BBGI - Earnings call transcript Q4 2017 | Beasley Broadcast Group, Inc.

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Operator

Good morning and welcome to Beasley Broadcast Group’s Fourth Quarter 2017 Conference.

Before proceeding, I would like to emphasize that today's conference and the webcast will contain forward-looking statements about our future performance and results of operations that involve risks and uncertainties described in the Risk Factors section of our most recent Annual Report on Form 10-K and supplemented by our quarterly reports on 10-Q. Today's webcast will also contain a discussion of certain non-GAAP financial measures within the meaning of Item 10 of Regulation S-K. A reconciliation of these non-GAAP measures with their most directly comparable financial measures calculated and presented in accordance with GAAP can be found in this morning's news announcement and on the Company's website. I would also like to remind listeners that following its completion, a replay of today's call can be accessed for five days on the Company's website www.bbgi.com.You can also find a copy of today's press release on the Investors or Press Room section of the site. it’s host, to Caroline Beasley time, over the Beasley. this the to Broadcast at my turn pleasure conference And Group's CEO, Please go ahead.

Caroline Beasley

us today. Marie Tedesco, good you CFO is quarter and everyone. call our full to with the joining me and results. you, fourth review operating Thank year on our morning, for Thank

divestiture four closing Media’s transaction. XXXX The As a results our quarter the Greater fourth of last reflect the and of cluster. of the Charlotte Bern-Jacksonville reminder, also Magic cash includes This on XXth the we $X November stations debt. the Boston January X, million It asset funded XXXX. XXXX Greenville-New of payment, divestiture swap December for whereby exchanged was transaction of $XX additional million Hub the a which, included Sports with the May

Beasley diversifies radio The cluster music revenue the is heritage formatted for The at marquee content The as teams. ownership unique these our spoken to further for that and include rights includes The BZ original. Patriots, Celtics broadcast swap market flagship is words and with Bruins a Our from station

the Mazz result, And am in forefront & signed recently are pleased with in Zolak agreement report the Felger. at Felger & nationally talent including, afternoons. a As with morning, in this Rich and mid-days, that Beasley Betrand in recognized personalities the we and market Toucher to I a multiyear

we swap, revenue this XX million we with $XXX we in stations years owned XXX $XXX fourth facility and these revenue. ago, credit rate our quarter, $XXX million the at at Reflecting operated on XX time, XXth, refinanced we XX the to Two loan and of term approximately end annual million a forma pro transactions successfully and XXXX. XXXX points. and generated of the addition with station we In in basis the in interest stations November reduced operated markets owned

and results this for in manner to positioned have leverage from accretive integration us over with been these accomplished solid platform our Our and period impact limited the transactions growth has results in an XXXX.

with and going host of and in a items is our a XXXX looking for quarters the few to Now into and recent quarter fourth the activities, there those are dive XXXX net Marie just financing fourth transaction operating income that minutes. and impacted at whole

As Greater November mentioned ago, a XXXX. minutes transaction the closed few X, Media

those to also mega So this we of months XXXX, quarter only in revenue we XXXX, a when in Boston quarter standstill. excluding was full an XXXX political. as comps quarter quarter quarter, indicated revenue political mid-to the three revenue fourth On fourth had merger quarterly closing the market at down placement in On months. two compared call fourth high-single-digits in of and the to benefit fourth the the stations basis, – on in at XXXX declined was related virtually and anticipated and i.e. in forma that the reflect of operating would fourth in pro last place be October, at of our Entercom/CBS flat and

the to excluding forma this due pro political, basis, X.X% we down is market Boston a and on were primarily issues. However,

Marie is am I a she into over going Now dive turn take financials. going to deep to the it and to

Marie Tedesco

Thanks, Caroline.

expenses net X% displayed on political asset Reflecting revenue expenses QX The forma expenses increased stations, compared of pleased XXXX, – forma in revenue million in $X.X SOI both revenue approximately or million for recur was a year-over-year. is the is operating swap and and $X.X asset corporate declined our the expansion swap or result decline. revenue reflects or this $X.X in results, On an of year-over-year the expenses to as with the reflecting year-over-year million Media X.X% more we'll pro Corporate quarter reviewed, revenue XX% the fourth to to expenses. risen operating million including income two did and $X.X million XXXX. G&A $X.X station X.X down rise to declined Pro Greater million. by XX% approximately quarter basis, operating that the from or ago were SOI report well or $X in a that million revenue primarily some period. a of remain or on basis. X.X% year of If review quarter a forma as million million Let's not XX.X% pro X.X% in expanded XXXX, basis; the increased increase station at fourth actual a from quarter the the after political January QX am in Greater than relatively resulting pro during our would offset million I direct on sheet XX% for compared political balance $X.X quarter contribution Pro decline the quarter a to scale increased in reduced fourth which margin XXXX forma staff. in a review the $X.X start flat of items. $XX million. million, X.X% quarter, with to SOI the operating and as X, $XX.X forma $X.X decline excluding is months which fourth have transaction XX.X%, accounting Caroline quarter our QX the transaction, in $X.X our Media full XXXX,

quarter XXX,XXX. In addition, XX,XXX to increased for the stock-based compensation

million merger fourth up statement, this both and gain There $XXX,XXX were As year. there you in down last income and expenses $X.X on quarter. a million in fourth last look transaction year quarter year’s period, the was $XX.X

this $XX XXXX, And last in $X an year loss recorded with gain last quarter. to of both long-term million this in of and income a $XXX,XXX million in statement on fourth year’s debt we fourth year, the exchange have related quarter assets in compared modification hitting in recorded also quarter. approximately We

