BBGI - Earnings call transcript Q2 2021 | Beasley Broadcast Group, Inc.

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Operator

Good morning and welcome to the Beasley Broadcast Group Second Quarter 2021 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 5 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 turn Beasley Caroline Beasley. host, I ahead. go Please

Caroline Beasley

good quarter Thank second this all for our results. morning. with me Marie Tedesco, Thank joining you, morning. you to us Katie review is and operating XXXX our CFO,

continues uninterrupted we that and transition we my before of George platform continue XX This be mourn founded a single wish First, our just the North a company. starting, away this as of multimedia largest Founder to me to the station could with the George he milestone. vision Carolina one passed all dad, who represents say with and our in we X. X had us anniversary, Chair, vision celebrate our let the Beasley, passing company that XXth year groups further June to His when ago in to radio country on years today. major a he

on again moving both revenue our So, and to am quarter-over-quarter saw year-over-year. increasing second the results, report that pleased to quarter I

vaccinations; healthy customers, is consumer of return of ad out. dining and and, by course, visiting Our pent-up national demand; trend local being and driven the again, spending rebound a initial and commuting; retail shop

said, some being to variant monitor continue this we progress. of our impact with this However, the could Delta as

Our XXX% XXX%. revenue second XX.X% increasing spot increasing and national quarter rose spot over-the-air with year-over-year local

Notably, and a a Detroit, across all efficient capital our a overall we Comparing we media facet we sheet Philadelphia structure. and learned double-digit digital, was audio, company with more in increase are year Boston, healthy of are our a our Throughout history, we better where balance stronger, across XX-year widespread position connects remains lot, in local markets business, including every and emerging Wilmington. reach And our a ago, that for and overall audience Our revenue. in and rated today our to of local strong as of and increases significant has on And on-air cumulative localism cornerstone grown have drove ratings focused with clusters highly performance industry the result, revenue our consistently. our emphasis best second we our the our content resonates share market, on in quarter. continued local station our maintained users. content within

We serve programming we’ve quarter. highly continue to progress listeners third and and in customers market-leading the we our reopen against And with made to with event rated pandemic, intend the content. all our

change may variant. the this given Delta However,

and events Delta the further again, but revenue event NTR quarter, quarter, in NTR variant. third upside fourth assuming minimal, quarter were with third and and negative impacts we’ll no second the Our pushed get into revenue from

revenue and second revenue accounting diversification all meaningful these for grew strategic XX.X% we’re looking flow year-to-date year-to-date. our with This period. the recent and making revenue for and upward total progress X.X% Now our fronts. of a digital remain curve cash X.X% XXXX of year-over-year digital second comparable accounted ‘XX in quarter priority, Revenue compares on quarters, digital revenue quarter of and and total at steady our revenue XX% and XX.X%

a As of before, XX% now total eclipsing revenue, and the and channel focus digital it reporting disclosed of this continued revenue with on we’re basis. growth segment

driver digital investment and expenses Second advertising national the a related as reductions our also the quarter revenue. and period. in reinvestment cost is marketing operating our internal expenses direct, spot our as permanent digital of increased that operating and the expense well local digital reflects include XXXX research in in higher our implemented advertising in significant several QX to sales agencies of

$XX.X second free over cash million. positive flow of XXXX factors, quarter these SOI $X and just generated our million was Given we

of proud presented free cash unprecedented months I’m and second generate and extremely team rose SOI way worked earnings, the tirelessly flow last while Now the to enable the XX positive to for businesses, Beasley our in the occasion to challenges quarter. ad-reliant

online strategic our to Our our advertisers, flow users revenue, esport fan and making priorities we exceptional content solid are fronts. progress services and on growing flexible diversifying consistent while sheet remain focused delivering and listeners, cash and our maintaining on a and all balance

