Beasley Broadcast 10Q 2024 Q1 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_______________

FORM 10-Q


[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2024


[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 000-29253

BEASLEY BROADCAST GROUP, INC.

(Exact Name of Registrant as Specified in Its Charter)


Delaware	65-0960915
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

3033 Riviera Drive, Suite 200

Naples, Florida 34103

(Address of Principal Executive Offices and Zip Code)

(239) 263-5000

(Registrant's Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol	Name of Each Exchange on which Registered
Class A Common Stock, par value $0.001 per share	BBGI	Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer 		Accelerated filer 
Non-accelerated filer 		Smaller reporting company 
Emerging growth company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No 

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

Class A Common Stock, $0.001 par value, 13,681,533 Shares Outstanding as of May 2, 2024

Class B Common Stock, $0.001 par value, 16,662,743 Shares Outstanding as of May 2, 2024

INDEX


		Page No.

PART I FINANCIAL INFORMATION

Item 1.	Condensed Consolidated Financial Statements.

	Notes to Condensed Consolidated Financial Statements.	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	12

Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	17

Item 4.	Controls and Procedures.	17

PART II OTHER INFORMATION

Item 1.	Legal Proceedings.	18

Item 1A.	Risk Factors.	18

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	19

Item 3.	Defaults Upon Senior Securities.	19

Item 4.	Mine Safety Disclosures.	19

Item 5.	Other Information.	19

Item 6.	Exhibits.	20

SIGNATURES		21

BEASLEY BROADCAST GROUP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)


	December 31,			March 31,
	2023			2024
ASSETS
Current assets:
Cash and cash equivalents	$	26,733,921		$	27,763,453
Accounts receivable, less allowance for credit losses of $1,752,058 in 2023 and $1,541,399 in 2024		53,424,196			46,508,958
Prepaid expenses		4,338,503			4,426,652
Other current assets		2,150,163			1,895,334
Total current assets		86,646,783			80,594,397
Property and equipment, net		51,474,754			50,642,084
Operating lease right-of-use assets		34,767,126			33,768,736
FCC licenses		393,006,900			393,006,900
Goodwill		922,000			922,000
Other intangibles, net		2,722,408			2,649,656
Other assets		4,727,967			4,696,089
Total assets	$	574,267,938		$	566,279,862

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	14,299,048		$	11,714,223
Operating lease liabilities		8,082,981			8,084,044
Other current liabilities		25,913,827			22,167,156
Total current liabilities		48,295,856			41,965,423
Due to related parties		55,019			47,341
Long-term debt, net of unamortized debt issuance costs		264,203,010			264,538,649
Operating lease liabilities		33,440,246			32,295,713
Deferred tax liabilities		71,894,915			70,905,149
Other long-term liabilities		7,400,257			7,400,257
Total liabilities		425,289,303			417,152,532
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.001 par value; 10,000,000 shares authorized; none issued		-			-
Class A common stock, $0.001 par value; 150,000,000 shares authorized; 17,391,382 issued and 13,653,941 outstanding in 2023; 17,433,632 issued and 13,681,533 outstanding in 2024		17,389			17,431
Class B common stock, $0.001 par value; 75,000,000 shares authorized; 16,662,743 issued and outstanding in 2023 and 2024		16,662			16,662
Additional paid-in capital		152,794,353			152,947,672
Treasury stock, Class A common stock; 3,737,441 shares in 2023; 3,752,099 shares in 2024		(29,239,179	)		(29,251,815	)
Retained earnings		25,042,926			25,050,896
Accumulated other comprehensive income		346,484			346,484
Total stockholders' equity		148,978,635			149,127,330
Total liabilities and stockholders' equity	$	574,267,938		$	566,279,862

See accompanying notes to condensed consolidated financial statements

BEASLEY BROADCAST GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME (LOSS) (UNAUDITED)


