BBGI - Earnings call transcript Q2 2019 | Beasley Broadcast Group, Inc.

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Operator

Good morning and welcome to the Beasley Broadcast Group Second 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 risk 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 the Item 10 in 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 the morning's news announcement on the company's website.

I would also like to remind listeners that the following its completion, a replay of today's call will be accessible for five days on the company's website www.bbgi.com.You can also find a copy of the press release on the Investors or Press Room sections of the site.

would of to Caroline Beasley’s I to today’s Beasley. time, host your Broadcast this now turn like conference At Group's CEO, Please go ahead.

Caroline Beasley

joining to to deeper financial review good thank quarterly take highlights second and a everyone, hand several Marie operating us it performance. Tedesco, then for will over quarter going you, our our CFO, to dive I’m Thank results. into and review our morning you and who

million, second So, our a which for Philadelphia $XX.X quarter, September revenue the XTU. year, Boston, by acquisition the XXXX and is record increase driven quarter last generated Jersey, over clusters, X.X% including of of we primarily New

revenue, related more in at closer license second realized of looking XXX,XXX as quarter, to Now and XXX,XXX approximately we traffic XXX,XXX well non-recurring of cancelled year-over-year last as revenue spectrum revenue comparison, in approximately political year's USTN the revenue. non-recurring

X.X%. have As quarter revenue such, would our second excluding these increased items,

quarter Now same the digging almost national and increased national was a basis, with revenue pro and same spot forma deeper, led by for for again increasing on growth team spot X.X%. quarter. solid second our XX% station quarter increased X% revenue station advertising same X.X% station increased Overall, our the revenue

As time on the first station provided both same such, quarter an at outperformed guidance we we basis. date call revenue the reported during actual and

X.X% revenue, progress to total the make digital digital for quarter. ago in growth accounted our from second continued with we addition, In this of year is X.X% as revenues and up initiative

X.X%. to SOI margin acquisitions reported accretive us second by and strategic Our increase enabled quarter focus

and same by also We SOI station X.X% SOI increased forma increased X.X%. pro

revenue pro increased actual, here, the SOI recap and across to forma, same board. just station, So,

third first as revenue revenues see revenue and we this will itself primarily in XTU we to integration correct will the prior the slight quarter periods. related when second for is ownership. under reflect the Beasley’s we as quarter year-over-year comps in has of While did the enter corporate ownership This continued decline pushdown quarter, seamless, both to been a

country happy we our of heritage basis. XX% second the of our am revenue station return on report pro cluster, that the X.X% as market forma revenue a I grew Philly to cluster the With quarter are now share garnering to

The win, to period both ultimately revenue Bruins on cluster Bruins cluster’s quarterly the be continued play second Cup. the quarter our and and competing to also to contributed Boston busy and playoff for Stanley the that a they in Celtics didn’t games, with Unfortunately, the in the increase. going

X.X in in this to from to increased is related Second Philadelphia increased an studios, to our related and and build-out platforms. digital our to of investment related quarter declined cash X.X million, our free taxes primarily overhead million increase flow higher corporate CapEx a

the later in call. going about little to more bit a this on We’re talk

Finally, million translators’ its market acquisition we and on with is accretive with highly and price of debt acquire agreement The three will gospel. and the existing WDMK-FM announced In translators purchase this of are Urban in the AC about. XX.X The is to station, station thrilled Detroit. Urban funded which to our the combination total complementary we three is in pending and Urban a June, One be by HDX hand. format cash

and deleveraging. close the be SOI forma is approximately quarter. Importantly, to that transaction in expect pro DMK translators and the transaction expected $X.X we contribute in to third synergies, million the will this and includes

the that and and share and much to we operating XX% consistently believe our FM stations market. in will us our add opportunity will acquisition in We entered proposed we our acquired of a the the revenue results move this Detroit strategically goal and This for cluster shareholders. to fourth closer a Detroit of the compelling is transaction market three financially have growth XXXX improved

driving to an is realizing commercial, a forward in all and in businesses and we entertainment benefit the which renaissance financial of cultural and economic XXXX. new city's look strategic transaction are of activity, employment the Detroit resident centres, as residential, this of of result investment billions undergoing new in dollars towards exciting and

it And Marie further now, I'm to going to over some highlights. turn QX to get

Marie Tedesco

quarter, Caroline. Thanks review of the a with start I'll review then, sheet. our second I will and balance

$XX.X our was Jersey $X second net quarter X.X% to quarter saw of or and the comparable Boston, net New levels in Philadelphia increased year-over-year at net we Second clusters, revenue our remaining to million clusters million increases revenue while in XXXX. and revenue

USTN, equivalent $X.X including net Caroline As quarter. million an approximately for which been mentioned, revenue X% impacted by non-recurring have additional the in was of to the revenue, would comparison year-over-year growth

related Station operating the mostly to expenses WXTU, in the Bruins Boston playoff other quarter initiatives. million, strategic Celtics XX.X X.X% addition growth of rose and and to for games the