the $XXX In flexibility. addition improvement of support our million committed diversification we in senior Earlier secured notes X.XXX% and a proceeds completed ended result, free also we sheet our the capital hand the our due revenue repay purposes. $XX over this indebtedness, enhance with and general of to with full XXXX. to existing future The remaining were remain our year, structure balance and offering proceeds our financial to our can corporate added cash initiatives, flow, on for cash growth we on quarter to in expense-reduction that a million positive quarter net sheet. balance of with as used And second offering

and we’ve particularly economic combined team steps our positions the success, well the operating markets, to as competitive improve confident and position are reduce taken continue We in to near- improve efficiencies, in with market. of long-term and our cost trends us experience for our

recovery Looking as continue return. ad and events continued build to expect as ahead, sales likely and we growth

our in pacing Overall, revenue We July and XX% up pacing our we growth also quarter this digital August continued increases. up now build-out respectively. up September expect initiative further expect from and to third investment and with is as XX%, XX% the drive XX%

me has and very Now, in was category as this also largest sports become second viable quarter. revenue let betting the category on a second our touch

by demographics the process sports given which This Our we betting and will passed, if X% our was increased positive total Florida targeted Philadelphia, of on legalizing are and impact sports a those represented presence Detroit clusters. have and second quarter Jersey in have revenue, XXX% and Massachusetts revenue year-over-year market of markets. New sports betting, our driven our in revenue. the

results. going I our to into to to call a and now over deeper is the going So am turn dive Marie you give she

Marie Tedesco

begin let update. financial quarter, balance me And Caroline. with the sheet by of you, review a a Thank followed

second XX.X% prior we year. the $XX.X in million, $XX,XXX of million $XXX,XXX $X.X audio increased million, revenues Core inclusive net revenues $XX.X down were Breaking Second operations. quarter political during $XX.X to increased $XXX,XXX just quarter or revenue and our revenue generated from a solid esports ad of trends net the quarter, represented digital million, total compared in revenue. digital increased to XX.X% the as

$X.X $XX.X period. million, of loss compared expenses the to or $X.X Station to quarter the SOI closer revenues to $XX.X quarter, up million in operating year-ago $X.X up million of compared were Looking a the or April for million and was million at was increased million up year. quarter station June XXX% million, in second XXX% XX.X% XX.X% May year-over-year. or resulting $XX $XX prior or

in Our in our quarter second the $X.X related million from of investment quarterly quarter million, reinvestment Quarterly marketing. had primarily we SOI increase agency $X.X of revenue, permanent from million and sequential XXX% the XXXX in first in our expense marks inclusive to $XX.X increased in research expenses, a sales SOI. and our market when by reductions, digital increased over cost terms increase XXXX, of

We also after reinstituted level last wage levels made to a year. we the pre-pandemic cuts

services we largest services of to total the saw and XX.X% compared increased XXXX. improvements consumer XX% category our quarter revenue revenue across upward second Moving our when to at board. remained revenue, Consumer our categories,

revenue. of around retail, increases category, year-over-year saw of of quarter. in category of increase revenue the huge This many revenue largest fourth category, up and of category, this showed largest all closed category third year-over-year, total saw in and represented total revenues second our XX% auto quarter XXX% our markets, up X.X% representing was a XXX%. car Boston total revenues year-over-year. XX.X% and was year-over-year largest XX.X% Our XXXX, for our Auto, especially was dealers Entertainment With Philadelphia. second

spend driven services, increase increased from car by industry While second having primarily sales mostly auto challenges, continues the X was car Tier the Tier inventory and new and used X. quarter in

the their Tier fourth X more spend the supply challenges expect advertising and becomes ease as in auto to chip available. industry’s chain We readily by rebound quarter

largest X and was consumer parts, this increased XX%. include food second data of which this and utility fifth to One our pharmaceuticals, Telecom outperforming markets, combined internally source quarter Beasley top that increased X.X% category Kaplan, a second a and Miller revenues. for basis, revenue and of XX Our XX.X%. handsomely our of representing reports competitive On XX% is we increase X.X% auto products of Kaplan, was category XXX%. which markets. drove products, X market clusters our about category quarter, upon market including revenues, Miller the rely total revenues, of rose Consumer quarter represented markets, for XXX.X%

