digital		8,401,763		9,907,597		1,505,834			17.9
Other		744,861		846,464		101,603			13.6
	$49,830,436		$50,653,655		$ 823,219			1.7

Net Revenue. Net revenue increased $2.1 million during the three months ended March 31, 2023 as compared to the three months ended March 31, 2022. Digital revenue increased $2.2 million during the three months ended March 31, 2023 as compared to the three months ended March 31, 2022, primarily due to continued growth in the digital segment.

Operating Expenses. Operating expenses increased $0.8 million during the three months ended March 31, 2023 as compared to the three months ended March 31, 2022. Digital operating expenses increased $1.5 million during the three months ended March 31, 2023 as compared to the three months ended March 31, 2022, primarily due to continued investment in the digital segment.

Corporate Expenses. Corporate expenses increased $0.2 million during the three months ended March 31, 2023 as compared to the three months ended March 31, 2022, primarily due to an increase in contract services.

Impairment Loss. On April 1, 2022, we completed the sale of substantially all of the assets used in the operations of WWNN-AM in West Palm Beach-Boca Raton, FL to a third party for $1.25 million in cash. As a result of the sale, we recorded an impairment loss of $1.9 million related to the FCC license during the first quarter of 2022.

Income Tax Benefit. Our effective tax rate was approximately (61)% and (38)% for the three months ended March 31, 2022 and 2023, respectively. These rates differ from the federal statutory rate of 21% due to the effect of state income taxes, certain non-taxable income, and certain expenses that are not deductible for tax purposes.

Net Loss. Net loss for the three months ended March 31, 2023 was $3.5 million compared to a net loss of $3.7 million for the three months ended March 31, 2022, as a result of the factors described above.

Liquidity and Capital Resources

Overview. Our primary sources of liquidity is internally generated cash flow and cash on hand. Our primary liquidity needs have been, and for the next 12 months and thereafter are expected to continue to be, for working capital, debt service, and other general corporate purposes, including capital expenditures and station acquisitions. Historically, our capital expenditures have not been significant. In addition to property and equipment associated with station acquisitions, our capital expenditures have generally been, and are expected to continue to be, related to the maintenance of our office and studio space, the maintenance of our towers and equipment, and digital products and information technology. We have also purchased or constructed office and studio space in some of our markets to facilitate the consolidation of our operations.

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.

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Secured Notes. On February 2, 2021, we issued $300.0 million aggregate principal amount of 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 of 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 owned subsidiaries and are guaranteed jointly and severally by the Company and its majority 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 liens; enter into agreements restricting certain subsidiaries’ ability to pay dividends or make other intercompany transfers; consolidate, merge, sell or otherwise dispose of all or substantially all of our assets; enter into transactions with affiliates; prepay certain kinds of indebtedness; and issue or sell stock of our subsidiaries.

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 and shares of restricted stock. We paid approximately $26,000 to repurchase 27,524 shares during the three months ended March 31, 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:

• internally generated cash flow;

• additional borrowings or notes offerings, to the extent permitted under the Indenture governing our Notes; and

• additional equity offerings.

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 twelve 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 Sheet Arrangements. We did not have any off-balance sheet arrangements as of March 31, 2023.

Cash Flows. The following summary table presents a comparison of our cash flows for the three months ended March 31, 2022 and 2023 with respect to certain of our key measures affecting our liquidity. The changes set forth 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 the condensed consolidated financial statements included in Item 1 of this report.

	Three Months ended March 31,
	2022			2023
Net cash provided by (used in) operating activities	$	735,374		$	(2,445,165	)
Net cash used in investing activities		(1,375,775	)		(1,169,280	)
Net cash used in financing activities		(31,544	)		(25,545	)
Net decrease in cash and cash equivalents	$	(671,945	)	$	(3,639,990	)

Net Cash Provided By (Used In) Operating Activities. Net cash used in operating activities was $2.4 million during the three months ended March 31, 2023, as compared to net cash provided by operating activities of $0.7 million during the three months ended March 31, 2022. The $3.2 million change in net cash provided by (used in) operating activities was primarily due to a $3.8 million increase in cash paid for operating expenses, partially offset by a $0.4 million decrease in interest payments.

Net Cash Used In Investing Activities. Net cash used in investing activities during the three months ended March 31, 2023 included payments of $1.2 million for capital expenditures. Net cash used in investing activities for the same period in 2022 included payments of $1.4 million for capital expenditures.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not required for smaller reporting companies.

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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 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective as of the end of the period covered by this report.

There were no changes in our internal control over financial reporting during the quarter ended March 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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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 Form 10-K for the year ended December 31, 2022.

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 March 31, 2023.

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
January 1 – 31, 2023		7,677	$	1.13		—		—
February 1 – 28, 2023		—		—		—		—
March 1 – 31, 2023		19,847	$	0.85		—		—
Total		27,524

On March 27, 2007, our board of directors approved the Beasley Broadcast Group, Inc. 2007 Equity Incentive Award Plan (the “2007 Plan”). The original ten-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. All shares purchased during the three months ended March 31, 2023 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.

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ITEM 6. EXHIBITS.

Exhibit Number	Description
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) (17 CFR 240.15d-14(a)).
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) (17 CFR 240.15d-14(a)).
32.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(b)/15d-14(b) (17 CFR 240.15d-14(b)) and 18 U.S.C. Section 1350.
32.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(b)/15d-14(b) (17 CFR 240.15d-14(b)) and 18 U.S.C. Section 1350.
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)

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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: April 27, 2023	/s/ Caroline Beasley
	Name: Caroline Beasley
	Title:   Chief Executive Officer (principal executive officer)
Dated: April 27, 2023	/s/ Marie Tedesco
	Name: Marie Tedesco
	Title:   Chief Financial Officer (principal financial and accounting officer)

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