BBGI - Earnings call transcript Q3 2019 | Beasley Broadcast Group, Inc.

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

Operator

Good morning, and welcome to the Beasley Broadcast Group’s Third 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 the Item 10 of Regulation S-K. A reconciliation of these non-GAAP measures with their most direct comparable financial measures calculated and presented in accordance with GAAP can be found in the morning’s news announcements and on the Company’s website.

I would also remind listeners that following the 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 of now over would ahead. Caroline time, turn go At conference the Beasley. like Please to Broadcast Beasley’s to host Group’s CEO, your I

Caroline Beasley

some our several to and you, provide quarterly quarter. who then it over for highlights CFO, the everyone. operating Marie results. will for joining Thank and color Thank quarter you I’ll our Tedesco, morning, us good on third more first review hand

So, the is our X and been let accretive our and to of Consistent us this $XX.X station synergies, market. deleveraging transaction XXst. to the integration broadcast Detroit, completed to XX% share cash financial benefits strategic platform, moving me forward on full growing revenue and income three funded and begin we the achieving in to was accretive million $X.X of and in free as is pro Detroit combination August and operating in in approach as look while immediately hand. translators DMK contribute over approximately weeks flow this to will million by closer complementary radio which cash acquisition stations our the The such, The And includes last acquisition portfolio and has reviewing three expected. a The on realizing goal the of price debt digital existing operations by Beasley’s in of purchase disciplined was total market. DMK the of and our with addition to DMK of we the forma XXXX.

million, basis our by a year-over-year Revenue driven Fayetteville, Wilmington Charlotte, clusters. at X.X% Detroit, looking to the quarter. and Philly increased by Now, Boston, on $XX.X

in spectrum revenue to third USTN Looking non-recurring last closer we XXX,XXX XXX,XXX approximately non-recurring and license. the related a revenue quarter, cancelled traffic of recorded year’s of comparison, year-over-year at revenue

a $XXX,XXX from decline year. were impacted in QX prior revenue ‘XX by $XXX,XXX revenue in addition In levels political

our XQ X.X%. of As the $XXX,XXX excluding grown revenue such, net combined ‘XX to items, would these have revenue related

Now, levels XX,XXX, adjusting excluding for station of not and third on essentially minus flat, spot or quarter the and Revenue higher items advertising the same political. a same non-recurring quarter flat station with revenue was basis political. for while

in continued is revenues quarter revenue trend year ago of In addition, X% also period and evident revenue our we growth progress months in quarter our year in ago. to ended year-over-year is third up September with compared make X.X% the X.X% third for as almost XX, represented basis on from into the a quarter. digital same and as accounted total comparable this initiative, revenue, XX% This grew digital nine X.X% digital a year-to-date to of

on with focus margins million. Now, acquisitions our synergy the in XX.X% strategic drove quarter accretive line, past combined our a looking and to increase $XX.X third realizations reported revenue SOI

Third also strong basis, forma rising on X.X% and same X%, was quarter and respectively. by pro SOI a station

of Moving or Philly X.X% year-over-year the a pro from a basis with cluster, that reasons and I And we in station market heritage forma increase was format pleased drove And XXX,XXX. revenue our Philly. on, this quarter XTU we return the with station and on WXTU over third of revenue increases just a Philly as XX% a revenue generated we’re have of the teams acquisition we in successes our forma third prior to well country job results a XX% pro a targeted of experience year-to-date. like we to one year and the congratulate with done. share at had for XX% And in this the our quarter would last in

political, borrowings increased of due investment on quarter of and with offset year, diversify and a the related our decline expectations expense our on our the higher as than increased related to compared of $X.X CapEx digital costs this by to the out corporate flow CapEx to investments platforms, related to we full related studios reflect and third increased And to the to Philadelphia the year-over-year taxes. that interest our was we’re year-over-year overhead is more year. of quarter XTU, build to now year, our lack this increased platform. in and cash in XXXX near-completed was growth As the SOI free related quarterly last free addition ‘XX $X.X fact the expect to year cash the making third this million the we additional previewed earlier earlier higher million calls expand call And noted in flow

flow pay leverage We eSports through to transactions our cash market strong debt, that allocate shareholders continue investments strategic our decisions. brand’s and to value in to our return quarterly complete and down and businesses cash free including dividend, other content digital to

over into take Marie, dive going to deeper And to quarter. going it I’m the turn who’s a with that, to

Marie Tedesco

Thanks, Caroline.