tax outstanding any the transaction. to to settled XX, XXXX. credit XX%, refinancing of tax We $X million free recurring last taxes million, was and flow we rate and $XX.X in quarter of XXXX. expense to Total recently significant increased increase fourth Reflecting of the WBZ $XXX the and for a year to full in million adjustments capital benefit September Federal facility December paid quarter. our the completed a Job total are the XX% approximately Greater XXXX XX, as approximately fourth in was our and cash Also, during reflecting will to transaction, year-over-year cash don’t interest year-over-year working enactment compared $XXX the the the due Act at the material Finally, million deferred Media from borrowings debt adjustments. the $X.X there of related further Tax now year’s Cuts result Media and Greater million expect tower $XXX,XXX with reduction benefit of

to consolidated of X.XX September defined in compares operating XX/XX/XXXX. flow, This agreement times LTM a XX, times cash the as was ratio credit of resulting of as Our XXXX. $XX.X as million leverage X.XX in

of of leverage credit times Our the receive sheet calculating at We of agreement a that allows X.XX hand the was net cash $XX.X million. hand with leverage $XX covenant total times ended cash, net up XXXX to leverage, on to at time. cash of year back with increase December on in in benefits company our stations X.XX reflecting expenses capital maximum with XX, the million our compared expenses $X.X the a Caroline. spent capital the to that, the company will to turn of November I it was in from year to direct And QX in XXXX CapEx Full million XXXX. Greater XXXX, $X.X and million in compared result addition $X.X XXXX. Media million, The of is $XXX,XXX with QX in balance

Caroline Beasley

and to prove quarter year of that podcasts. we platform Hub both fourth brands our forward. successful believe Thanks, Amazon concluded acquisition Alexa these for results And quarter due the Beasley enabled I active initiative with lack that the earnings am the Marie. political featuring The in exciting report I an of even the of quarter was our with the live our going it we for facility. have credit happy previous On both to Sports Alexa’s to of successful are our and our company a refi fourth and now streams be the beneficial comps XX events on mentioned call, and will top

are will our expenses, our cluster today, be reducing Boston integrating shareholders. into and priorities of QX returning managing up pacings focus revenue deeper our WBZ and leverage in to looking As on XXXX, capital into strategic on further streams, slightly our our revenue and of diversifying

business. We other also intend investments to our additional structuring are and completing remain identifying, opportunistic and strategic about to areas complementary that acquisitions accretive in

investors believe forma and for free in with ourselves grow at And ready capital this be can report achieve our cash this will of the focus, day, not the same-station the ability structure accretion because free results we criteria. end more cash are provided experience or flow our appropriate will flow. We we given results year, interested pro we like to

about We are very our excited future. company’s

experience agnostic the launch our our and apps distribution in access regard, core in two do. to content content is We focus our second platform any entertaining monetize better brands. programming while plan and In time is opportunities delivering incorporating to are by of becoming strategy to the more and Phase Beasley everything with core this we and entertainment emphasis providing podcast our original our content, company quarter and philosophy mobile to company local a enhanced own on which in with best we on to more of delivering any in create device, at a addition, listener our strong local

continues on In several radio to a that analytics consume watch reach Data target smartphones ROI to We to result, people or advertisers information. combination in are to our early and also marketing continues are than successes be very closing, deliver for the of on platform attribution proud a very be radio listen leverage products a their and radio data audiences. more as to we business. weekly to show algorithms a excited valuable about TV content that AI, basis, better with

quarter communities are news In being listeners, a were in shooting serve are to experienced to tragic trustworthy to information our and Vegas providing our as weather lifeline and safety advertisers news, communities, entertainment, the great community our teams and Las news critical with the we and honored local in following our fourth our October information this critical, the Xst medium, and of information. times we in crisis. We in addition

on the So corporate behalf today. thank station and on call for to much participating employees, you our like very I’d of

I to Now over turn to going back received. we’ve it review to because she that Marie, some going questions am is

Marie Tedesco

questions few receive to of I them then Thanks, first and Caroline. handle I We over it and will hand will the did a few Caroline.

First weaker? to quarter Services going any Looking have to why results were don’t segments in at additional fourth corporate XXXX? doubling company, what much fourth So, we expect corporate expenses auto is did some Consumer staff. expense have our increases are we stronger in we fourth also political significant throughout up quarter, our in going million What our up for We expect quarter, political is, The both and and increased retail. but do segments a us we compared so in our few were question that were forward. weaker XXXX, outlook revenues XXXX. in in

tax state taxes. our Next what is So, to question is tax XXXX for XX% is going effective rate effective overall, for includes be about rate XXXX? your that

a tax federal rate XX% rate. be XX%, then state reform with all-in got we’ve to will and for So, prior XX% compares an taxes. the tax effective tax This remaining approximately

So, a significant decrease.

especially standstill Has we be saw in So, you Sports National at local also Hub if was at recovered to Bowl, the the first in the that hovering pacing to down. Super Boston Patriots is seems a that mentioned that will. fourth own its quarter. quarter? and drive given You

cluster So questions. we continue the concludes that that to Caroline. Thanks, closely. be watching And

Caroline Beasley

Okay, thank you.

today Have follow-up any like and week. again if participating call free you feel or a we you great and to questions, have a to Thank you. Marie day So, all thank myself. please great for

End of Q&A

today’s like and conference. us that to thank joining for would ladies gentlemen, once everyone And conclude does today. I again Again,

Caroline Beasley	Chief Executive Officer
Marie Tedesco	Chief Financial Officer

Beasley Broadcast (BBGI) 12 Feb 182017 Q4 Earnings call transcript