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

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

such consumer and businesses. insurance, medical, Our advertisers construction, service-oriented includes as dental, other category services education real estate,

our fourth category was was down largest the quarter, retail, we representing retail third here largest generated category, year-over-year revenue which revenue represents second the of largest about and the X% XX% was our X%. category Auto, our up our revenue in and XX% category increase. Entertainment X%. quarter Our of a was for revenue

auto XXXX from basis. revenue XX% the basis, same our categories X and X%, a same XX%, increased second The XXXX and station in declined quarter for quarter on approximately entertainment second X% was a of up services was Top increased second consumer categories retail net X%. total X Also, revenue X%, combined accounted the station Top net quarter on down over

a year-over-year digital Breaking near million, we can second initiative to G&A ago the is increased to for long-term down, Corporate and to support continue related $X.X our to investment our platform our in corporate growth. quarter a G&A in quarter the million. year as that expenses by $X the it rise same quarter compared primarily build

digital This ongoing basis. media on update pure a and increase this X we to X.X approximate from company on quarter, our a XXX,XXX an and quantify in and million diversified entity, digital focused To XX play provide those in will a progress our moment. Caroline spent audio reflects year-to-date months the investment, million radio on transformation a fronts

expenses be staff. will and investments will corporate team, complete. ongoing this except platform, in once to is sales digital year our expanded stabilize These throughout digital portfolio, this and an digital digital content build-out We corporate result

income was X.X was the for XX% Non-cash at in tax down million. compensation the expense and quarter our quarter stock-based $XXX,XXX

XX.X% certain of deductible not Our for that expenses effective result tax purposes. as rate tax for the are was a quarter

income year-over-year XX% XXXX million approximately primarily quarter or XXX,XXX quarter interest million, in second income approximately as to a borrowing X.X year overall while quarter of compared increase XXX,XXX decreased Reported second ago increased million, operating XX.X million, result higher expense expense an was reflecting to second to the as XXXX net interest costs. X.X XX.X quarter, in

previous X million outstanding QX million for transaction, about quarter X.X hand XXXX debt ended million, to and June made XXX.X quarter at voluntary the We million. was the million repayments total XXX.X XTU the XX, the debt XXXX quarter. with Reflecting at late year-to-date. in end We on of of the compared XX.X cash

repayments X XXXX. continue remainder our intend in free the to voluntary voluntary repayment we million to flow July. and addition to quarter, the use debt additional prepayments third balance quarter million in voluntary cash made the throughout and We of of In make in X an the

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

Our with our net credit date the company compared was X.XX that balance XXXX. to hand sheet cash, leverage agreement on leverage a leverage XX times X.XX of in X.XX up cash the our times, also reflecting receive the to of benefit on times, total net March and to maximum and million that covenant calculating in of same compares allows of

The spent year-to-date million quarter, the to the in in of million XXXX second in year-to-date quarter company X.X X.X million and to compared X.X million XXXX. compared CapEx X

Broadcast current cash for decreased free to Group’s quarter, prior in quarter Caroline from quarter. second flow X.X the As year X.X million in million the noted, Beasley the second

million offset increase a Philadelphia X X.X a expenses, variance in income build-out our studio; corporate in million investments; in the million X.X capital of expense. a which also G&A The million increase includes X.X million] SOI, current digital reflects increase [X a XXX,XXX in increase to and expense, by increase expense; in related primarily tax interest

XXX,XXX to the the respect back as July, did studio, of allowance. our approximately receive of part build-out in With we Philadelphia build-out

for research, content, accretive As that our practice, return quarterly market complete has sales select flow through leverage other cash allocate reinvest and to transactions, to pay station’s shareholders our to positions. free brand, continue our cash to and strategic will stations debt, we our down our and in dividend payment, value to strong initiatives promotion, been

to And with that, I will now it back Caroline. turn

Caroline Beasley

Marie. you, Thank Okay.

discussed, midst to in As the we development it we’ve our company. diversification and of transformation are the out we rolling expansion second in digital break during a our digital I’m of quarter, investment And several across the and the in continued platform. going aggressively different out areas.

for and our to the In that new our are XX deepen our brand terms quarter, in brands we advertisers. technology, engagement of designed websites launched audience second with

enhanced while and Our a our our new giving user engine visibility Beasley audience, much apps Beasley website joining technology the audience deeper giving with experience. mobile is greatly integrated experience into our

generation of brands Google late through Development skills Amazon to also our completed bringing in the third roll-out has and next Smart began and platform. to on our skills, Google will The continue new been quarter. speaker July

digital strategically with teams custom well throughout of half recap campaign sales, digital deployed to teams. both have of aspects advertisers very the of local reporting, developed by our we terms internal generation, first presentation, development, report. These optimization our and teams during and sales final lead the including activation, campaign by support all the In and been proposal received organization year, execution, markets help

