Beasley Broadcast Group, Inc. (Nasdaq: BBGI) (“Beasley” or the
“Company”), a multi-platform media company, today announced
operating results for the three months ended March 31, 2022.
Summary of First Quarter
Results
In millions, except per share data |
Three Months EndedMarch 31, |
|
2022 |
2021 |
Net revenue |
$55.7 |
$48.2 |
Operating loss1 |
2.7 |
2.5 |
Net loss1 |
3.7 |
10.7 |
Net loss per diluted share1 |
$0.13 |
$0.36 |
Station operating income (SOI - non-GAAP) |
5.9 |
5.2 |
1 Operating loss, net loss attributable to BBGI stockholders and
net loss per diluted share reflect a $1.9 million non-cash
impairment loss in the three months ended March 31, 2022. Net loss
attributable to BBGI stockholders and net loss per diluted share
reflect a $5.0 million loss on extinguishment of long-term debt in
the three months ended March 31, 2021.
Net revenue during the three months ended March
31, 2022 increased 15.6% to $55.7 million, primarily reflecting a
year-over-year increase in audio and digital revenue due to the
continued recovery of the commercial advertising market from the
effects of the COVID-19 pandemic.
Beasley reported an operating loss of $2.7
million in the first quarter of 2022 compared to an operating loss
of $2.5 million in the first quarter of 2021. The increase in
operating loss is primarily the result of an increase in operating
expenses, which reflects additional cost of sales related to the
revenue increase, other expenses related to sports and marketing,
and additional expenses related to the Company’s digital agency
build out. Operating loss in the three months ended March 31, 2022
reflects a $1.9 million non-cash impairment loss related to the
sale of WWNN-AM in Boca Raton on April 1, 2022.
Interest expense increased $1.1 million to $6.8
million in the first quarter of 2022, resulting from the issuance
of senior secured notes in February 2021. As a result of these
factors, Beasley reported a net loss of $3.7 million, or $0.13 per
diluted share, in the three months ended March 31, 2022, compared
to a net loss of $10.7 million, or $0.36 per diluted share, in the
three months ended March 31, 2021 which also included a $5.0
million loss on extinguishment of long-term debt related to the
issuance of 8.625% secured senior notes on February 2, 2021.
SOI increased by $0.6 million to $5.9 million in
the first quarter of 2022 from $5.2 million in the first quarter of
2021. The increase is primarily attributable to higher net revenue,
which more than offset higher operating expenses.
Please refer to the “Calculation of SOI” and
“Reconciliation of Net Loss Attributable to BBGI Stockholders 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, “First quarter results
highlight ongoing progress toward our goal of returning all of our
revenue sources to pre-pandemic levels. Net revenue rose 15.6%
inclusive of a 35.5% rise in digital segment revenue, which
accounted for 14% of total net revenue in the quarter, marking
further success of our digital transformation strategies. Comparing
our revenue performance to the first quarter of 2019, revenue was
down $2.0 million, or 3.4%, as the 2019 results benefited from
events and other revenue that has not fully recovered from the
effects of the COVID-19 pandemic.
“Total outstanding debt as of March 31, 2022 was
$300.0 million, as we did not have any scheduled debt payments
during the quarter, and we had $50.7 million of cash and cash
equivalents on hand at quarter end. We made an interest payment of
approximately $12.9 million in February and repurchased $5.0
million of our 8.625% senior secured notes at a discount early in
the second quarter. Our strong liquidity position enables us to
make debt repayments while providing us with increased financial
flexibility to pursue a potential acquisition or investment within
the digital space, should an opportunity arise that could
accelerate our digital growth, provide synergies or improve
financial results.
“Looking ahead to the second quarter and second
half of 2022, our focus remains on driving further revenue
diversification and audience expansion, improving margins,
benefiting from the return of the political cycle, maintaining a
strong and flexible balance sheet, reducing net leverage and
growing free cash flow. We expect progress on each of these fronts
as we continue to close the gap on our pre-pandemic revenue and SOI
levels and grow from there. I am extremely proud of our team
members across the Company for everything they have done and are
doing to help us move past the challenges presented by the
pandemic. We have clearly accomplished a lot and I believe we have
many more opportunities ahead to build the Company and enhance
stockholder value.”
