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, 2019.
The results presented herein reflect actual
results including the operations of WXTU-FM in Philadelphia since
its acquisition in September 2018 and WDMK-FM in Detroit since its
acquisition in August 2019.
|
Summary of Fourth Quarter Results |
In millions, except per share data |
Three Months EndedDecember
31, |
Year EndedDecember 31, |
|
2019 |
2018 |
2019 |
2018 |
Net revenue |
$72.1 |
$75.6 |
$261.6 |
$257.5 |
Operating income 1 |
11.2 |
13.9 |
38.1 |
34.3 |
Net income 1 |
4.8 |
2.1 |
13.5 |
6.5 |
Net income per diluted share 1 |
$0.17 |
$0.08 |
$0.48 |
$0.24 |
Station operating income (SOI - non-GAAP) |
15.6 |
20.6 |
60.4 |
61.7 |
|
1 Operating income, net income and net income per diluted
share reflect 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, net income
and net income per diluted share reflect a $4.4 million charge due
to the change in fair value of contingent consideration in the
twelve months ended December 31, 2018, a $20.7 million gain on
dispositions and $13.7 million of non-cash impairment losses for
the twelve months ended December 31, 2019. |
|
The $3.5 million, or 4.6%, year-over-year
decrease in net revenue during the three months ended December 31,
2019 reflects the cyclical impact of strong political adverting
revenue recorded in the prior year period, partially offset by
fourth quarter 2019 revenue increases in six of the Company’s
market clusters.
Beasley reported operating income of $11.2
million in the fourth quarter of 2019 compared to operating income
of $13.9 million in the fourth quarter of 2018, largely reflecting
the year-over-year decrease in SOI, in addition to higher corporate
expenses related to digital growth investments and a $12.4 million
non-cash impairment charge related to Beasley’s AM stations in Boca
Raton and Atlanta and a $1.3 million impairment loss on an
investment, partially offset by a $17.1 million gain from land and
tower sales during the period.
Fourth quarter 2019 interest expense was flat
year-over-year at approximately $4.5 million. Beasley reported net
income of $4.8 million, or $0.17 per diluted share, in the three
months ended December 31, 2019, compared to net income of $2.1
million, or $0.08 per diluted share in the three months ended
December 31, 2018. The increase was primarily due to the
aforementioned gain from land and tower sales, and lower income tax
expense compared to the prior year period.
Station Operating Income (SOI, a non-GAAP
financial measure) decreased $5.0 million in the fourth quarter of
2019 compared to the fourth quarter of 2018. The year-over-year
decrease is primarily attributable to higher revenue in the 2018
fourth quarter related to political advertising revenue, as well as
higher operating expenses in the 2019 fourth quarter related to the
acquisitions of WXTU-FM and WDMK-FM.
Please refer to the “Calculation of SOI” and
“Reconciliation of Net Income 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, “Fiscal year 2019 was an
active and productive period for Beasley as we continued to make
significant progress rolling out our digital expansion and
transformation initiatives across the Company, while advancing our
revenue diversification strategies and actively managing our local
radio platform to drive long-term SOI growth and margin expansion.
Beasley’s fourth quarter net revenue decline of $3.5 million
primarily reflects a $2.8 million reduction in political
advertising revenue compared to the prior year period. While we
were not able to fully offset the cyclical impact of political
revenue, the fourth quarter radio advertising environment remained
healthy with six of our markets generating year-over-year revenue
increases.
“By opportunistically divesting several non-core
land and tower assets in 2019, Beasley generated a 31% increase in
full year free cash flow over the prior year period, which enabled
us to complete several strategic growth and diversification
investments in our broadcast, digital, technology and esports
platforms throughout the year. Our fourth quarter results highlight
the value we have begun extracting from our digital transformation
strategy investments. In the fourth quarter, Beasley generated
digital revenue growth of approximately 44% on a year-over-year
basis, with digital now accounting for 9.2% of total revenue,
compared to 6.1% of total revenue in the prior year period. With
our focus on quality content production and consumer engagement, we
are growing audience share across our digital platforms while
delivering multi-platform turnkey marketing solutions to
advertisers and brands. Overall, we are pleased with the momentum
and trajectory of our digital initiatives and look forward to this
growth trend continuing in 2020.
