BBGI - Earnings call transcript Q3 2018 | Beasley Broadcast Group, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning and welcome to Beasley Broadcast Group's Third Quarter 2018 Conference Call.

Before proceeding, I would like to emphasize that today's conference call and 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 as supplemented by our Quarterly Reports on Form 10-Q. Today's webcast will also contain a discussion of certain non-GAAP financial measures within the meaning of Item 10 on 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 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.

a Press today's site. Room find the release also or Investors sections can copy press of on You of the this Broadcast like to would time, the At over conference to your CEO, Group's turn Beasley Caroline Beasley. host, I ahead. go Please

Caroline Beasley

good quarter Thank third you for our everyone, joining you, morning, thank to us Ann review and results. XXXX

four share closed actively by thus family, operate year into XX. LMA in and an we market. Reflecting in as working announced, the to revenue during under they in cluster, this thrilled September our are previously we the well recent into strengthening Philadelphia strategic on quarter we Heritage hiatus, XTU are is XX.X%. on subsequently QX to As revenue After strong Country back our acquisition third initiative excited as outperformance already of nearly grew quarter we their and revenue began to the XTU staff Station our the the our then Philadelphia welcome integrate our and we markets, position Beasley

rundown me quarter. the a quick on Marie of more let Now which quarter highlights the will provide do after detail

nine in approximately reflect reminder, nine in stations and months Boston represent results months a contributions the two three and months results operations of Boston ended reflect September leading actual four Coastal 'XX nine three months months [indiscernible] September divested and 'XX. from September nine of As Carolina months also 'XX. results ended FM and the XTU results ended in in September the ended from contributions The from in the which and WMJX market and reported the three is the sports the and 'XX,

approximately our as quarter a total in financial Philly, the at net as a in operations to [ph] and third clusters. the acquisition, the during X.X% I Beasley and rose market, Boston expenses stations of million in at when SOI. our revenue we USTN. as with XTU charge combined quarter and of five reported decline outperformed year-over-year revenue well of with the starting a direct operating increases resulted from benefited new combined Station So $X.X our basis result on due our charge USTN we a The said, results; issues as and

However, just SOI X% quarter-over-quarter under this a when rose excluding on charge. basis

XXXX let for the transaction. the We So through and from heritage based rationale coming Philadelphia's $XX in for credit position a financed from borrowings was strong that The and facility, great XX trailing demographic cluster. our was market Philly including XX% every a market synergies female respectively. in. of the to our XX-month asked to $X.X Notably, almost our addition immediately and format, multiple on the million revenue our was pro market and transaction purchased of synergy. XTU I which the increases is leading minimum transaction review me SOI another with accretive quickly million we're cash-on-hand. latest goal $XX additional forma financial strategic acquisition X.Xx million inclusive with remaining station revenue of competitive $X.X revenue September of the country to The and million the $X company's The which of million XTU estimated share as adjusted enhances listener in company SOI

Show Checkpoint over listeners. nationally and to weekly use our to which This acquisition accretive is which an SOI generates in annually. syndicated Media, XTU approximately is only quarter one us addition already reaches third further grow late brands allows immediately strategic we an that hired was with funded Esport from $XXX,XXX it marketing operations. event company. have of that the Tampa, acquired event QX successful In and in this company abilities Also The to we during cash acquisition, the acquisition Florida, million

small demo and to innovative new it. their to reach content. on air and us we've channel. and weekly also more great and fully the and as vehicle to a generations hour of content of unique acquisition we addition reach listeners Checkpoint focus twitch it's podcast. also working for that future was with a quickly the continue are coveted [ph] been was two own This delivered add the ways expand on to demand to creates host more The show, and weekly shows leverage In two regard, monetize this funded In cash-on-hand,

five pop four pop podcasts to culture the and [ph] such culture; personalities Friday new interest comics, launched Monday and take show, we featuring as in Checkpoint through last three the Daily, Checkpoint of a their to wrestling. target and around specialty weeks gaming dialing Over additional Esports, daily shows topics them

advantage recent content continue acquisition demonstrate take and in our continue record track transactions other our and sheet can strengthen manner to strong long-term acquisitions ecosystem. and expand, plan our station, and event disciplined our as For to Beasley to grow Media our that balance accretive and acquisitions built Esports a identify further investments. strategic diversify we to strategies platform of company's further diversified to potential out We leverage

