Earnings call transcript Q1 2023

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Operator

Good morning, and welcome to Beasley Broadcast Group's First Quarter 2023 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 this morning's news announcement 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 section can copy press of on You of the

this Broadcast like to would Please time, the At over conference go to ahead. your CEO, Group's turn Beasley Caroline Beasley. host, I

Caroline Beasley

us and results. joining we Marie this CFO, with review you, Tedesco, you will Doug, everyone, morning. thank first earnings helpful. presentation and an find website, that me per post release, morning. our did good Thank our our And morning, XXXX Good and our for it to operating earnings hope as quarter is on we you

I'm QX, thrilled local build the we results, growth are we business again, to initiatives, achieving digital growing based board, digital growth in talent betting year-over-year highlights from to results the strategy revenue revenue strong quarter new our which, the growth by generated and across on sports driven significant leverage and our platform. the share success our initiatives, our first to network increased In category.

over-the-air X%, quarter basis. which offset revenue year-over-year almost and spot strategically growth last SOI was EBITDA performance on the decline call, solid the increasing XX%, political planned we up drove XX%. a our earnings with first and in X.X%, revenue digital provided revenue on guidance network grew Total XXXX, up strong outpacing to local was Our from

audio revenue national expected, slightly. and spot declined As increased revenue overall remained while XX%, challenged

$X.X betting brought initiatives the that's added sports New to year-over-year. and quarter, million XX% up million $X.X year-over-year,

XX% X by Boston year-over-year revenue gains delivering including broad-based sports a year-over-year driven with overall markets in XX were Our betting. of growth increases,

X and New Massachusetts Bruins Super including calls, XX XX.X The the sports Celtics. January the QX and Hub, Madness. market in well Sports England and As noted positioned Bowl We're Patriots, benefit with and to Boston Boston on the of previous home commenced FMs, saw betting in the March on Boston

QX ago the transformation, That's XX.X% and our the in success year-over-year total to quarter. Now moving digital ongoing represented year revenue XX.X% first of digital XX.X% on revenue. from of grew up

continued digital are for goal to we and XX% total revenue. of on initiatives way results, achieving Our our drive our digital of accounting XX% to great to well

past by revenue creation QX, web as was in our from as our Guarantee rollout over-the-air quarters, Xst digital the exceeding growth, make ultimately margins. we recent content margins margins to as driven or in services initiative the white agency, in increasing headway With our goal growth traditional the of Digital. March and continue acquisition with of label our digital consistent Digital matching well

January was Now the was breaking trends, down quarter up X% was year-over-year. X.X% March flat, February up and

March show did year, the it was and in include this home included Tampa April. year last Now

solid results related growth, QX our we our our reflection levels hard-working to directly the a brand's of strong we to diversify streams revenue retained achieved efforts have These are QX presence with have. in business results are team Importantly, great testament and well the 'XX. truly at as to a local as

category. this recorded of $X.X betting, the of Detroit betting in from million, million and prior recorded Sports Now or the $X.X touching driven year. or million was revenue total up Philly our That's sports betting X.X% quarter. we for of revenue revenue with cluster by $XXX,XXX combined sports Bolton on XX% revenue $X.X

was as slightly established in year-over-year expected market. lower that's Now the sports betting

of from expenses headcount X.X% of which a from stemming more cost agency the year-over-year, acquisition digital and other sales increased revenue new in expenses our operating including reduction than XXXX the directly increase, to related and quarter reductions offset expense First expenses costs.

able SOI revenue X.X%. million to revenue the increased were same-station Same-station X.X% as leverage the we quarter or year-over-year $X.X increased down year-over-year expenses quarter. XX% and $X.X First million in SOI growth were to increased Same-station XX.X%.

we of outlook, conditions remain bonds take positive growing advantage strong our our determine should trading monitoring EBITDA. to actively on hyper market we by and reducing our We're when focused With organically below also leverage results par.

to And quarter. with over give more Marie? that, you I'm and going to she's the details to turn on going it Marie,