	Three Months Ended March 31,
	2023			2024
Net revenue	$	57,779,120		$	54,380,346
Operating expenses:
Operating expenses (including stock-based compensation of $32,804 in 2023 and $22,238 in 2024 and excluding depreciation and amortization shown separately below)		50,653,655			49,240,998
Corporate expenses (including stock-based compensation of $141,464 in 2023 and $131,123 in 2024)		4,483,095			4,407,832
Depreciation and amortization		2,229,325			1,834,602
Total operating expenses		57,366,075			55,483,432
Operating income (loss)		413,045			(1,103,086	)
Non-operating income (expense):
Interest expense		(6,593,852	)		(5,587,308	)
Gain on sale of investment		-			6,026,776
Other income, net		540,515			270,005
Loss before income taxes		(5,640,292	)		(393,613	)
Income tax benefit		(2,163,983	)		(410,230	)
Income (loss) before equity in earnings of unconsolidated affiliates		(3,476,309	)		16,617
Equity in earnings of unconsolidated affiliates, net of tax		(60,257	)		(8,647	)
Net income (loss)		(3,536,566	)		7,970
Net income (loss) per Class A and Class B common share:
Basic and diluted	$	(0.12	)	$	-
Weighted average shares outstanding:
Basic		29,785,759			30,325,802
Diluted		29,785,759			30,466,730

See accompanying notes to condensed consolidated financial statements

BEASLEY BROADCAST GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


	Three Months Ended March 31,
	2023			2024
Cash flows from operating activities:
Net income (loss)	$	(3,536,566	)	$	7,970
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Stock-based compensation		174,268			153,361
Provision for credit losses		230,692			217,742
Depreciation and amortization		2,229,325			1,834,602
Amortization of loan fees		367,126			335,639
Gain on sale of investment		-			(6,026,776	)
Deferred income taxes		(2,163,983	)		(989,766	)
Equity in earnings of unconsolidated affiliates		60,257			8,647
Change in operating assets and liabilities:
Accounts receivable		8,965,032			6,697,496
Prepaid expenses		(266,749	)		(88,149	)
Other assets		1,049,212			241,709
Accounts payable		(3,713,040	)		(2,584,825	)
Other liabilities		(6,062,782	)		(3,884,195	)
Other operating activities		222,043			39,661
Net cash used in operating activities		(2,445,165	)		(4,036,884	)
Cash flows from investing activities:
Capital expenditures		(1,169,280	)		(947,724	)
Proceeds from sale of investment		-			6,026,776
Net cash provided by (used in) investing activities		(1,169,280	)		5,079,052
Cash flows from financing activities:
Purchase of treasury stock		(25,545	)		(12,636	)
Net cash used in financing activities		(25,545	)		(12,636	)
Net increase (decrease) in cash and cash equivalents		(3,639,990	)		1,029,532
Cash and cash equivalents at beginning of period		39,534,653			26,733,921
Cash and cash equivalents at end of period	$	35,894,663		$	27,763,453
Cash paid for interest	$	12,506,445		$	11,514,377
Cash paid for income taxes	$	21,491		$	84,450

See accompanying notes to condensed consolidated financial statements

BEASLEY BROADCAST GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(1)

Interim Financial Statements

The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of Beasley Broadcast Group, Inc. and its subsidiaries (the “Company”) included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. These financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the financial statements reflect all adjustments necessary for a fair statement of the financial position and results of operations for the interim periods presented, and all such adjustments are of a normal and recurring nature. The Company’s results are subject to seasonal fluctuations; therefore the results shown on an interim basis are not necessarily indicative of results for the full year.

(2)

Recent Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (“FASB”) issued guidance which requires additional disclosures primarily related to the Company's income tax rate reconciliation and income taxes paid. The guidance is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments should be applied prospectively. The Company is currently in the process of reviewing the new guidance.

In November 2023, the FASB issued guidance which requires additional disclosures for the Company's reportable segments, primarily related to significant segment expenses. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within the fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. The Company is currently in the process of reviewing the new guidance.