very in market, the our are larger is spot that global when XX.X%. and clusters share outperformed as We looking evident our market at of by a revenue taking

opportunities. had quarter which the our at is a quarter. and a expense first The G&A to first We the rate we NTR. also Non-cash quarter. for digital effective and combined compensation, we quarter, market or XX%. our that compensation I carries tax $XXX,XXX expense year-over-year down $X.X corporate in year and $X.X when increased XXXX look quarter same increase the to to value the performance initiative, to in increase Corporate excluding in G&A no revenue $XX,XXX XXX% our main stock-based exceed the and in basis X.X% ago and for quarter digital the stock-based national, this million expenses, increased We as for reduction on market, continue also was our metric growth from million of XXXX. inside reflects focus a in tax was believe income where wage reinstated the compared the is local that quarter see

structure quarter. increased our $XX.X $X.X $XX.X XXXX million, quarter capital first negative $X net $XX.X and year-ago the reflecting this interest week. million have quarter includes to was Current $X.X loan earlier to insurance million made year-over-year benefit. compared operating million of semiannual don’t in income million payment Total operating income recent second any We a a payments, expense Second million scheduled the to changes. interest million increased $X.X

XXXX improved second hard compared a a Second quarter million $XX.X positive second $X significant meaningfully and flow free as our team. resurgence cash quarter is to the to from work This as million XXXX reflects well in negative turnaround our XXXX advertisers’ quarter. from Beasley

quarter under first quarter full restructured that pleased with flow. are we newly are again second cash reporting We our the positive debt, the free representing

previously our reminder, to allowed offering non-call As we sheet. with completed X all added a announced X bank of issued years, net balance The X.XXX%. a which with to a debt subordinated our at a eliminate process were million bond first company the and excess in $XXX coupon proceeds at quarter,

we quarter million $XX.X on with hand. cash to Moving on liquidity, our the ended

was debt of XX, XXXX, million, outstanding eligible is for total PPP Our including as $XX million June $XXX which forgiveness. loan,

in second period it XXXX. in we the And versus quarter compared expenses XXXX. $X.X $X.X $X turn will $X.X For year-to-date the that, spent million with XXXX, And to same to capital million spent we million for quarter, in Caroline. million back I

Caroline Beasley

Thank you, Marie.

advertising market in top our X% is XX-XX. saw to ever continue ad a our increase clear continue quarter-to-quarter largest Beasley and multi-platform competitive to and highest demographic we and in of year-over-year largest share local stations our to largest leverage the will a quality the drive gain increase our market. one of is we station with share impressively, industry. Boston, largest sales. has which As audience in earlier, adults by share I Detroit And differentiator the noted one Philadelphia. three had the content our ratings and markets spring all a of X% period, PPM have In markets, the the driven in PPM number This This

growing than in our more commerce consumer to audience consistently of and been to continue As markets total our COVID. prior and is now strengthen, audience XX% on-air where activities our was has

growing In to digital show our addition on-air continues audience and content great strategy our share, success. to

by company. Our our impressions the digital digital impressions XX% XX% year-over-year quarter-to-quarter, and for quarter over biggest in the ever for quarter second grew

of Now, three the in can me update scale appeal, platform. have skills, our a ranked esports a game this completed event non-tutor, let and in you be and XXXX COVID since the we and a mainstream give expand allow every in the compete game is Rocket virtually easy-to-understand us first presently world X live our will July. Furthermore, on younger that because PG-friendly Houston and delivering number audience, to and Outlaws we West device, our on quick game a it We selected that has into and are game. League. We more expanding played in to

a never values So platform important. to unique been local our we year, celebrate conclude, produces anniversary XXth are more this we company core, our have as family multimedia that At level our content.

we remained I founded to their XXXX audiences Overall, what as the so the their brands quarter, connect your teams our time and strategic not content proud George our our flow. local revenue as priorities, questions. leaseback. I in delivering and communities. true, cash in in and our a our the only do saw Our business improvements think reflected diversifying the entrepreneurship teams the our and of all us has artist on great And but world as sports so makes positive am much for past creating today. of since free expanding hardworking you Marie, favorite changed I much innovation, has local And exceptional have to year, of culture across commitment and we few line, this thank revenue,

Marie Tedesco

do. We

We have handful of a questions.