“In 2019, we also continued our disciplined
approach to growing our platform, content portfolio and
distribution by identifying and completing transactions where we
can drive revenue and cost synergies, and further strengthen SOI
margins, with a limited impact on our leverage as we applied
capital from the sale of non-core assets and cash from operations
to make these investments. In August, we completed the accretive
and deleveraging acquisition of WDMK-FM, which is complementary to
our three existing radio stations and digital operations in Detroit
and moves us closer to our goal of achieving 30% revenue share in
the market. The integration of WDMK-FM is proceeding according to
plan, and we expect to realize the full financial and strategic
benefits of this transaction in 2020.
“During the fourth quarter we further expanded
Beasley’s role in the fast-growing esports vertical by acquiring a
majority interest in the Houston Outlaws, one of only 20 Overwatch
League teams in the world. The transaction partners Beasley with
Blizzard Entertainment and its parent company Activision Blizzard,
a leading global developer and publisher of interactive
entertainment content and services. Our growing esports
infrastructure and management combined with our success in hosting
and promoting large events and our national esports content
hub—BeasleyXP—are key factors in our expectations for long-term
returns from this investment.
“In addition to our growth and diversification
initiatives, we remain committed to enhancing shareholder value
through capital returns and leverage reduction. In the fourth
quarter, we used net cash provided by operating activities to pay
our twenty-fifth consecutive quarterly cash dividend and made
voluntary debt repayments of $7.0 million, with total outstanding
long-term debt of $263.5 million as of December 31, 2019.
“In 2020, Beasley intends to continue to
actively manage our business to best position the Company for the
future with the goal of delivering exceptional content and services
to our listeners, advertisers, online users and esports fans, while
creating new value for our shareholders. We remain focused on our
strategic priorities of realizing synergy targets, reducing debt
and leverage, taking advantage of political revenue opportunities,
improving top and bottom-line performance and returning capital to
shareholders through our quarterly cash dividend. We believe our
radio platform and competitive positions in our markets are as
strong as ever and remain confident that our revenue
diversification initiatives, including our digital media
initiatives, are creating new opportunities for further growth and
enhanced shareholder returns.”
Conference Call and Webcast
InformationThe Company will host a conference
call and webcast today, February 18, 2020, at 10:00 a.m. ET to
discuss its financial results and operations. To access the
conference call, interested parties may dial 334/323-0501,
conference ID 6600898 (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 Tuesday, February 18, 2020. 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 59th anniversary this year, Beasley
Broadcast Group, Inc., (www.bbgi.com) was founded in 1961 by George
G. Beasley who remains the Company’s Chairman of the Board. Beasley
Broadcast Group owns and operates 64 stations (47 FM and 17 AM) in
15 large- and mid-size markets in the United States. Approximately
19 million consumers listen to Beasley 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. Beasley 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 “Looking ahead,” “look forward,”
“intends,” “believe,” “hope,” “plan,” “expects,” “expected,”
“anticipates” 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, such as statements about