(3)

Proceeds from BMI Sale

On March 8, 2024, the Company received $6.0 million related to the sale of an investment in Broadcast Music, Inc. ("BMI") and recorded a gain of $6.0 million. The gain on sale of investment is reported in the accompanying condensed consolidated statement of net income for the three months ended March 31, 2024. After the sale, the Company no longer holds an investment in BMI.

(4)

Long-Term Debt

Long-term debt is comprised of the following:


	December 31,			March 31,
	2023			2024
Secured notes	$	267,000,000		$	267,000,000
Less unamortized debt issuance costs		(2,796,990	)		(2,461,351	)
	$	264,203,010		$	264,538,649

On February 2, 2021, the Company issued $300.0 million aggregate principal amount of 8.625% senior secured notes due on February 1, 2026 (the “Notes”) under an indenture dated February 2, 2021 (the “Indenture”). Interest on the Notes accrues at the rate of 8.625% per annum and is payable semiannually in arrears on February 1 and August 1 of each year. The Notes are secured on a first-lien priority basis by substantially all assets of the Company and its majority-owned subsidiaries and are guaranteed jointly and severally by the Company and its majority-owned subsidiaries. The Indenture contains restrictive covenants that limit the ability of the Company and its subsidiaries to, among other things, incur additional indebtedness, guarantee indebtedness or issue disqualified stock or, in the case of such subsidiaries, preferred stock; pay dividends on, repurchase or make distributions in respect of our capital stock or make other restricted payments; make certain investments or acquisitions; sell, transfer or otherwise convey certain assets; create liens; enter into agreements restricting certain subsidiaries’ ability to pay dividends or make other intercompany transfers; consolidate, merge, sell or otherwise dispose of all or substantially all of its assets; enter into transactions with affiliates; prepay certain kinds of indebtedness; and issue or sell stock of its subsidiaries. Prior to February 1, 2025, the Company will be subject to certain premiums, as defined in the Indenture, for optional or mandatory (upon certain contingent events) redemption of some or all of the Notes.

BEASLEY BROADCAST GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(5)

Stockholders’ Equity

The changes in stockholders’ equity are as follows:


	Three months ended March 31,
	2023			2024
Beginning balance	$	223,488,808		$	148,978,635
Stock-based compensation		174,268			153,361
Purchase of treasury stock		(25,545	)		(12,636	)
Net income (loss)		(3,536,566	)		7,970
Ending balance	$	220,100,965		$	149,127,330

(6)

Net Revenue

Net revenue is comprised of the following:


	Three months ended March 31,
	2023		2024
Audio	$	47,417,966	$	43,428,127
Digital		9,976,785		10,952,219
Other		384,369		-
	$	57,779,120	$	54,380,346

The Company recognizes revenue when it satisfies a performance obligation under a contract with an advertiser. The transaction price is allocated to performance obligations based on executed contracts, which represent relative standalone selling prices. Payment is generally due within 30 days, although certain advertisers are required to pay in advance. Revenues are reported at the amount the Company expects to be entitled to receive under the contract. The Company has elected to use the practical expedient to expense sales commissions as incurred. Payments received from advertisers before the performance obligation is satisfied are recorded as deferred revenue in the balance sheets. Substantially all deferred revenue is recognized within 12 months of the payment date.


	December 31,		March 31,
	2023		2024
Deferred revenue	$	4,835,984	$	4,611,312

Audio revenue includes revenue from the sale or trade of aired commercial spots to advertisers directly or through national, regional or local advertising agencies. Each commercial spot is considered a performance obligation. Revenue is recognized when the commercial spots have aired. Trade sales are recorded at the estimated fair value of the goods or services received. If commercial spots are aired before the goods or services are received, then a trade sales receivable is recorded. If goods or services are received before the commercial spots are aired, then a trade sales payable is recorded. Other revenue includes revenue from concerts, promotional events, talent fees and other miscellaneous items. Such revenue is generally recognized when the concert, promotional event, or talent services are completed.


