BBGI - Earnings call transcript Q1 2019 | Beasley Broadcast Group, Inc.

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Operator

Good morning and welcome to Beasley Broadcast Group's First Quarter 2019 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 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 sections of the site. would Beasley turn Beasley. Broadcast I to conference time, host, your Group's this like the to over At CEO, Caroline go ahead. Please

Caroline Beasley

increased joining first Marie, several details But quarterly by Robin, Thank a after more which revenue first good additional and it highlights quarter, going operating us over looking year-over-year to handed for your to quarter review thank quarter. our is on to at on I'll morning, results. we the I'll our review who you, X.X% you basis. everyone. provide

acquisition the As with Philly, Tampa. in growth last It the and and based, of was Wilmington year's acquisition and by quarter, is Boston, the revenue Augusta, event XX was driven by XTU September broad company our also clusters. driven of Tampa last

also the increase a New as Hub quarter which we which busy to Boston all the Bowl of quarter. the XX.X includes cluster Super year-over-year quarter know, First in to was the which Sports England won Patriot our contributed

As we with discontinued XXXX. in USTN in reviewed our the industry, widely and relationship before reported as

first we last this year's have revenue traffic we did quarter, of in realized not that USTN approximately year. revenue However, and $XXX,XXX course

national increased excluding essentially this for was our revenue such year-over-year X.X%. double And X%. pro by for increased basis increasing by Overall, net digits As forma's forma led On national our the would revenue pro flat. have a the was with team that revenue quarter quarter. spot our revenue

national in increase. that team, kudos So participated to national rep and who our everyone our

forma on the February, basis. an pro QX and performance guidance with we both Our revenue in was actual consistent provided

by quarter us Our to portfolio enabled margin moves increase X.X%. reported first and SOI focus

strengthened pushdown country Philly see our almost year-over-year is compliment of under heritage exceeding to existing position XX% cluster the of ownership. pro corporate revenue this cluster we in projections, cluster QX, write return has decline the in from that's The revenue station grew us prior to primarily The a competitive integration great is XTU in our our up this internal the also with revenue and and quarter, of market While addition revenues slight related revenue closer is QX. did Philly our as our XTU moves a Philly in on share basis. X% XX.X% garnering and XX% quickly the share market, forma to a

cash, the prior increase $XXX,XXX on taxes saw Finally, variance a $X is expense The first a of in free interest We well that comparing both reported a in to when year. higher flow our to the benefit related CapEx. I is cash to want this increase about for was basis and address related as pension a year, last to negative and about directly as quarter the cash in million interest $X million $XXX,XXX. XTU higher acquisition, rates a

going diversification to going where invest quarter. operations, hand the facilities, and dive opportunities with and revenue value. into Marie we to to who's shareholders content that it in long-term and to enhance our In addition, flow flow not our agreement, $X license in return and as cash this We allocate received free is continue of to cash value terminated million to free debt, in we the million a to our over and I'm to deep to included see reduce take And shareholder cash a a $X intend when calculation. result

Marie Tedesco

our quarter sheet. balance Caroline. will review now results Thanks, and I first

mostly in of Tampa X.X And $XX.X Wilmington our related Philadelphia X.X% strategic X.X% $X.X Augusta, approximately equivalent expenses we net rose with our to quarter quarter first or and first growth addition of the other WXTU Station XXXX. been million by have XXXX, would a Caroline to an mentioned, was impacted it's Boston, increases in initiatives. of clusters. revenue and So USTN million year-over-year first quarter growth additional revenue quarter the and digital revenue and net operating saw to increased as $XX.X $XXX,XXX year-over-year and in revenue to net content comparison million

in station the a operating As X.X% revenue X.X% $XX.X net million. in to increase rise income generated a result

revenue categories for quarter our basis, revenue, the services in XX% actual almost about category largest an consumer revenue categories our at quarter. year-over-year of revenue Looking first increase on these our we generated and representing during X% remained a

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

for was fourth which was X% Our largest a largest third quarter quarter first and for auto; also in total first aggregate revenue in in was quarter was up X%. quarter categories second first account entertainment categories four our revenue our top over of our category And largest up the revenue categories category from top retail X% with year-over-year XXXX was up X%; net XXXX. approximately XX% the These net increase, revenue. four

for retail station entertainment Corporate same was the the compared to $X.X the increased consumer X.X% On a ago million. was auto X%; year up was same basis, expenses to down X%. increased services quarter quarter X.X%, and $X.X million G&A down

our a of first fourth on seems as related benefit G&A down While substantial, a increase investment related digital build our investments to primarily non-operating is XXXX. quarter of will provide color including or a in prior of pension and moment. expenses the checkpoint X.X% corporate which the in increase to platform of plan. Esports Also further, continue more year-over-year of year approximately Caroline and it the our a it we $XXX,XXX quarter digital Breaking million, out content $XX,XXX result pension that a markets, reflects of initiatives to $X from increase determination as $XXX,XXX in

