Beasley Broadcast Group, Inc. (Nasdaq: BBGI) (“Beasley” or the
“Company”), a multi-platform media company, today announced
operating results for the three- and twelve-month periods ended
December 31, 2020.
The results presented herein reflect actual
results including the operations of WDMK-FM in Detroit since its
acquisition in August 2019.
Summary of Fourth Quarter and Year-End
Results
In millions, except per share data |
Three Months EndedDecember
31, |
Year EndedDecember 31, |
|
2020 |
2019 |
2020 |
2019 |
Net revenue |
$68.5 |
$72.1 |
$206.1 |
|
$261.6 |
Operating income (loss) 1 |
19.6 |
11.2 |
(4.3 |
) |
38.1 |
Net income (loss) 1 |
11.0 |
4.7 |
(18.9 |
) |
13.4 |
Net income (loss) per diluted share 1 |
$0.38 |
$0.17 |
($0.63 |
) |
$0.48 |
Station operating income (SOI - non-GAAP) |
20.1 |
15.6 |
24.0 |
|
60.4 |
- Operating income, net income and
net income per diluted share reflect a $4.4 million gain on
dispositions, $3.6 million in other operating income and $2.2
million of non-cash impairment losses in the three months ended
December 31, 2020, as well as a $17.1 million gain on dispositions
and $13.7 million of non-cash impairment losses in the three months
ended December 31, 2019. For the full year, operating income
(loss), net income (loss) and net income (loss) per diluted share
reflect a $4.4 million gain on dispositions, $3.0 million in other
operating income, $9.0 million of non-cash impairment losses and a
$2.8 million loss on modification of long-term debt in the twelve
months ended December 31, 2020, as well as a $20.7 million gain on
dispositions and $13.7 million of non-cash impairment losses for
the twelve months ended December 31, 2019.
Net revenue during the three months ended
December 31, 2020 primarily reflects a year-over-year decrease in
commercial advertising revenue due to the impact of the COVID-19
pandemic, partially offset by growth in digital, esports and
political revenue.
Beasley reported operating income of $19.6
million in the fourth quarter of 2020 compared to operating income
of $11.2 million in the fourth quarter of 2019, largely reflecting
the year-over-year increase in Station Operating Income (SOI, a
non-GAAP financial measure), in addition to lower operating and
corporate expenses, lower impairment losses, a $4.4 million gain on
dispositions related to a land sale and $3.6 million in other
operating income, partially offset by higher depreciation and
amortization expense.
Beasley reported net income of $11.0 million, or
$0.38 per diluted share, in the three months ended December 31,
2020, compared to net income of $4.7 million, or $0.17 per diluted
share, in the three months ended December 31, 2019. The
year-over-year increase was primarily due to the aforementioned
decline in total operating expenses, as well as the gain on the
land sale and other operating income.
SOI increased 28.8% to $20.1 million in the
fourth quarter of 2020 compared to $15.6 million in the fourth
quarter of 2019. The year-over-year increase is primarily
attributable to Beasley’s expense control initiatives to address
the COVID-19 pandemic resulting in lower operating expenses , as
well as the benefit of an increase in political revenue.
Please refer to the “Calculation of SOI” and
“Reconciliation of Net Income (Loss) to SOI” tables at the end of
this announcement for a discussion regarding SOI calculations.
Commenting on the financial results, Caroline
Beasley, Chief Executive Officer, said, “Beasley’s 2020 fourth
quarter financial results reflect the ongoing recovery of our
business and solid execution by our teams in generating sequential
quarter-over-quarter revenue growth that exceeded the high-end of
the preliminary range we announced in January. During the quarter,
we continued to navigate the ongoing pandemic-related challenges
exceptionally well. The meaningful actions we have taken over the
past nine-months, including reducing station operating expenses and
negotiating discounts with service providers and partners, resulted
in 28.8% year-over-year growth in SOI and improved SOI margin as
well as a 62.4% increase in station operating income less corporate
expenses. In addition, despite the pandemic and restrictions in
certain markets, we generated fourth quarter free cash flow of
$16.8 million, inclusive of the $4.6 million net gain from
dispositions, which compares very favorably to the $20.7 million of
free cash flow in the year ago period which benefited from $21.8
million in dispositions.
“Record fourth quarter net political revenue of
$10.2 million, combined with the resumption of advertising in key
categories, drove year-over-year revenue increases in six of our
station clusters. Excluding political revenue, Beasley continued to
generate sequential month-over-month revenue growth, with October
up 8.3% over September and November up 2.0% over October, while
December paced slightly behind November due to a tightening of
COVID-19 restrictions in certain markets. Notably, our continued
emphasis on strong local content drove best-in-industry ratings
performance for our station clusters in the fourth quarter,
according to Nielsen, and our cumulative on-air audience share has
grown consistently since March.