our value been to demonstrating report to on, successfully our content X markets. anytime released deliver rolled of Radio. anywhere, moving out of listeners to these that Now device our on Phase and to this of data great incredibly initiative app our we've commitment while initiatives attribution happy has any Both to advertisers the our quarter reflect mobile I'm now all further

it's core a believe them our Beasley contributing of to business website. confirmation list to game significant As the a will we Analytics data such We future advertisers attribution given Radio in emerge as from drive provides results. unrivaled operating see how changer our

stream with digital realize people turn expect invest to coming Marie. continue to we products over in years. division in and We revenue this it the and that, our to growth going significant in both I'm to And

Marie Tedesco

Thanks, Caroline.

third Let's balance start and results a some items. quarter will of then review with review operating I the sheet

in operating in $XX.X revenue million we in as five the quarter clusters. income compared increases for the to in million inclusive a LMA million million year expenses Traffic net station in XX.X% asset million rose our in resulting expenses reflects to $X.X million net $X.X Station million operating operating the basis to period. to Third States at a The fees of Boston quarter WXPU and of station $X.X revenue or to X.X% due $XX.X charge and $XX.X addition year-over-year the Network. increase increased saw of swap, United the ago issues XX.X% $XX.X decrease on financial

expenses XX.X% would the Excluding would X.X% charge, SOI our up. increased and our be have USTN

generated revenue revenue category increase on Looking representing third quarter. during XX% and mid-XX% in quarter at categories in about 'XX our revenue a an the year-over-year actual this our consumer revenue largest our we services category remained basis; of

services real consumer medical, dental, category construction, Our insurance includes and advertisers as such estate.

up G&A was increase down national our mid Our largest was third category national during mid-single on second And our year-over-year in while single-digits. basis. for was by fourth retail quarter decreased the category a category improvements mid-XX% seeing combined revenue third the was quarter we in we are largest quarter which Corporate are the auto, to range. million. digit $XXX,XXX a low-to- performing largest revenue revenues which Entertainment as $X.X also in showed

in share million XXXX Reported the in primarily The stock-based was of cash the Media by connection non-cash of items own year-to-date. quarter non-recurring quarter USTN impact $XXX,XXX we our approximately to quarter million third XXX,XXX the taxes onetime third XXXX. sale reflects Greater $XX,XXX with the operating incurred and to compensation addition, fair of million including $X.X income year-over-year July and of the approximately quarter several In $X,XXX of to the for the in value company paid prior certain [ph] XXXX. decrease $X.X acquisition and million $XXX,XXX decreased for compared A charge. the approximately the in in change who $X.X consideration $X.X expenses contingent of Borges members professional family

expenses, acquisition. borrowings quarter XXXX as the $X.X $XX with approximately operating of million. XX% XX, third million reflecting Excluding outstanding was increased income Beasley's of year-over-year additional onetime senior of $XXX the partially ended million transaction, the and at Reflecting total approximately $X.X year-over-year approximately debt the interest our XXXX. for these million the to November to third refinancing quarter expense $X.X was $XXX offset this Total million compared XX, 'XX WXTU quarter debt or cash-on-hand September WXTU June $XX We decreased million million. by of

operating XX, XXXX; September defined million, in $XX.X as in was credit as of flow X.XXx compared X.Xx LTM resulting cash agreement to of the of this as Our a XXXX. consolidated leverage XX, ratio June

$X.X company reflecting our and that Our to our net the compares the sheet of credit million agreement XXXX September allows leverage covenant leverage to cash, total X.XXx million spent company to at $X.X and XX, CapEx $XX compared leverage, compares quarter upto also with in XXXX. a year-to-date at And in in June compared net of year-to-date X.XXx current maximum XXXX year Xx The company cash-on-hand of in the was balance XX, the on quarter. receive during basis CapEx calculating benefits same million million the prior the $X.X XXXX. million to $X spent

from XXXX excluding On million period. X.X% compared focus expense flow the flow cash cash million year a to rate interest the million $X.X the strategic increased free write-off $X.X benefit For basis, our was to quarter, and our management, transaction, USTN, reduction. free of on $X.X million 'XX $XX the November growing September onetime free of reflecting flow and ago cash in year-to-date

and shareholders other I value pay We with back accretive strategic to and that, select strengthen cash will our for transactions, to flow in continue in market. position it compete to to allocate that Caroline. our through reinvest cash return our our initiatives quarterly turn sales to promotion, free research, down stations will our dividend, And debt, and to