approximately quarter, largely expenses a from radio to expenses our These reflect So a pure play Esports focus increased audio entity. and of sales positions. year including company will The several Content content and Esports digital a our media investments. staff, ongoing addition and of for Editors, us bring and backend corporate will Content to a VP investments digital fulfillment transformation relates ongoing diversified Officer, digital of expanded, our Chief throughout corporate the an be and the the digital digital, Digital Format $XXX,XXX

be to be XXXX, mentioned, and in XXXX the Non-cash for and income will $XXX,XXX million and based out as expenses expect and expenses was to previously our between quarter we regular quarter expenses stock we X% initiative the in Now remaining Esports the as compensation initiative quarters corporate breaking first investment investments around $X.X report expense to for year. digital tax down our $XXX,XXX. $X million was the we

tax first positions on $X.X Reflecting to an Total well the million, first increase reflecting acquisition, Our March expense in to prior $XX.X million quarter. already million additional million, quarter million increased of and million, cash quarter and costs. the a in make reflects million well increase $X.X first $X.X XXXX reduced XX, year quarter XX.X% the The voluntary first approximately the rate income quarter of a effective with and borrowings intend compared to are ago the compared as for certain in interest as as as use the In by quarter million of quarter year overall debt of was was $X have largely year gain for as outstanding to $XXX.X six of for tax and XXst, we value late continue charge first operating of of the XXXX debt second previously Reported $X.X year-over-year flow XXXX Net XXXX, to change reflecting the income we loss the reviewed, pre deductible million around due our to was million not an current in We throughout year-over-year the on change remainder of year-over-year acquisition, the cash WXIU $X.X was today, contingent in balance expenses $XXX,XXX with hand $XXX compared to fair XXXX million. additional in purposes. changes payments ended completion XXXX. expense the to of taxes. $XX December third free these as in the charge at second in a gain as a total $X.X the WXIU XXXX. the quarter quarter and consideration. XXXX quarter XXXX million borrowing $X.X quarter

Our LTM agreement as consolidated credit operating in cash defined million. flow was $XX.X our

$XX company on the cash up net Our leverage. to credit total to our of calculating allows the in agreement receive million hand of benefit

first our sheet maximum of reflecting on quarter in X.XXx, company the basis same leverage December compared CapEx covenant XXXX. and $X.X to The And million spends net XXst, March leverage million a was cash, as with XXXX. quarter for X.XXx of as XXXX XXst, with in So compared balance X.XXx. compares $X.X the approximately that's

which increase the $X.X for noted, the prior decreased to flow $XXX,XXX due prior interest the Broadcast acquisition, well of previously year negative costs, a in $X benefit replacement that a the of a our rate $XXX,XXX free expect Please XXXX be first includes reimbursed for Overall, through note under move not the be indicative closer achieve quarters positive will of $XXX,XXX variance to from is million in levels. current to in policy. Caroline directly the for flow to that cash XXXX. as quarter, cash cash quarter. run insurance The Group's is a million transmitter we free the quarter increased and capital and to as XXXX expense expect increase to as $XXX,XXX move free expenses, As year, flow the the us in related we three full-year remaining in XTU pension Beasley we borrowing

our with are it down that in reinvest continue to for debt, free complete Caroline. initiatives cash value to needed allocate leverage strategic, to positions. to through our content that quarterly I'll transaction brands, and our market accretive to been will sales As our select, strong stations promotion, and our return payments has research cash flow turn pay practice, And shareholders and back our we and other to dividend we stations

Caroline Beasley

growing an to and where our stage our the growth. continuing platform I'll we revenue have for future on our And expand our streams, diversify update local invested Marie. focus you, to Thank set provide to core operations on our audio leveraging initiatives

out previously transition platforms preferences, given our the cash create participate vision important will revenue As digital is the that further believe reported a the in company. diversify our the rolling our diversify and it's are to hard long-term advertiser aggressively midst on streams we working across free initiative having value. strengthen expansion transformation reviewed, shareholder and short-term consumer we've new to to impact share and company business We're flow, and this and and in we of

is increasing seek DNA of minimizing we local resources, monetization platform. delivering efficiencies of driver our leverage this excellence digital as platforms, effort by first digital across So to and all content redundancies our every and the live maximizing across marketing while

of anticipate we to XX% the our the hit and our For and in excellence. market is that of events. credential the year, company's and music digital accelerate running generates trained place traffic, and now position industry, format content and Q introducing across the This is in national content January, focused strategic ground nationally local commitment and the new has fully pop focus Today, editors were team. to first reinforce on major group team to been boarded our in designed about our digital on publishing part initiative this expanding our the the new in this digital of team to late second content A relevant universe. culture leadership markets cover