“The improvement in fourth quarter advertising
trends and our ability to capture strong shares of political
spending in our markets was complemented by positive results from
Beasley’s digital and esports investments, which have been less
impacted by the pandemic. Fourth quarter digital revenue rose 7.6%
year-over-year to $7.3 million and accounted for approximately
10.6% of total fourth quarter revenue, compared to 9.2% of total
revenue in the prior year period.
“Total outstanding debt as of December 31, 2020
was $268.5 million. In early February, we closed on our offering of
$300.0 million in aggregate principal amount of 8.625% Senior
Secured Notes due 2026. The net proceeds of the offering were used
to repay in full existing indebtedness under the Company’s senior
secured credit facilities and other debt, with the remaining
proceeds added to our balance sheet for general corporate purposes.
We believe this transaction improves our liquidity profile and
provides growth capital as we continue to diversify our business,
revenue and cash flows to higher growth areas.
“Year-over-year advertising revenue declines,
while moderating, have continued in the 2021 first quarter, as the
first two months of the comparable 2020 period were not impacted by
the pandemic. However, we remain optimistic that the commercial
advertising market will return to more normalized revenue levels as
we move further into the year, following broad vaccine
distribution.
“While the last ten months presented
unprecedented challenges for ad-reliant businesses, I am extremely
proud of the way our corporate and station level leaders and valued
team members rose to the occasion and worked tirelessly to enable
Beasley to generate positive cash flow and return to profitability
in the fourth quarter of 2020. In 2021, our strategic priorities
remain focused on delivering exceptional content and services to
our listeners, advertisers, online users and esports fans, while
diversifying our revenue, growing our cash flow and maintaining a
solid and flexible balance sheet with liquidity at current or
higher levels. We believe the experience of our team and
competitive positions in our markets, combined with the steps we
have taken to reduce costs and improve operating efficiencies,
position Beasley Broadcast Group well for near- and long-term
success, particularly as economic trends improve later this
year.”
Conference Call and Webcast Information
The Company will host a conference call and
webcast today, February 10, 2021, at 11:00 a.m. ET to discuss its
financial results and operations. To access the conference call,
interested parties may dial 334-777-6978, conference ID 3652070
(domestic and international callers). Participants can also listen
to a live webcast of the call at the Company’s website at
www.bbgi.com. Please allow 15 minutes to register and download and
install any necessary software. Following its completion, a replay
of the webcast can be accessed for five days on the Company’s
website, www.bbgi.com.
Questions from analysts, institutional investors
and debt holders may be e-mailed to ir@bbgi.com at any time up
until 9:00 a.m. ET on Wednesday February 10, 2021. Management will
answer as many questions as possible during the conference call and
webcast (provided the questions are not addressed in their prepared
remarks).
About Beasley Broadcast
GroupCelebrating its 60th anniversary this year, the
Company was founded in 1961 by George G. Beasley, who remains the
Company’s Chairman of the Board. The Company owns and operates 63
stations (47 FM and 16 AM) in 15 large- and mid-size markets in the
United States. Approximately 20 million consumers listen to the
Company’s radio stations weekly over-the-air, online and on
smartphones and tablets, and millions regularly engage with the
Company’s brands and personalities through digital platforms such
as Facebook, Twitter, text, apps and email. The Company recently
acquired a majority interest in the Overwatch League’s Houston
Outlaws esports team and owns BeasleyXP, a national esports content
hub. For more information, please visit www.bbgi.com.
DefinitionsStation Operating
Income (SOI) consists of net revenue less station operating
expenses. We define station operating expenses as cost of services
and selling, general and administrative expenses.
Free Cash Flow (FCF) consists of SOI less
corporate expenses, interest expense, current income tax expense
and capital expenditures plus stock-based compensation expense, net
proceeds from dispositions, amortization of debt issuance costs and
interest income.
SOI and FCF are measures widely used in the
radio broadcast industry. The Company recognizes that because SOI
and FCF are not calculated in accordance with GAAP, they are not
necessarily comparable to similarly titled measures employed by
other companies. However, management believes that SOI and FCF
provide meaningful information to investors because they are
important measures of how effectively we operate our business
(i.e., operate radio stations) and assist investors in comparing
our operating performance with that of other radio companies.