start me and of third Let then balance review will the I with our sheet. quarter the results, review

to Boston, Philadelphia revenue and clusters with Wilmington and quarter year-over-year Detroit, or net we revenue net Charlotte, levels the in third saw ‘XX. $XX.X clusters net our to increases Fayetteville, $XXX,XXX quarter X.X% Third comparable at increased million, remaining in our

approximately in was equivalent and revenue, quarter which growth political spectrum $XXX,XXX of for As quarter. ‘XX, impacted X.X% revenue would comparison an mentioned, approximately net third to revenue $XXX,XXX non-recurring revenue USTN of Caroline the additional non-recurring $XXX,XXX the combined of year-over-year in by be

which offset to and quarter operating from WXTU the Detroit to X.X% and Philadelphia expenses was Station Philadelphia in $XX.X quarter acquisitions. USTN million operating related decreased non-recurring for -- million, mostly the WDMK $X.X expenses by third of write-off partially occurred the ‘XX, that

increase on in in X.X revenue led to income $XX.X a station basis. XX.X% increase a As net the actual result, million operating to an

an around during generated revenue the largest our representing revenue. of revenue basis. our quarter category year-over-year for increase in category this at Looking a our services actual And quarter. Consumer categories on revenue third XX% remained we XX%

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

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

XX% our The for categories revenue. quarter total third four accounted of approximately net top

On station X% the same XX%, basis, was auto X.X%. down down increased and consumer X.X%, declined entertainment services was retail

had same strong Another the the which category telecom, rose on that performance basis. quarter was in station X%

our million, prior Corporate in it to differences timing primarily down, as investment entity. platform. we transformation quantify pure the and initiatives G&A our G&A the in we our out This Company continued this build corporate $X.X compared third year-to-date. quarter quarter digital related radio same increase play investment, to a increase million. and and $XXX,XXX diversified reflects year-over-year to a ago a To quarter spent is Breaking million the $X.X digital in audio a expenses to media year for increased year from ongoing compared $X.X focused to the approximately

indicated will investments year in content on result platform, As throughout will These an team staff. digital digital continue calls. prior portfolio, expanded and and sales the corporate digital

be We a should these complete, this at build-out point of move is expect will the into and see decrease, digital to corporate our expenses markets. stabilize some then and that we once expenses

$XXX,XXX at compensation Non-cash XX.X% quarter. third was in up stock-based

million. the purposes. are certain a not for XX%, as tax expense expenses for result tax tax effective our that $X.X the was quarter was deductible rate income of Our And quarter for

cash XXXX station was compared result quarter, quarter income a $X.X million while XX.X% million, to flow. Reported as income the third third primarily in net operating higher of or year $X.X $XXX,XXX million approximately to quarter ago increased $X

Total costs and the third quarter hand interest to year-over-year quarter expense $XXX,XXX in the debt ended cash to in our additional million. borrowing from $XX.X borrowing related quarter on in increased voluntary reflecting $X We recent million of $X.X period. million, acquisition. $X.X with repaid the increase year-to-date for approximately made overall repayments an We million

at to million September of WDMK at was June transaction, XXth outstanding total million $XXX Inclusive compared $XXX.X the XXth. debt

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

at compared to quarter, with benefit cash, up maximum million compares year-to-date, And $X.X year leverage X.XX the XXXX. times receive times the X.XX that’s X.XX times, the in to prior total third to $X.X XXXX. year-to-date million covenant the on allows basis leverage a net million XX, to We sheet June compared in Company spent same calculating and our in hand $X.X net $XX Our leverage. credit of was on during $X.X our of which to the CapEx agreement reflecting balance million and quarter cash compares of million

in primarily increase G&A higher studio. third variant build expenses, The investments, -- interest Beasley expense in decreased year corporate end current to For free the out increase million reflects A $X.X in third from million quarter expenses, XXX,XXX $X related tax a $X.X our acquisition. quarter. to flow and reviewed in Philadelphia related corporate costs prior $X.X to million cash includes to borrowing increase G&A expense increase due which digital $X.X million in the $X the which of in ago. quarter, million increase a growth A moment income I XXX,XXX in million current the the the Broadcast capital

These partially $X.X SOI. increases in station were by offset increase million

Caroline by flow free expect quarter. positive the of another we earlier, noted As in fourth quarter cash

and complete to research, revenue been our our return practice, shareholders quarterly our stations for we and debt, that flow allocate share, position. payments promotions, leverage initiatives pay to brand other accretive our will through to content to the and and less strategic transactions, reinvest free to has dividend cash continue market As our value down in strong build