	December 31,		March 31,
	2023		2024
Trade sales receivable	$	1,417,692	$	1,381,341
Trade sales payable		481,471		466,237


	Three months ended March 31,
	2023		2024
Trade sales revenue	$	1,380,842	$	1,264,463

Digital revenue includes revenue from the sale of streamed commercial spots, station-owned assets and third-party products. Each streamed commercial spot, station-owned asset and third-party product is considered a performance obligation. Revenue is recognized when the commercial spots have streamed. Station-owned assets are generally scheduled over a period of time and revenue is

BEASLEY BROADCAST GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

recognized over time as the digital items are used for advertising content, except for streamed commercial spots. Third-party products are generally scheduled over a period of time with an impression target each month. Revenue from the sale of third-party products is recognized over time as the digital items are used for advertising content and impression targets are met each month. The Company assesses each digital sales order to determine if the Company is operating as the principal or an agent. The Company currently operates as the principal for digital revenue.

(7)

Stock-Based Compensation

The Beasley Broadcast Group, Inc. 2007 Equity Incentive Award Plan (the “2007 Plan”) permits the Company to issue up to 7.5 million shares of Class A common stock. The 2007 Plan allows for eligible employees, directors and certain consultants of the Company to receive restricted stock units, shares of restricted stock, stock options or other stock-based awards. The restricted stock units that have been granted under the 2007 Plan generally vest over one to five years of service.

A summary of restricted stock unit activity is presented below:


	Units			Weighted-Average Grant-Date Fair Value
Unvested as of January 1, 2024		773,334		$	1.54
Granted		-			-
Vested		(42,250	)		2.28
Forfeited		(5,000	)		0.92
Unvested as of March 31, 2024		726,084		$	1.50

As of March 31, 2024, there was $0.6 million of total unrecognized compensation cost for restricted stock units granted under the 2007 Plan. That cost is expected to be recognized over a weighted-average period of 2.1 years.

(8)

Income Taxes

The Company’s effective tax rate was (38)% and (104)% for the three months ended March 31, 2023 and 2024, respectively. These rates differ from the federal statutory rate of 21% due to the effect of state income taxes and certain expenses that are not deductible for tax purposes.

(9)

Net Income (Loss) Per Share

Net income (loss) per share calculation information is as follows:


	Three months ended March 31,
	2023			2024
Net income (loss)	$	(3,536,566	)	$	7,970
Weighted-average shares outstanding:
Basic		29,785,759			30,325,802
Effect of dilutive restricted stock units		-			140,928
Diluted		29,785,759			30,466,730
Net income (loss) per Class A and Class B common share – basic and diluted	$	(0.12	)	$	-

The Company excluded the effect of restrictive stock units under the treasury stock method when reporting a net loss as the addition of shares was anti-dilutive. The number of shares excluded was 123,738 for the three months ended March 31, 2023.

BEASLEY BROADCAST GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(10)

Financial Instruments

The carrying amount of the Company’s financial instruments, including cash and cash equivalents, accounts receivable and accounts payable, approximates fair value due to the short-term nature of these financial instruments.

The estimated fair value of the Company's Notes, based on available market information, was $173.2 million and $160.2 million as of December 31, 2023 and March 31, 2024, respectively. The Company used Level 2 measurements under the fair value measurement hierarchy to determine the estimated fair value of the Notes.

(11)

Segment Information

The Company currently operates two operating and reportable segments (Audio and Digital). The Company also operated an esports segment until December 13, 2023. The identification of segments is consistent with how the segments report to and are managed by the Company’s Chief Executive Officer (the Company’s Chief Operating Decision Maker). The Audio segment generates revenue primarily from the sale of commercial advertising to customers of the Company’s stations in the following markets: Atlanta, GA, Augusta, GA, Boston, MA, Charlotte, NC, Detroit, MI, Fayetteville, NC, Fort Myers-Naples, FL, Las Vegas, NV, Middlesex, NJ, Monmouth, NJ, Morristown, NJ, Philadelphia, PA, and Tampa-Saint Petersburg, FL. The Digital segment generates revenue primarily from the sale of digital advertising to customers of the Company’s stations and other advertisers throughout the United States. Corporate expenses includes general and administrative expenses and certain other income and expense items not allocated to the operating segments. Non-operating corporate items, including interest expense and income taxes, are reported in the accompanying condensed consolidated statements of net income (loss).