The is first one third compared is, to how pacing quarter XXXX?

Caroline Beasley

are quarter X% Third XXXX at compared looking to at we XXXX about pacing being this that to point.

of in quarter. of NTR that was at today was second second XXXX, by we’re In that course XX%, XX%. by digital And about increases quarter driven pacing from down XX% in looking about about of terms and spot and down on offset

to compared come Now back for these assuming NTR we and come down are XXXX quarter, be will events to will us third X% and back.

at a if out So point. that’s big there this

Marie Tedesco

Great. an update our The asking question is next on PPP forgiveness. for loan

call. the So an somewhat process, provide longer you I question can our contribution providing PPP can the and application be on of share we events? of next next update our if was that color of earnings filed couple a forgiveness forgiveness is weeks application is This ago. some on loan a we will with The

Caroline Beasley

Yes.

that total XXXX, $XX So for in over X% accounted a revenue, events of little about our and million. was

accounted event for had quarter, or second revenue. of mentioned, So of X% million. that $X as almost just quarter total second ‘XX, we in in And I no literally

And $X Third of for ‘XX almost fourth almost revenue quarter, in it event accounted million. quarter $X accounted for million.

So revenue. back, between revenue helping able being to we that XXXX XXXX reduced and digital assuming with in is this come can also see the and us gap growth

Marie Tedesco

Great.

to to shift is, in Next are listeners you see question continuing a digital?

Caroline Beasley

this a over-the-air. actually shift we point, seeing are At back to

being our earlier our comments we want want listening. have our my the we our listeners, in today, ecosystem. XX% said, mentioned just audience public own I when That As compare back of over-the-air you in users we

and over multiple air, by new is the line, with So to then fine that digital like in also whether owned or also, listening and listeners. and addition app we And attract can digitally would And us. our that our are doing in be they’re on channels our channels we that, operated to with site. found with

Odyssey. on also are We

are We on iHeart.

Alexa. we TuneIn. onsite of on can And found are We course, be

Marie Tedesco

Great. Thank you.

steps. the and cost the On reductions Next question is these how original XXXX permanent? So XXXX be much reductions please I describe of the take on nature will $X cost of will that. also basis, an cost They annual the cuts the from in market two done of of X we XXXX And an were totaled months million. $XX that, savings top first additional of cost in million. had

when last Approximately So or our is do you of $XX XXXX. to were savings pre-COVID Caroline, and a million XX% revenue total to cuts those million came anticipate in cuts And permanent. level? the we $X rebound have, question

Caroline Beasley

Yes.

we do And is we will compared back we to our we pre-COVID at see that and but realistically, look be leverage to operating take to once take we pre-COVID, that it would XXXX. And we a dividends level come with then near-term, point seeing coming our take at could events revenue at NTR That being where back are point. levels revenue we comfortable, will operations would look dividends. if look at these back, normalized feel be also and Assuming anticipate income come start a a like leverage. that a will said,

Marie Tedesco

we you. have. the questions And Thank all that’s

Caroline Beasley

have as Hope call much to very feel And your you please Thank day. for a great Alright. or Marie always, you all myself. time. free

Operator

concludes Thank This you, today’s and teleconference. ladies gentlemen.

You may now disconnect.

Caroline Beasley	Chief Executive Officer
Marie Tedesco	Chief Financial Officer

Beasley Broadcast (BBGI) 7 Aug 212021 Q2 Earnings call transcript