XX% saw year-over-year, in we and prove as total as revenue total as the X.X% in we as and that of We've as the earlier, rates, year better digital ago to on solutions from, of turnkey current overall market this quarter, to digital course, And campaign increased where X.X% it across revenue a happy mentioned in seeing larger the and to revenue is have both revenue of has we revenue made marketing digital are developing renewal I'm results a and of well grown efficient I report today. possible terms coverage base. custom increase a

audiences our digital In has in content, content commitment our growing of within terms continued full to in force. space

of Specific digital place on format and building the a focused editors are half that current on was creating During first solely the team all content. year, of exciting our on most continuously national in relevant, and our platforms. creating now content content the focus and and are viable integrating new,

team on-air expand record relationship brand result, including over examples while our few the XX%, of page digital interest digital their early efforts aligning this their to us as with growth, to content we views passion With increase expansion digital in initiative, allowing and just and listeners, these side, and a of with are are seeing. working and continue are to XX% local the on-air audience their with our users we’re a showing also up the successes year-over-year are developing an

Let’s switch to podcasts.

on our from focused a download, million increase we of the downloads XX% totalling per downloads is in downloads saw an which increase X franchises than XX initiative, growing quarter. over target This podcasting over X.X downloads total presently podcast first delivering include month. in XX in million We of the million quarter. biggest more podcast, Our

goal Our demands. with that and the to the loyalty continue with that talent can better match aligns needs want working downloads, advertiser is propel listens to understand national and

checkpoint and and the Esports, views. doubled website Since we to intention our XP’s] [checkpoint with to this audience tandem begun and in finally, Radio audience. doubled March, number have space significantly content grow more to in in grow syndication continue [Sun] page our than – Group. we’ve grow new of partner, to sessions our users It’s launched XP’s

show The approximately hours is live Monday to X has North day, for now to X XX the and syndicated hours through weekly expanded twitch America per team on checkpoint Friday. stations in

with basis of weekly a on original time-shifted and podcasts portions different both five produced also We content.

in have new year. various we development and stages Esports be Finally, shows them later will debuting several this we

in rose looking political In have low-single on July XXXX, some recorded about and flat, XXX,XXX actual August third impact and flat. Moving and quarter on reminder, will September our are we quarterly is this into revenue as comps. digits, a QX, net revenue, currently pacing

growth We in our will XX-month focus reducing through voluntary on flow consolidated cash both trailing and ratios leverage prepayment. latest our operating

We expect deleveraging DMK balance the be expect we and year. through of acquisition to of the deleveraging further the progress

made saw we we've inclusive of second to made and an in revenue managing actual and pro we’ve future Now, lead leverage investments continue shareholders. are and and bringing forma growth we results that capital across station return and quarter to board. we the basis The platform are expected to diversifying performance, capital structure our investment expanding the same SOI are to our recap today, our on increases and and to

the concludes that do have some we that, with that comments would have. So, we questions review. that We

I’m to to over going So, hand Marie. it

Marie Tedesco

Thanks, questions. Caroline. We’ve few got a

is Top you in revenue speak our question we’ve about market, that? our share first – The bit can a got a X little about question

Caroline Beasley

Sure.

in excited the one and and Vegas, in a in then, Top currently have, market achieve have about. and around in we’re do that we share the terms are they to the share. Tampa revenue to Charlotte, add believe XXs X market more we’ll market be goal. Philly XX% that XX% about smaller the in see are – in revenue excess these everyone, do of have order very excited we to that our of As reminder achieve. actually XX several the XX% share the we we revenue three to station is you Tampa and and Detroit, markets share. we Detroit, in and revenue we’re are that mark, able revenue markets potential in all upside have markets Outside Boston, Vegas We as ability share XX% of well

Marie Tedesco

Thanks, Caroline.

if rules? Another give question an you update ownership was on could

Caroline Beasley

Okay.

first a next litigation So, and half year, until than should take to of when expecting that's really not not we of other are the say in [both]. decision much here because we

Marie Tedesco

thanks. Great,

a maintenance? got the CapEx and normalize out on to We when expect CapEx also question also we can between and we break and investment CapEx

and around will maintenance million is this The $X $X million be CapEx that and normalize year. we due $X and level between build-out year several in maintenance typically $X somewhere likely million, So, CapEx million other a XXXX. studio investment expect sometime towards Philadelphia also our projects back the to we is per working our to At to lot point, on. that are this to CapEx

was The second next political XXXX? if in question revenue we of mention could the growth half

don't political political of we XXXX for X closer we second in million move into revenue, was and second So, really revenue approximately half much XXXX the to until net the half in of expect the see XXXX.

the our leverage or be end if state to we where Another year? we at question remind is, the could to expect of

times, we And as we have to get always is been vocal about that in try our goal. to the four around past,

I then, was it. think And that

Okay, that was it, alright.

Caroline Beasley

you for thank a or Great. to any free please Well, to you Marie Have out all day. joining us today further myself. reach should have and feel questions great

Caroline Beasley	Chief Executive Officer
Marie Tedesco	Chief Financial Officer

Beasley Broadcast (BBGI) 5 Aug 192019 Q2 Earnings call transcript