Conference Call and Webcast InformationThe
Company will host a conference call and webcast today, May 9, 2022,
at 10:00 a.m. ET to discuss its financial results and operations.
To access the conference call, interested parties may dial
773/305-6853, conference ID 9879579 (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 Monday, May 9, 2022. 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
GroupThe Company owns and operates 61 stations (47 FM and
14 AM) in 14 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 messaging, digital and web applications and email.
The Overwatch League’s Houston Outlaws esports team is a wholly
owned subsidiary. The Company also owns BeasleyXP, a national
esports content hub, and AXLR-R8, a Rocket League Championship
Series team, in its esports portfolio. 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,” “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 financial
results; stockholder value; and growth. Key risks are described in
our reports filed with the Securities and Exchange Commission
(“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:
- the effects of the COVID-19
pandemic, including its potential effects on the economic
environment and our results of operations, liquidity and financial
condition;
- 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;
- increases to royalties we pay to
copyright owners or the adoption of legislation requiring royalties
to be paid to record labels and recording artists;
- 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 our Company is
controlled by the Beasley family, which creates difficulties for
any attempt to gain control of our Company; 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 May 9, 2022, 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 |
|
|
March 31, |
|
|
|
2022 |
|
|
|
2021 |
|
Net
revenue |
|
$ |
55,720,268 |
|
|
$ |
48,212,040 |
|
Operating expenses: |
|
|
|
|
|
|
Operating expenses (including stock-based compensationand excluding
depreciation and amortization shown separatelybelow) |
|
|
49,830,436 |
|
|
|
42,967,871 |
|
Corporate expenses (including stock-based compensation) |
|
|
4,233,460 |
|
|
|
3,905,289 |
|
Depreciation and amortization |
|
|
2,515,900 |
|
|
|
2,951,901 |
|
Impairment loss |
|
|
1,857,226 |
|
|
|
- |
|
Gain on disposition |
|
|
- |
|
|
|
(191,988 |
) |
Other operating expenses |
|
|
- |
|
|
|
1,100,000 |
|
Total operating expenses |
|
|
58,437,022 |
|
|
|
50,733,073 |
|
Operating loss |
|
|
(2,716,754 |
) |
|
|
(2,521,033 |
) |
Non-operating income (expense): |
|
|
|
|
|
|
Interest expense |
|
|
(6,849,037 |
) |
|
|
(5,778,071 |
) |
Loss on extinguishment of long-term debt |
|
|
- |
|
|
|
(4,996,731 |
) |
Other income, net |
|
|
872 |
|
|
|
38,413 |
|
Loss before income taxes |
|
|
(9,564,919 |
) |
|
|
(13,257,422 |
) |
Income tax benefit |
|
|
(5,849,318 |
) |
|
|
(2,602,886 |
) |
Loss before equity in earnings of unconsolidated affiliates |
|
|
(3,715,601 |
) |
|
|
(10,654,536 |
) |
Equity in earnings of
unconsolidated affiliates, net of tax |
|
|
(23,344 |
) |
|
|
(30,105 |
) |
Net loss |
|
|
(3,738,945 |
) |
|
|
(10,684,641 |
) |
Earnings attributable to
noncontrolling interest |
|
|
- |
|
|
|
129,249 |
|
Net loss attributable to BBGI stockholders |
|
$ |
(3,738,945 |
) |