Note Regarding Forward-Looking
StatementsStatements in this release that are
“forward-looking statements” are based upon current expectations
and assumptions, and involve certain risks and uncertainties within
the meaning of the U.S. Private Securities Litigation Reform Act of
1995. Words or expressions such as “intends,” “believes,”
“expects,” “seek,” “we remain optimistic that” or variations of
such words and similar expressions are intended to identify such
forward-looking statements. Forward-looking statements by their
nature address matters that are, to different degrees, uncertain.
Key risks are described in the Company’s reports filed with the
Securities and Exchange Commission (“SEC”) including its annual
report on Form 10-K and quarterly reports on Form 10-Q. Readers
should note that forward-looking statements are subject to change
and to inherent risks and uncertainties and may be impacted by
several factors, including:
- the effects of the COVID-19 pandemic, including its potential
effects on the economic environment and our results of operations,
liquidity and financial condition, and the increased risk of
impairments of our Federal Communications Commission (“FCC”)
licenses and/or goodwill, as well as any changes to federal, state
or local government laws, regulations or orders in connection with
the pandemic;
- external economic forces that could have a material adverse
impact on our advertising revenues and results of operations;
- the ability of our radio stations to compete effectively in
their respective markets for advertising revenues;
- our ability to develop compelling and differentiated digital
content, products and services;
- audience acceptance of our content, particularly our radio
programs;
- our ability to respond to changes in technology, standards and
services that affect the radio industry;
- our dependence on federally issued licenses subject to
extensive federal regulation;
- actions by the FCC or new legislation affecting the radio
industry;
- our dependence on selected market clusters of radio stations
for a material portion of our net revenue;
- credit risk on our accounts receivable;
- the risk that our FCC licenses and/or goodwill could become
impaired;
- our substantial debt levels and the potential effect of
restrictive debt covenants on our operational flexibility and
ability to pay dividends;
- the potential effects of hurricanes on our corporate offices
and radio stations;
- the failure or destruction of the internet, satellite systems
and transmitter facilities that we depend upon to distribute our
programming;
- disruptions or security breaches of our information technology
infrastructure;
- the loss of key personnel;
- our ability to integrate acquired businesses and achieve fully
the strategic and financial objectives related thereto and their
impact on our financial condition and results of operations;
- the fact that we are controlled by the Beasley family, which
creates difficulties for any attempt to gain control of the
Company; and
- other economic, business, competitive, and regulatory factors
affecting the businesses of the Company, including those set forth
in the Company’s filings with the SEC.
Our actual performance and results could differ
materially because of these factors and other factors discussed in
our SEC filings, including but not limited to our annual reports on
Form 10-K or quarterly reports on Form 10-Q, copies of which can be
obtained from the SEC, www.sec.gov, or our website, www.bbgi.com.
All information in this release is as of February 10, 2021, and we
undertake no obligation to update the information contained herein
to actual results or changes to our expectations.