expected income; shareholder value; revenues; and growth. Key risks
are described in our reports filed with the SEC including in our
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:
- 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;
- and
- other economic, business,
competitive, and regulatory factors affecting our business,
including those set forth in our 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 18, 2020, 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, |
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
Net revenue |
$ |
72,093,111 |
|
|
$ |
75,568,596 |
|
|
$ |
261,554,114 |
|
|
$ |
257,494,599 |
|
Operating expenses: |
|
|
|
|
|
|
|
Operating expenses (including stock-based compensation and
excluding depreciation and amortization shown separately
below) |
|
56,452,577 |
|
|
|
54,921,709 |
|
|
|
201,107,084 |
|
|
|
195,752,948 |
|
Corporate expenses (including stock-based compensation) |
|
5,496,797 |
|
|
|
4,901,898 |
|
|
|
21,209,432 |
|
|
|
16,290,535 |
|
Transaction expenses |
|
407,011 |
|
|
|
- |
|
|
|
768,945 |
|
|
|
110,901 |
|
Depreciation and amortization |
|
1,970,974 |
|
|
|
1,799,264 |
|
|
|
7,349,682 |
|
|
|
6,601,123 |
|
Change in fair value of contingent consideration |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
4,415,925 |
|
Gain on dispositions |
|
(17,111,605 |
) |
|
|
- |
|
|
|
(20,657,360 |
) |
|
|
- |
|
Impairment losses |
|
13,657,941 |
|
|
|
- |
|
|
|
13,657,941 |
|
|
|
- |
|
Total operating expenses |
|
60,873,695 |
|
|
|
61,622,871 |
|
|
|
223,435,724 |
|
|
|
223,171,432 |
|
Operating income |
|
11,219,416 |
|
|
|
13,945,725 |
|
|
|
38,118,390 |
|
|
|
34,323,167 |
|
Non-operating income
(expense): |
|
|
|
|
|
|
|
Interest expense |
|
(4,488,586 |
) |
|
|
(4,501,988 |
) |
|
|
(18,032,669 |
) |
|
|
(16,006,461 |
) |
Loss on modification of long-term debt |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(281,021 |
) |
Other income (expense), net |
|
34,568 |
|
|
|
425,973 |
|
|
|
(246,155 |
) |
|
|
140,910 |
|
Income before income taxes |
|
6,765,398 |
|
|
|
9,869,710 |
|
|
|
19,839,566 |
|
|
|
18,176,595 |
|
Income tax expense |
|
2,331,124 |
|
|
|
7,777,857 |
|
|
|
6,597,751 |
|
|
|
11,695,546 |
|
Income before equity in earnings of unconsolidated affiliates |
|
4,434,274 |
|
|
|
2,091,853 |
|
|
|
13,241,815 |
|
|
|
6,481,049 |
|
Equity in earnings of
unconsolidated affiliates, net of tax |
|
283,205 |
|
|
|
- |
|
|
|
141,827 |
|
|
|
- |
|
Net income |
|
4,717,479 |
|
|
|
2,091,853 |
|
|
|
13,383,642 |
|
|
|
6,481,049 |
|
Earnings attributable to
noncontrolling interest |
|
66,582 |
|
|
|
- |
|
|
|
66,582 |
|
|
|
- |
|
Earnings attributable to BBGI stockholders |
$ |
4,784,061 |
|
|
$ |
2,091,853 |
|
|
$ |
13,450,224 |
|
|
$ |
6,481,049 |
|
|
|
|
|
|
|
|
|
Basic net income per
share |
$ |
0.17 |
|
|
$ |
0.08 |
|
|
$ |
0.49 |
|
|
$ |
0.24 |
|
Diluted net income per
share |
$ |
0.17 |
|
|
$ |
0.08 |
|
|
$ |
0.48 |
|
|
$ |
0.24 |
|
Basic common shares
outstanding |
|
27,800,521 |
|
|
|
27,367,568 |
|
|
|
27,730,392 |
|
|
|
27,444,110 |
|
Diluted common shares
outstanding |
|
27,833,174 |
|
|
|
27,409,701 |
|
|
|
27,777,850 |
|
|
|
27,533,983 |
|
Selected Balance Sheet Data - Unaudited |
(in thousands) |
|
|
December 31, |
|
December 31, |
|
|
2019 |
|
|
|
2018 |
|
Cash and cash equivalents |
$ |
18,648 |
|
|
$ |
13,434 |
|
Working capital |
|
26,466 |
|
|
|
42,086 |
|
Total assets |
|
760,060 |
|
|
|
681,085 |
|
Long term debt, net of current
portion and unamortized debt issuance costs |
|
248,712 |
|
|
|
242,777 |
|
Stockholders’ equity |
$ |
284,539 |
|
|
$ |
275,034 |
|
Selected Statement of Cash Flows Data –
Unaudited |
|
|
Year EndedDecember 31, |
|
|
2019 |
|