Reportable segment information for the three months ended March 31, 2024 is as follows:


	Audio		Digital		Corporate			Total
Net revenue	$	43,428,127	$	10,952,219	$	-		$	54,380,346
Operating expenses		38,432,912		10,808,086		-			49,240,998
Corporate expenses		-		-		4,407,832			4,407,832
Depreciation and amortization		1,596,253		52,439		185,910			1,834,602
Operating income (loss)	$	3,398,962	$	91,694	$	(4,593,742	)	$	(1,103,086	)


	Audio		Digital		Corporate		Total
Capital expenditures	$	821,735	$	-	$	125,989	$	947,724

Reportable segment information for the three months ended March 31, 2023 is as follows:


	Audio		Digital		Other			Corporate			Total
Net revenue	$	47,417,966	$	9,976,785	$	384,369		$	-		$	57,779,120
Operating expenses		39,899,594		9,907,597		846,464			-			50,653,655
Corporate expenses		-		-		-			4,483,095			4,483,095
Depreciation and amortization		1,774,764		46,766		196,477			211,318			2,229,325
Operating income (loss)	$	5,743,608	$	22,422	$	(658,572	)	$	(4,694,413	)	$	413,045


	Audio		Digital		Other		Corporate		Total
Capital expenditures	$	1,138,114	$	2,813	$	20,122	$	8,231	$	1,169,280

Reportable segment information as of March 31, 2024 is as follows:


	Audio		Digital		Corporate		Total
Property and equipment, net	$	47,564,829	$	156,124	$	2,921,131	$	50,642,084
FCC licenses		393,006,900		-		-		393,006,900
Goodwill		-		922,000		-		922,000
Other intangibles, net		1,674,636		795,357		179,663		2,649,656

BEASLEY BROADCAST GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Reportable segment information as of December 31, 2023 is as follows:


	Audio		Digital		Other		Corporate		Total
Property and equipment, net	$	48,324,618	$	95,003	$	74,081	$	2,981,052	$	51,474,754
FCC licenses		393,006,900		-		-		-		393,006,900
Goodwill		-		922,000		-		-		922,000
Other intangibles, net		1,707,909		834,836		-		179,663		2,722,408

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

General

We are a multi-platform media company whose primary business is operating radio stations throughout the United States. We offer local and national advertisers integrated marketing solutions across audio, digital and event platforms. We own and operate stations in the following markets: Atlanta, GA, Augusta, GA, Boston, MA, Charlotte, NC, Detroit, MI, Fayetteville, NC, Fort Myers-Naples, FL, Las Vegas, NV, Middlesex, NJ, Monmouth, NJ, Morristown, NJ, Philadelphia, PA, and Tampa-Saint Petersburg, FL. We refer to each group of stations in each market as a market cluster. Unless the context otherwise requires, all references in this report to the “Company,” “we,” “us” or “our” are to Beasley Broadcast Group, Inc. and its subsidiaries.

Cautionary Note Regarding Forward-Looking Statements

This report contains “forward-looking statements” about the Company within the meaning of the Private Securities Litigation Reform Act of 1995, which relate to future, not past, events. All statements other than statements of historical fact included in this document are forward-looking statements. These forward-looking statements are based on the current beliefs and expectations of the Company’s management and are subject to known and unknown risks and uncertainties. Forward-looking statements, which address the Company’s expected business and financial performance and financial condition, among other matters, contain words such as: “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates,” “may,” “will,” “plans,” “projects,” “could,” “should,” “would,” “seek,” “forecast,” or other similar expressions.

Forward-looking statements, by their nature, address matters that are, to different degrees, uncertain. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. The Company undertakes no obligation to update or revise any forward-looking statements.