-tables follow-
BEASLEY BROADCAST GROUP,
INC.Consolidated Statements of Operations (Unaudited)
|
Three months ended |
|
Year ended |
|
December 31, |
|
December 31, |
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
Net revenue |
$ |
68,460,644 |
|
|
$ |
72,093,111 |
|
|
$ |
206,143,861 |
|
|
$ |
261,554,114 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
Operating expenses (including stock-based compensation and
excluding depreciation and amortization shown separately
below) |
|
48,313,273 |
|
|
|
56,452,577 |
|
|
|
182,181,555 |
|
|
|
201,107,084 |
|
Corporate expenses (including stock-based compensation) |
|
3,677,698 |
|
|
|
5,496,797 |
|
|
|
15,628,370 |
|
|
|
21,209,432 |
|
Transaction expenses |
|
- |
|
|
|
407,011 |
|
|
|
- |
|
|
|
768,945 |
|
Depreciation and amortization |
|
2,721,710 |
|
|
|
1,970,974 |
|
|
|
11,096,937 |
|
|
|
7,349,682 |
|
Impairment losses |
|
2,166,400 |
|
|
|
13,657,941 |
|
|
|
8,970,812 |
|
|
|
13,657,941 |
|
Gain on dispositions |
|
(4,439,710 |
) |
|
|
(17,111,605 |
) |
|
|
(4,439,710 |
) |
|
|
(20,657,360 |
) |
Other operating (income) expense, net |
|
(3,600,000 |
) |
|
|
- |
|
|
|
(3,000,000 |
) |
|
|
- |
|
Total operating expenses |
|
48,839,371 |
|
|
|
60,873,695 |
|
|
|
210,437,964 |
|
|
|
223,435,724 |
|
Operating income (loss) |
|
19,621,273 |
|
|
|
11,219,416 |
|
|
|
(4,294,103 |
) |
|
|
38,118,390 |
|
Non-operating income
(expense): |
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
(4,313,701 |
) |
|
|
(4,488,586 |
) |
|
|
(16,894,407 |
) |
|
|
(18,032,669 |
) |
Loss on modification of long-term debt |
|
- |
|
|
|
- |
|
|
|
(2,798,789 |
) |
|
|
- |
|
Other income (expense), net |
|
32,070 |
|
|
|
34,568 |
|
|
|
88,030 |
|
|
|
(246,155 |
) |
Income (loss) before income taxes |
|
15,339,642 |
|
|
|
6,765,398 |
|
|
|
(23,899,269 |
) |
|
|
19,839,566 |
|
Income tax expense
(benefit) |
|
4,304,900 |
|
|
|
2,331,124 |
|
|
|
(5,185,992 |
) |
|
|
6,597,751 |
|
Income (loss) before equity in earnings of unconsolidated
affiliates |
|
11,034,742 |
|
|
|
4,434,274 |
|
|
|
(18,713,277 |
) |
|
|
13,241,815 |
|
Equity in earnings of
unconsolidated affiliates, net of tax |
|
(70,164 |
) |
|
|
283,205 |
|
|
|
(160,879 |
) |
|
|
141,827 |
|
Net income (loss) |
|
10,964,578 |
|
|
|
4,717,479 |
|
|
|
(18,874,156 |
) |
|
|
13,383,642 |
|
Earnings attributable to
noncontrolling interest |
|
226,420 |
|
|
|
66,582 |
|
|
|
1,108,234 |
|
|
|
66,582 |
|
Net income (loss) attributable to BBGI stockholders |
$ |
11,190,998 |
|
|
$ |
4,784,061 |
|
|
$ |
(17,765,922 |
) |
|
$ |
13,450,224 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income (loss) per
share |
$ |
0.38 |
|
|
$ |
0.17 |
|
|
$ |
(0.63 |
) |
|
$ |
0.49 |
|
Diluted net income (loss) per
share |
$ |
0.38 |
|
|
$ |
0.17 |
|
|
$ |
(0.63 |
) |
|
$ |
0.48 |
|
Basic common shares
outstanding |
|
29,276,454 |
|
|
|
27,800,521 |
|
|
|
28,386,456 |
|
|
|
27,730,392 |
|
Diluted common shares
outstanding |
|
29,293,120 |
|
|
|
27,833,174 |
|
|
|
28,386,456 |
|
|
|
27,777,850 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Balance Sheet Data -
Unaudited(in thousands)
|
December 31, |
|
December 31, |
|
2020 |
|
2019 |
Cash and cash equivalents |
$ |
20,759 |
|
$ |
18,648 |
Working capital |
|
37,065 |
|
|
26,466 |
Total assets |
|
738,614 |
|
|
760,060 |
Long term debt, net of current
portion and unamortized debt issuance costs |
|
258,345 |
|
|
248,712 |
Stockholders' equity |
$ |
267,727 |
|
$ |
284,539 |
Selected Statement of Cash Flows Data –
Unaudited
|
Year ended |
|
December 31, |
|
|
2020 |
|
|
|
2019 |
|
Net cash provided by operating
activities |
$ |
4,214,316 |
|
|
$ |
20,991,224 |
|
Net cash used in investing
activities |
|
(3,845,616 |
) |