local has largest our allows content, market includes the to exceptional traffic, a And our markets. that our across far are than course, much generating talent page and harnessing believe to growth of more have and approach and leadership participation. We digital deliver views passions live deployed this audiences some successfully in audiences our all for more our local deeper in been extending on-air and to digital of that influential initial our digital markets. aligning with producing This DJ in our expanding with the enjoys digital sampling monetizing commitment several approach connections And fans. interest our the centric engaging midst is their in assets. stations positions connections of crucial our of local this DJ's of past. We initiative content of to the deliberately growing this of this the we coverage, several We've bigger with

what our audio biggest on can and downloads, and of understand perspective expertise delivering X extension growing successes targeted better natural podcast from years and a a that the our podcasting. content million month. our nearly leveraging XX XX to focused We're include levers which presently loyalty. of best approximately we're downloads Next, per listens working a propel downloads We're and marketing franchises fuels

podcast advertisers. top recently monetization larger the bundle are sponsorships to we've For presenting standpoint, begun our to and our we

recently industry. the Esports We momentum, believe ground XP, on where access of emerging new Y we've Gen gamers the floor several growth affording tremendous creating on the Moving Esports Beasley to this oriented there targeting to the Z & arena, is launched overall demos. and footholds and our multi-platform and and Esports focus us where put that established strategic non-radio Beasley on distributing with division content we

established During North the Renegades. considered with America's the quarter, gaming multi an They premier partnership Detroit are one we franchises. exciting Esports of

new growing number a bPod, forward and the distributed be venture we are building initial partner. radio, exciting on very via podcasts their initiatives. moving XP to brand initiative into things Apple, lot where with of a out our XXXX late are this in the with This space the process Spotify. providing honored plate, progress through in Overall, updates of to are right got We on and being team our our we point Google these in direction we've dovetails tweet and with Jack look Beasley

into mid flattish; looking is XXXX, mid-single May is April and as and digits rose revenue Q up actual pacing is June single pacing pacing low on digits, up. Moving

on are second forward. for slightly up we remind everyone which the basis pacing may in did quarter, our $XXX,XXX quarter. I We station impact a pacing in will the revenue that same political going you receive And

front. leverage XTU capital will acquisition, on continue of we the this and our and we expect structure done We're capital and focused our reducing progress so are already from We to further our return to the managing shareholders. we've time on

support no While and future, no received the in of well, to audio our of our can and exciting time today's they investors into and way platforms current operations be distribution long-term me analysts valuation And a from assets, repeat leveraged our channels. new the highly and in appreciative the us value the we're represents way let into we who understand how taken of have value new and know experience. and

interest shareholders, equity we and the our cash advertisers free all to of Our are stakeholders. and dividend represents a yield, committed flow strong of and

look for great foundation future. progress. terrific a And a to our have you We of we keeping forward apprised

We do few that questions were So that to that, comments. going sent concludes review. Marie with in that our have a is

Operator

Instructions] [Operator

Marie Tedesco

Thanks And questions. That's this have been of within the right. answered received several today. Caroline. majority Yes, questions have we call those

a questions review not will addressed have few that yet. been We

fast first worst rather and your four performing dollar-wise, is percentage-wise what and it was the So will address I performing one were by best categories? the question was also not categories, of category So best top by their food. our

wise, down consumer percentages worst about also categories percentage wise was category worst were-- performing our and consumer the Now we by beverages the same products, which performing dollar products. and were was

Unidentified Analyst

USTN question quarter? Second is second in what is the impact of

Marie Tedesco

impact $XXX,XXX. as reviewed, So USTN first quarter both Caroline and was our I for

in it For that impact for was quarter. total will written second quarter, this off million. the was $XXX,XXX. $X.X And approximately Beasley Again, I third all was remind you

Unidentified Analyst

about Another question think Esports is margins we should in how the segments?

Caroline Beasley

for total impact reviewing X% the And content initiatives Esports, Marie that our believe these will our margins. a let digital so to for has before we Yes, at and on year. them have just me X% based that review, about the podcasting we outlined say expected initiative impact on startups and that combined, expense

Unidentified Analyst

final little your question Can give digital is in your had us more that? information you content. about bit Right that on the mention and a you release

Caroline Beasley

Sure.

revenue. content after our accounts that, based initial think into of our we're in digital So about very XX% went results. to And going digital initiative. we where digital I detail the especially our addition we're a that about remarks, And lot of content on excited about for

fishing there's So to this revenue where of we End we're see basically and area. that Q&A in are opportunity grow great the fish

Marie Tedesco

have. we the then Great that's questions all

Caroline Beasley

very you. you myself. have All Marie to questions, you Thank call any right. Well, free thank or And much. feel if everyone please

Marie Tedesco

you. Thank

Beasley Broadcast (BBGI) 29 Apr 192019 Q1 Earnings call transcript