Forward-looking statements involve a number of risks and uncertainties, and actual results or events may differ materially from those projected or implied in those statements. Factors that could cause actual results or events to differ materially from these forward-looking statements include, but are not limited to:

•

the Company's ability to comply with the continued listing standards of the Nasdaq Capital Market;

•

risks from social and natural catastrophic events;

•

external economic forces and conditions that could have a material adverse impact on the Company’s advertising revenues and results of operations;

•

the ability of the Company’s stations to compete effectively in their respective markets for advertising revenues;

•

the ability of the Company to develop compelling and differentiated digital content, products and services;

•

audience acceptance of the Company’s content, particularly its audio programs;

•

the ability of the Company to respond to changes in technology, standards and services that affect the audio industry;

•

the Company’s dependence on federally issued licenses subject to extensive federal regulation;

•

actions by the FCC or new legislation affecting the audio industry;

•

increases to royalties the Company pays to copyright owners or the adoption of legislation requiring royalties to be paid to record labels and recording artists;

•

the Company’s dependence on selected market clusters of stations for a material portion of its net revenue;

•

credit risk on the Company’s accounts receivable;

•

the risk that the Company’s FCC licenses and/or goodwill could become impaired;

•

the Company’s substantial debt levels and the potential effect of restrictive debt covenants on the Company’s operational flexibility and ability to pay dividends;

•

the potential effects of hurricanes on the Company’s corporate offices and stations;

•

the failure or destruction of the internet, satellite systems and transmitter facilities that the Company depends upon to distribute its programming;

•

disruptions or security breaches of the Company’s information technology infrastructure and information systems;

•

the loss of key personnel;

•

the Company’s ability to integrate acquired businesses and achieve fully the strategic and financial objectives related thereto and their impact on the Company’s financial condition and results of operations;

•

the fact that the Company is 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.

Although we believe the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. We do not intend, and undertake no obligation, to update any forward-looking statement.

Financial Statement Presentation

The following discussion provides a brief description of certain key items that appear in our financial statements and general factors that impact these items.

Net Revenue. Our net revenue is primarily derived from the sale of commercial spots to advertisers directly or through national, regional or local advertising agencies. Revenues are reported at the amount we expect to be entitled to receive under the contract. Local revenue generally consists of commercial advertising sales, digital advertising sales and other sales to advertisers in a station’s local market, either directly to the advertiser or through the advertiser’s agency. National revenue generally consists of commercial advertising sales through advertiser agencies. National advertiser agencies generally purchase advertising for multiple markets. National sales are generally facilitated by our national representation firm, which serves as our agent in these transactions.

Our net revenue is generally determined by the advertising rates that we are able to charge and the number of advertisements that we can broadcast without jeopardizing listener levels. Advertising rates are primarily based on the following factors:

•

a station’s audience share in the demographic groups targeted by advertisers as measured principally by periodic reports issued by Nielsen Audio;

•

the number of stations, as well as other forms of media, in the market competing for the attention of the same demographic groups;

•

the supply of, and demand for, radio advertising time; and

•

the size of the market.

Our net revenue is affected by general economic conditions, competition and our ability to improve operations at our radio market clusters. Seasonal revenue fluctuations are also common in the radio broadcasting industry and are primarily due to variations in advertising expenditures by local and national advertisers. Our revenues typically are lowest in the first calendar quarter of the year. In addition, our revenues tend to fluctuate between years, consistent with, among other things, increased advertising expenditures in even-numbered years by political candidates, political parties and special interest groups. This political spending typically is heaviest during the fourth quarter of such years.

We use trade sales agreements to reduce cash paid for operating costs and expenses by exchanging advertising airtime for goods or services; however, we endeavor to minimize trade revenue in order to maximize cash revenue from our available airtime.

We also continue to invest in digital support services to develop and promote our station websites, applications, and other distribution platforms. We derive revenue from our websites through the sale of advertiser promotions and advertising on our websites and the sale of advertising airtime during audio streaming of our stations over the internet. We also generate revenue from selling third-party digital products and services.