Caroline Beasley

Marie. Thanks,

same $X year about for to $X.X had just actual nine 'XX. up a we're rose reach and And advertising With QX looking in are ahead, during total political expect and it's revenue as double-digits into to approximately into potential to up first we going double-digits political, the year. of this We're north our excited and Q&A. pacing minutes we Esports very well. in respect future actual, of the again, go in is million November December the Looking is few pacing million months acquisition as political station October content in

exciting and radio's and content. of stations unique all we're for coupled the technology effectiveness the ages that original cable hammer-home you TV is all closing, a attribution we radio and cost connections outreach many aware, the one local it's and is able offering and important available In today, in radio provide many as U.S. and infancy, content. demonstrate in targeted this to for advertisers more great fact of and our in space and to number in the leader audiences now a the this in engaging and reach We highly broadcast us advertisers, medium brand that demographics we As reaching audiences These to forward and with industry remains allow are build of area to look factors effective cases in digital spaces. to on it's

over driving or remain in ratings share [ph] As markets such or platforms. market we our sending existing brands multiple our towards goal of on our across XX% revenue revenue, of hyper-focused title and like

this XXth period within paid dividends. consecutive bringing we our by We and of time. operating capital ratios reducing to through cash and our we're XX-month continue also with voluntary of to we leverage mindful and XTU trailing managing prepayments. leverage very consolidated capital saw slightly We're remain cash shareholders growth increase flow short and our a committed as return quarterly structure our to latest the acquisition, down We just

our and with increase We on to revenue our flow to our point cash opportunities diversify of long-term to also expect view. scale, continue grow a act free strategic

of to corporate she Marie; questions to And our ask personnel, with and to I'm for you number thank it answer. participating. turn behalf stationed on of has going so a and over And that,

Marie Tedesco

questions; several quarter is advertising the received and how first on question the station Caroline have basis, We for in was same first the core ex-political?

Caroline Beasley

X%, on same on down with was ex-political basis a was it advertising approximately basis. same a station station X% approximately down Core political

Marie Tedesco

How is fourth quarter? in pacing core

Caroline Beasley

pacing So core basis pacing for is a single-digit ex-political on same up currently low station.

Marie Tedesco

that. will Also, how relative take XXXX? I to tracking political is

was another non-election was million. So which $X.X the in revenue approximately XXXX year political

which above million a our expect is XXXX to north initial in finish expectations. We little just $X our political bit of

at in on largest about is very pacing be talk and looking the and Another as discussed third and on it how And you XXXX, pacing quarter, So earlier. to year? third are up in a question natural category into we Auto next was was up auto auto basis our it stage, our early is largest dependent is, a auto category. fourth

do that where focused and growing our also we're managing leverage And quarter on discussed going about XXXX; quarter Another fourth do question does debt continuing to in how to net on revenues by leverage down is, expenses. also very delevering We're So focused to and continuing into you XXXX? think your today? our and pay was X.XXx. for our as stand third we

Another should [ph] financial in is, USTN anymore to quarter? invoice if exposure the we to review question our expect loses and we issue can help fourth them. And

Caroline Beasley

Right.

write-down So million, should There USTN for USTN. that to $X.X further we did was write-downs exposure that. of a be complete our no

Marie Tedesco

And USTN what for [ph]? the is options stalwart's Government your

Caroline Beasley

past in didn't all So eggs basket for us to we write-down. put want say $X.X used one only I the so vendors of that we reason had that the just in was which we multiple our million

reselling working and inventory are we monetizing of some in-house We inventory as on are well. some CATS of with [ph] this currently also this

Marie Tedesco

Caroline after any or have earnings And answer if please will free either to myself. to feel those call happy the call we and you additional questions, be

Caroline Beasley

as Marie feel free Well, again always, call. for said, Alright. you to as And participating. thank

Operator

conference. you participation. conclude for your We does today's thank This

You may disconnect. now

Beasley Broadcast (BBGI) 2 Nov 182018 Q3 Earnings call transcript