Marie Tedesco

will good Thanks, of sheet. an first quarter and update morning, review Caroline, everyone. results, by I balance followed our

and First $X.X where revenue from in in million increased quarter revenue esports includes our to which eight Boston, X.X% teams. million $XX.X net year-over-year. $X.X increased revenues or million, $XXX,XXX year-over-year grew We notably markets most

of we $X.X XXXX for stream and SOI quarter to $XX to million, million or grew $XX.X grow year-over-year approximately XX%. resulting $XXX,XXX of $X.X continue now this expenses or our total an the for revenue XX.X% to the diversify revenue a up as Digital and of million increased double-digits quarter increase Station X.X% million, operating represents revenue revenues quarter sources. first

down adjustment plus credit year-over-year Breaking added bad variance operating were a in in the expenses, increase our a from the directly increase quarter the first expenses which of $X.X addition debt million, cost drivers that Guarantee Digital, agency, of revenue white related of to of the the and main occurred XXXX. new label sales

category a largest our increase our revenue year-over-year at at remained X% consumer quarter, first Looking total revenue categories in category this revenue, of revenue the XX% and services quarter. during for our we drove

revenues. the category jump driven by $X.X Our with quarter. second betting grew largest for accounted million and X.X% for which was entertainment, XX% total sports year-over-year This was of partly

total improve continue revenue. up category of number in fourth our around of half auto our total We We X.X% the revenue of Retail move increases we Boston. and first in for throughout year. X.X% quarter year-over-year Auto, accounted three, X.X% this category increased retail including to as the year-over-year. saw and markets, will XX% saw revenue category, largest represents revenues believe

a G&A rounded the representing revenues X%. and or top down year-over-year The of corporate increased In out our related expenses. compared and year spot categories for X.X%, X.X% in was, total XX%, six and up G&A telecom, increased financial digital Corporate expenses was fifth services the quarter quarter ago some to $X.X $XXX,XXX cybersecurity to same by increase to is million. expenses corporate

we benefit for tax income Non-cash stock-based of had the quarter, compensation $X.X an for quarter decreased the $XX,XXX to million. and $XXX,XXX

First ago EBITDA to year quarter, million operating quarter. to prior a a as the increase year positive well $X.X due quarter in compared income negative to million a as $X.X in largely XXXX the in increased million $XXX,XXX charge impairment $X.X the

first our million, the Total outstanding debt to interest $X.X quarter year-over-year expense and of at $XXX quarter decreased first end $XXX,XXX was million.

Additionally, we on an approximately February of $XX.X payment million made interest X.

X.XX add-backs, up agency our million. acquisition non-cash EBITDA our agency was certain $X.X quarter digital for compensation, as and leverage, XXXX quarter taxes, losses to such XXXX risk first to from the previous adjusted from XXXX forma or year XX.X% including of LTM net our pro build-out, times. $XXX,XXX decreased

point first build we ended XXXX payment operations our and million, on made February cash. cash $XX.X quarter with that continuing million of with million, up while we fourth from generating hand on with in and cash to we $XX.X hand I'm as $XX.X ended quarter out happy still to cash of interest an of are

cash, Our as our first seasonal, quarter same with operations, always low. are

Now free second expect flow. we year and cash quarter, full XXXX third provide quarter fourth positive the of to quarter,

current balance focused and therefore, us the flexibility reduce hyper allow which Our on. our will - also leverage, to cash are reduce we our debt,

was quarter were capital replacements Our the transmitters. of million. to quarter XXXX upgrades of to first $X.X and for $X.X compares mostly million, which related spend That CapEx expenditures

$X around XXXX normalize to spend in to CapEx our expect million $X at million We

And with it to I'll turn that, back Caroline.

Caroline Beasley

and our our our continued with I'm quarter Thanks, positive Marie. it business. performance digital the reflects first as growth afforded Again, pleased diversification by very

in XX% 'XX, our quarter. put for strategy in content growth digital helped Our mid the place to revenue drive

this So we're excited through continue about very we 'XX. opportunity as

'XX. owned growth. our in and operated Notably, local grew tremendous the first reach Beasley's drive quarter, period to audience multi-platform, in to And content XX% compared strategy same continues audience the

continue radio XX-XX. hold the of Nielsen, to markets in our share large both market the diary key with where markets and adults our positions Our brands grew in dominant demographics - midsized