|
$ |
(10,555,392 |
) |
|
|
|
|
|
|
|
Basic and diluted net loss per
share |
|
$ |
(0.13 |
) |
|
$ |
(0.36 |
) |
Basic and diluted common
shares outstanding |
|
|
29,370,789 |
|
|
|
29,302,799 |
|
|
|
|
|
|
|
|
Selected Balance Sheet Data - Unaudited(in
thousands) |
|
|
|
|
|
|
|
|
|
|
March 31,2022 |
|
|
December 31,2021 |
Cash and cash equivalents |
|
$ |
50,707 |
|
$ |
51,379 |
Working capital |
|
|
61,705 |
|
|
67,696 |
Total assets |
|
|
746,633 |
|
|
762,088 |
Long-term debt, net of
unamortized debt issuance costs |
|
|
294,170 |
|
|
293,790 |
Stockholders' equity |
|
$ |
259,541 |
|
$ |
263,082 |
Selected Statement of Cash Flows Data –
Unaudited |
|
|
|
|
|
Three months ended |
|
|
March 31, |
|
|
2022 |
|
2021 |
Net cash provided by operating activities |
|
$ |
735,374 |
|
|
$ |
2,354,007 |
|
Net cash used in investing
activities |
|
|
(1,375,775 |
) |
|
|
(666,768 |
) |
Net cash provided by (used in)
financing activities |
|
|
(31,544 |
) |
|
|
33,763,934 |
|
Net increase (decrease) in
cash and cash equivalents |
|
$ |
(671,945 |
) |
|
$ |
35,451,173 |
|
Calculation of SOI |
|
|
|
Three months ended |
|
|
March 31, |
|
|
2022 |
|
2021 |
Net revenue |
|
$ |
55,720,268 |
|
|
$ |
48,212,040 |
|
Operating expenses |
|
|
(49,830,436 |
) |
|
|
(42,967,871 |
) |
SOI |
|
$ |
5,889,832 |
|
|
$ |
5,244,169 |
|
Reconciliation of Net Loss Attributable to BBGI
Stockholders to SOI |
|
|
|
Three months ended |
|
|
March 31, |
|
|
2022 |
|
2021 |
Net loss attributable to BBGI stockholders |
|
$ |
(3,738,945 |
) |
|
$ |
(10,555,392 |
) |
Corporate expenses |
|
|
4,233,460 |
|
|
|
3,905,289 |
|
Depreciation and
amortization |
|
|
2,515,900 |
|
|
|
2,951,901 |
|
Impairment loss |
|
|
1,857,226 |
|
|
|
- |
|
Gain on disposition |
|
|
- |
|
|
|
(191,988 |
) |
Other operating expenses |
|
|
- |
|
|
|
1,100,000 |
|
Interest expense |
|
|
6,849,037 |
|
|
|
5,778,071 |
|
Loss on extinguishment of
long-term debt |
|
|
- |
|
|
|
4,996,731 |
|
Other income, net |
|
|
(872 |
) |
|
|
(38,413 |
) |
Income tax benefit |
|
|
(5,849,318 |
) |
|
|
(2,602,886 |
) |
Equity in earnings of
unconsolidated affiliates, net of tax |
|
|
23,344 |
|
|
|
30,105 |
|
Earnings attributable to
noncontrolling interest |
|
|
- |
|
|
|
(129,249 |
) |
SOI |
|
$ |
5,889,832 |
|
|
$ |
5,244,169 |
|
Reconciliation of Net Revenue to FCF |
|
|
|
|
|
Three months ended |
|
|
March 31, |
|
|
2022 |
|
2021 |
Net revenue |
|
$ |
55,720,268 |
|
|
$ |
48,212,040 |
|
Operating expenses |
|
|
(49,830,436 |
) |
|
|
(42,967,871 |
) |
Corporate expenses |
|
|
(4,233,460 |
) |
|
|
(3,905,289 |
) |
Net proceeds from
disposition |
|
|
- |
|
|
|
362,500 |
|
Stock-based compensation
expense |
|
|
227,250 |
|
|
|
520,801 |
|
Interest expense |
|
|
(6,849,037 |
) |
|
|
(5,778,071 |
) |
Amortization of debt issuance
costs |
|
|
380,211 |
|
|
|
411,363 |
|
Interest income |
|
|
3,235 |
|
|
|
2,589 |
|
Current income tax
expense |
|
|
- |
|
|
|
- |
|
Capital expenditures |
|
|
(1,386,750 |
) |
|
|
(1,029,268 |
) |
FCF |
|
$ |
(5,968,719 |
) |
|
$ |
(4,171,206 |
) |
CONTACT: |
|
B. Caroline Beasley Chief Executive Officer Beasley Broadcast
Group, Inc. 239/263-5000 or ir@bbgi.com |
Joseph Jaffoni, Jennifer
NeumanJCIR212/835-8500 or bbgi@jcir.com |
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