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

Caroline Beasley

Marie. you, Thank

advertising. Handy development midst the during we expansion rolling a and the transformation the to for ad third more publisher for the we has and see in we blue quarter, worked retargeting of and customer media the development, of digital out with and background and identified with success digital Todd’s investment and As digital discussed, platform. we diversification Handy advertising search strategy an pure decade, having Officer. our After sales, and across digital and And a performance sales. the of implementation the products and into also in benefit spent startup continued media, and to been years led stronger mobile, ad And XXXX. programmatic are the in and newly we much expect aggressively digital operations an tech Todd affiliate that sales Company. responsible analytics, expertise, our of at than Chief native space for digital created plays marketing be and extensive team going six local studio hired Digital fill will display, position forefront He and chip audio, our video,

activation, themes campaign to digital and solutions lead marketing, possible of custom support advertisers final development These custom developing in and presentations, help well revenue. and proposal received performing progress. our internal be our campaigns development, renewal increased by due including highly campaign increased as will teams. recording by digital teams recap seeing reports. continue both as team been have optimization, in The turnkey This and to rates, efficient we're very generation, And

that revenue year-over-year digital So, in to on reiterate, almost XX% in the XX.X% revenue and happy I'm an basis. a digital in report increase we to a quarter, increase year-to-date saw third

growing process within Our commitment BMG of well. and to their editors of as their that these pod force music and first exciting syndicated brand XX% produced with our are audiences creating we're out new, users up showing XX%. in expansion and of now series And a team to content full record increase Specific continue are to views work digital result, our as including and also We're are just the in the our in an our content. videos, early to own in are own a content continuously place growth, rolling and space digital IR examples of year-over-year are relevant page digital successes expand few seeing. continues efforts to

Studies. can of Finally, stations a Group for are five five eSports seven different this Greenspun such Radio Renegades, approximately teams North In and Checkpoint the businesses We with now Friday, about portfolio a partnership live and And of the it further its on and eSports great we XP into in with Rocket the a School content, from as well. students show these endeavor we integration this we Twitch let entered syndication invested eSports we and eSports XP offering September, me produced with in hours Fortnite, content Sun eSports for Earlier entered competing in Journalism media is positioned regarding Media Campus, via of UNLV a continue invested very of in excited through tie and weekly. one a is for we be look League. review is Hank smite includes as partnership created a to on forward year, a heard we with players And team as for America. you podcast it's other and our this on as where with On new Checkpoint college-based into by On collegiate voice our In work XX show space with creating which in sharing of that XXXX, different social primary airs catalyst games potential approximately while demographic, opportunity. this students team And current interest. investments XP. appropriate. day, to as to Monday Campus Checkpoint

is QX digits. to And the November looking ‘XX. moving comparisons facing balance October down of by single revenue on actual with and and into year's Due last cycle, currently political the

the representative as However, in a more and net recorded December up pacing single the we in year throughout digits. political And is QX reminder, revenues. it's approximately $X.X seen million in low we’ve what ‘XX, of

recap, inclusive of eSports. particularly increases we shareholders. quarter third saw capital Company diversify to on on we're SOI to-date, managing So, basis, the that and structure the and actual long-term return continue and our on our basis. And to we've leverage digital focused investments to we and a We're performance in capital investments revenue made

thank that for time have any Marie, So, you do in? questions with we I today. come that, And, your have

Marie Tedesco

Caroline. Yes. Thanks,

So, we a -- few questions. of or handful received

except Now, already most for of few. them been have a addressed

going I'm so, dive into And them. right to

our Caroline, some you, flow digital color that positive? can EBITDA segment’s whether and on provide cash is, is question First

Caroline Beasley

this the and I mean, what digital we're segment to just earlier, mentioned our EBITDA EBITDA, And plus digital area. revenues range. percent increases And yes. reported reporting come on in than digital next Handy XX but positive. in hired Sure, the flow board. for as Todd in even higher very cash not the And we’re I we in year we we're quarter. definitely, at looking about segments third We're is looking just excited margin

Marie Tedesco

our forward? please question is, M&A strategy color you can please, on Second provide some going

Caroline Beasley

Yes.

for So -- to into we would M&A, three I I break like buckets. mean, are it

will sense have potential for make and of at strategic Company. core acquisitions any radio, We business our look our that we

and at value In addition and and also growing areas Company. revenue for we our to because looking for our area. near-term these digital see that, providing we're two our growth long-term eSports increase as And significant Company

Marie Tedesco

is, by expect at And been questions. the get that final our debt question and And year-end? to X X additional target and is, year-end, does growth our yes, leverage times times is concludes to our by And target answer the from both that remain repayments. the organic has target, and our we from closer

Caroline Beasley

great. Okay,

have myself. you you feel So, all free please And day. on reach participating to again, you Hope call. thank to should questions, for any the Marie or all out a great have

Operator

presentation. Thank you, This ladies and today's gentlemen. concludes

may You now disconnect.

Beasley Broadcast (BBGI) 11 Nov 192019 Q3 Earnings call transcript