share year-over-year, up by growth Overall, X% market share year-over-year. and by market our grew average PPM X% Our diary grew by XX%. share our is

digital largest audience unique other assets, to was with However, from growth XX% O&O our like the recent QX, 'XX seen increasing QX, 'XX. use on quarters,

now continue. total led year-over-year, and digital we of This for of and expect audience, sellable this XX% impressions growth audience XX% a accounts to trend to digital increase monthly Beasley's

and the net growing strong improving flow. impact the we're recession, maintaining of cash measuring the back potential of driving a into focus audience and flexible second quarter margins, balance free remains reducing our and looking Now, expansion, half We're that. on and into revenue and leverage diversification taking sheet, towards 'XX, a steps

revenue slightly And pacing our down, is down breaking X%, down. of X%. and As is second down May June is quarter X% April that today, with up

March However, we're home pacing. this inclusive is of this 'XX was in the were not also when mentioned I was about 'XX, year. March held that in we in held which earlier SPLASH year, WiLD May to And had April this then talking that and doing show of

be would adjust you pacing the quarter. these, for up if flat terms slightly of we for of in second each to quarter, during So

will a pacing We to are quarter our into saw the the of half of slowdown continue in second further latter improve quarter 'XX. hopeful moving as that we

So and increases recession. quarters, we're delivered a of potential the including interest rate last against results proud several have even over the labor we inflation, strong challenges, headwinds,

our than years, our we proves have And as transformation serve, and teams the a XX the great the of future. understanding within operating digital that company challenges we ready local season for company the more and a are for markets

corporate of to thank today. So listening personnel, on our our call behalf you for station we and

were into submitted we did go questions Marie, And few that have a so those. we'll

Marie Tedesco

into Great. those, move We will

remarks prepared source? could question So break was revenue is, by down addressed our you in the that pacing first not

Caroline Beasley

Yes, so quarter. did we go first our through

is quarter. For like first trending second second quarter, just quarter

down is slightly. So pacing local National up is digital and pacing then is up. double-digits, pacing

Marie Tedesco

quarter adjusted LTM? was in 'XX, and 'XX what first EBITDA first And the quarter

that. take I'll So

quarter And XXXX also adjusted $X of adjusted was of first EBITDA first was million. XXXX, Our EBITDA quarter in million. $X in

includes months to as million. XX impression question in certain are what our backs quarter remarks. The next end digital at pricing latest Again, trend? you this first respect seeing XXXX with prepared was adjusted Our of $XX.X is, earlier add the described EBITDA

Caroline Beasley

we So our like other seasonal just, digital CPMs business that see. are

that a supply because demand. typically back impressions come QX, in are seeing programmatic QX. drop especially today, are but crowded digital in Also, there's off of more and So we

in proposed our We impressions have integrated O&O our [indiscernible].

to able to page the of content more, of market. And is where official. that, views. is achieve to we higher it able when more part And do easier more to we're whole the still then so This include strategy that five we're tune which CPM sell to makes times direct impressions, to our six

that. of benefit the seeing be to going we're So

Marie Tedesco

Great, selling would consider non-core you assets?

Caroline Beasley

assets. are considering non-core we selling Yes,

Marie Tedesco

then million our XXXX, last And all review be how much you costs cost done? question, the cash $XX And savings the initiative? hit and could

these which acquisition, of of cost the first XXXX. we for closed three costs reduction, savings A by in well that's benefit Half $X newly headcount increased sales of And of offset was first the quarters question. the XXXX. the that expenses increased our which or be the all million and from all, as fourth see quarter these as were So second we of realized will Caroline, agency at added will in of on cash concludes cost XXXX. portion submitted savings savings end from revenue our quarter

Caroline Beasley

Right, well speaking to very for thank and you attending, we you quarter. next look much forward with

or feel Marie have free you reach any myself. If to Thank to you. out other questions,

Marie Tedesco

you. Thank

Operator

and conclude participation. Ladies today's you your for gentlemen, Thank this teleconference. does

You this lines may have your day. at wonderful and a disconnect time,

Beasley Broadcast (BBGI) 26 Apr 232023 Q1 Earnings call transcript