|
|
2018 |
|
Net cash provided by operating
activities |
$ |
20,991,224 |
|
|
$ |
24,394,480 |
|
Net cash used in investing
activities |
|
(4,955,046 |
) |
|
|
(45,612,343 |
) |
Net cash provided by (used in)
financing activities |
|
(10,821,835 |
) |
|
|
20,729,301 |
|
Net increase (decrease) in
cash and cash equivalents |
$ |
5,214,343 |
|
|
$ |
(488,562 |
) |
Calculation of SOI –
Unaudited |
|
|
|
Three Months EndedDecember
31, |
|
Year EndedDecember 31, |
|
|
|
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
Net revenue |
$ |
72,093,111 |
|
|
$ |
75,568,596 |
|
|
$ |
261,554,114 |
|
|
$ |
257,494,599 |
|
Station operating
expenses |
|
(56,452,577 |
) |
|
|
(54,921,709 |
) |
|
|
(201,107,084 |
) |
|
|
(195,752,948 |
) |
SOI |
$ |
15,640,534 |
|
|
$ |
20,646,887 |
|
|
$ |
60,447,030 |
|
|
$ |
61,741,651 |
|
Reconciliation of Net Income to SOI -
Unaudited |
|
|
Three Months EndedDecember
31, |
|
Year EndedDecember 31, |
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
Net income |
$ |
4,717,479 |
|
|
$ |
2,091,853 |
|
|
$ |
13,383,642 |
|
|
$ |
6,481,049 |
|
Corporate expenses |
|
5,496,797 |
|
|
|
4,901,898 |
|
|
|
21,209,432 |
|
|
|
16,290,535 |
|
Transaction expenses |
|
407,011 |
|
|
|
- |
|
|
|
768,945 |
|
|
|
110,901 |
|
Depreciation and
amortization |
|
1,970,974 |
|
|
|
1,799,264 |
|
|
|
7,349,682 |
|
|
|
6,601,123 |
|
Change in fair value of
contingent consideration |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
4,415,925 |
|
Gain on dispositions |
|
(17,111,605 |
) |
|
|
- |
|
|
|
(20,657,360 |
) |
|
|
- |
|
Impairment losses |
|
13,657,941 |
|
|
|
- |
|
|
|
13,657,941 |
|
|
|
- |
|
Interest expense |
|
4,488,586 |
|
|
|
4,501,988 |
|
|
|
18,032,669 |
|
|
|
16,006,461 |
|
Loss on modification of
long-term debt |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
281,021 |
|
Other income (expense),
net |
|
(34,568 |
) |
|
|
(425,973 |
) |
|
|
246,155 |
|
|
|
(140,910 |
) |
Income tax expense |
|
2,331,124 |
|
|
|
7,777,857 |
|
|
|
6,597,751 |
|
|
|
11,695,546 |
|
Equity in earnings of
unconsolidated affiliates |
|
(283,205 |
) |
|
|
- |
|
|
|
(141,827 |
) |
|
|
- |
|
SOI |
$ |
15,640,534 |
|
|
$ |
20,646,887 |
|
|
$ |
60,447,030 |
|
|
$ |
61,741,651 |
|
Reconciliation of Net Revenue to Free Cash
Flow - Unaudited |
|
|
Three Months EndedDecember
31, |
|
Year EndedDecember 31, |
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
Net revenue |
$ |
72,093,111 |
|
|
$ |
75,568,596 |
|
|
$ |
261,554,114 |
|
|
$ |
257,494,599 |
|
Operating expenses |
|
(56,452,577 |
) |
|
|
(54,921,709 |
) |
|
|
(201,107,084 |
) |
|
|
(195,752,948 |
) |
Operating stock-based
compensation expense |
|
12,804 |
|
|
|
(263,787 |
) |
|
|
359,657 |
|
|
|
266,015 |
|
Corporate expenses |
|
(5,125,581 |
) |
|
|
(4,471,072 |
) |
|
|
(19,450,371 |
) |
|
|
(14,610,881 |
) |
Net proceeds from
dispositions |
|
21,848,435 |
|
|
|
- |
|
|
|
25,422,201 |
|
|
|
- |
|
Interest expense |
|
(4,488,586 |
) |
|
|
(4,501,988 |
) |
|
|
(18,032,669 |
) |
|
|
(16,006,461 |
) |
Amortization of debt issuance
costs |
|
483,983 |
|
|
|
483,983 |
|
|
|
1,935,932 |
|
|
|
1,899,532 |
|
Interest income |
|
30,029 |
|
|
|
44,999 |
|
|
|
123,726 |
|
|
|
147,150 |
|
Current income tax
expense |
|
(5,601,764 |
) |
|
|
(2,510,153 |
) |
|
|
(8,274,105 |
) |
|
|
(3,687,442 |
) |
Capital expenditures |
|
(2,128,782 |
) |
|
|
(863,110 |
) |
|
|
(9,030,025 |
) |
|
|
(4,209,668 |
) |
FCF |
$ |
20,671,072 |
|
|
$ |
8,565,759 |
|
|
$ |
33,501,376 |
|
|
$ |
25,539,896 |
|
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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From Jun 2024 to Jul 2024
Beasley Broadcast (NASDAQ:BBGI)
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From Jul 2023 to Jul 2024