|
|
(4,955,046 |
) |
Net cash provided by (used in)
financing activities |
|
1,742,561 |
|
|
|
(10,821,835 |
) |
Net increase in cash and cash
equivalents |
$ |
2,111,261 |
|
|
$ |
5,214,343 |
|
Calculation of SOI
|
Three months ended |
|
Year ended |
|
December 31, |
|
December 31, |
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
Net revenue |
$ |
68,460,644 |
|
|
$ |
72,093,111 |
|
|
$ |
206,143,861 |
|
|
$ |
261,554,114 |
|
Operating expenses |
|
(48,313,273 |
) |
|
|
(56,452,577 |
) |
|
|
(182,181,555 |
) |
|
|
(201,107,084 |
) |
SOI |
$ |
20,147,371 |
|
|
$ |
15,640,534 |
|
|
$ |
23,962,306 |
|
|
$ |
60,447,030 |
|
Reconciliation of Net Income (Loss) to SOI
|
Three months ended |
|
Year ended |
|
December 31, |
|
December 31, |
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
Net income (loss) |
$ |
11,190,998 |
|
|
$ |
4,784,061 |
|
|
$ |
(17,765,922 |
) |
|
$ |
13,450,224 |
|
Corporate expenses |
|
3,677,698 |
|
|
|
5,496,797 |
|
|
|
15,628,370 |
|
|
|
21,209,432 |
|
Transaction expenses |
|
- |
|
|
|
407,011 |
|
|
|
- |
|
|
|
768,945 |
|
Depreciation and
amortization |
|
2,721,710 |
|
|
|
1,970,974 |
|
|
|
11,096,937 |
|
|
|
7,349,682 |
|
Impairment losses |
|
2,166,400 |
|
|
|
13,657,941 |
|
|
|
8,970,812 |
|
|
|
13,657,941 |
|
Gain on dispositions |
|
(4,439,710 |
) |
|
|
(17,111,605 |
) |
|
|
(4,439,710 |
) |
|
|
(20,657,360 |
) |
Other operating (income)
expenses, net |
|
(3,600,000 |
) |
|
|
- |
|
|
|
(3,000,000 |
) |
|
|
- |
|
Interest expense |
|
4,313,701 |
|
|
|
4,488,586 |
|
|
|
16,894,407 |
|
|
|
18,032,669 |
|
Loss on modification of
long-term debt |
|
- |
|
|
|
- |
|
|
|
2,798,789 |
|
|
|
- |
|
Other (income) expense,
net |
|
(32,070 |
) |
|
|
(34,568 |
) |
|
|
(88,030 |
) |
|
|
246,155 |
|
Income tax expense
(benefit) |
|
4,304,900 |
|
|
|
2,331,124 |
|
|
|
(5,185,992 |
) |
|
|
6,597,751 |
|
Equity in earnings of
unconsolidated affiliates |
|
70,164 |
|
|
|
(283,205 |
) |
|
|
160,879 |
|
|
|
(141,827 |
) |
Earnings attributable to
noncontrolling interest |
|
(226,420 |
) |
|
|
(66,582 |
) |
|
|
(1,108,234 |
) |
|
|
(66,582 |
) |
SOI |
$ |
20,147,371 |
|
|
$ |
15,640,534 |
|
|
$ |
23,962,306 |
|
|
$ |
60,447,030 |
|
Reconciliation of Net Revenue to FCF
|
Three months ended |
|
Year ended |
|
December 31, |
|
December 31, |
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
Net revenue |
$ |
68,460,644 |
|
|
$ |
72,093,111 |
|
|
$ |
206,143,861 |
|
|
$ |
261,554,114 |
|
Operating expenses |
|
(48,313,273 |
) |
|
|
(56,452,577 |
) |
|
|
(182,181,555 |
) |
|
|
(201,107,084 |
) |
Corporate expenses |
|
(3,677,698 |
) |
|
|
(5,496,797 |
) |
|
|
(15,628,370 |
) |
|
|
(21,209,432 |
) |
Net proceeds from
dispositions |
|
4,631,566 |
|
|
|
21,848,435 |
|
|
|
4,631,566 |
|
|
|
25,422,201 |
|
Stock-based compensation
expense |
|
55,999 |
|
|
|
384,020 |
|
|
|
750,670 |
|
|
|
2,118,718 |
|
Interest expense |
|
(4,313,701 |
) |
|
|
(4,488,586 |
) |
|
|
(16,894,407 |
) |
|
|
(18,032,669 |
) |
Amortization of debt issuance
costs |
|
473,668 |
|
|
|
483,983 |
|
|
|
1,915,302 |
|
|
|
1,935,932 |
|
Interest income |
|
410 |
|
|
|
30,029 |
|
|
|
28,149 |
|
|
|
123,726 |
|
Current income tax
expense |
|
- |
|
|
|
(5,601,764 |
) |
|
|
- |
|
|
|
(8,274,105 |
) |
Capital expenditures |
|
(480,563 |
) |
|
|
(2,128,782 |
) |
|
|
(7,477,182 |
) |
|
|
(9,030,025 |
) |
FCF |
$ |
16,837,052 |
|
|
$ |
20,671,072 |
|
|
$ |
(8,711,966 |
) |
|
$ |
33,501,376 |
|
CONTACT: |
|
B. Caroline Beasley |
Joseph Jaffoni, Jennifer Neuman |
Chief Executive Officer |
JCIR |
Beasley Broadcast Group, Inc. |
212/835-8500 or bbgi@jcir.com |
239/263-5000 or ir@bbgi.com |
|
Beasley Broadcast (NASDAQ:BBGI)
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