Operating Expenses. Our operating expenses consist primarily of programming, engineering, sales, advertising and promotion, and general and administrative expenses incurred at our stations. We strive to control our operating expenses by centralizing certain functions at our corporate offices and consolidating certain functions in each of our market clusters.

Critical Accounting Estimates

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect reported amounts and related disclosures. We consider an accounting estimate to be critical if:

•

it involves a significant level of estimation uncertainty; and

•

changes in the estimate or different estimates that could have been selected have had or are reasonably likely to have a material impact on our results of operations or financial condition.

Our critical accounting estimates are described in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023. There have been no additional material changes to our critical accounting estimates during the three months ended March 31, 2024.

Recent Accounting Pronouncements

Recent accounting pronouncements are described in Note 2 to the accompanying condensed consolidated financial statements.

Three Months Ended March 31, 2024 Compared to the Three Months Ended March 31, 2023

The following summary table presents a comparison of our results of operations for the three months ended March 31, 2023 and 2024, with respect to certain of our key financial measures. The changes illustrated in the table are discussed in greater detail below. This section should be read in conjunction with the condensed consolidated financial statements and notes to condensed consolidated financial statements included in Item 1 of this report.

Results of Operations - Consolidated


	Three Months Ended March 31,					Change
	2023			2024		$			%
Net revenue	$	57,779,120		$	54,380,346	$	(3,398,774	)		(5.9	)%
Operating expenses		50,653,655			49,240,998		(1,412,657	)		(2.8	)%
Corporate expenses		4,483,095			4,407,832		(75,263	)		(1.7	)%
Interest expense		6,593,852			5,587,308		(1,006,544	)		(15.3	)%
Gain on sale of investment		-			6,026,776		6,026,776			-
Income tax benefit		2,163,983			410,230		(1,753,753	)		(81.0	)%
Net income (loss)		(3,536,566	)		7,970		3,544,536			(100.2	)%

Results of Operations - Segments


	Three Months Ended March 31,				Change
	2023		2024		$			%
Net revenue
Audio	$	47,417,966	$	43,428,127	$	(3,989,839	)		(8.4	)%
Digital		9,976,785		10,952,219		975,434			9.8	%
Other		384,369		-		(384,369	)		(100.0	)%
	$	57,779,120	$	54,380,346	$	(3,398,774	)		(5.9	)%
Operating expenses
Audio	$	39,899,594	$	38,432,912	$	(1,466,682	)		(3.7	)%
Digital		9,907,597		10,808,086		900,489			9.1	%
Other		846,464		-		(846,464	)		(100.0	)%
	$	50,653,655	$	49,240,998	$	(1,412,657	)		(2.8	)%

Net Revenue. Net revenue decreased $3.4 million during the three months ended March 31, 2024 as compared to the three months ended March 31, 2023. Audio revenue decreased $4.0 million during the three months ended March 31, 2024 as compared to the three months ended March 31, 2023, primarily due to a decrease in local agency and direct revenue and the disposition of WJBR-FM in Wilmington, DE in October 2023. Digital revenue increased $1.0 million during the three months ended March 31, 2024 as compared to the three months ended March 31, 2023, primarily due to continued growth in the digital segment. Other revenue decreased $0.4 million during the three months ended March 31, 2024 as compared to the three months ended March 31, 2023, due to the termination of our esports operations in December 2023.

Operating Expenses. Operating expenses decreased $1.4 million during the three months ended March 31, 2024 as compared to the three months ended March 31, 2023. Audio operating expenses decreased $1.5 million during the three months ended March 31, 2024 as compared to the three months ended March 31, 2023, primarily due to continued expense management in the audio segment and the disposition of WJBR-FM in Wilmington, DE in October 2023. Digital operating expenses increased $0.9 million during the three months ended March 31, 2024 as compared to the three months ended March 31, 2023, primarily due to continued investment in the digital segment. Other operating expenses decreased $0.8 million during the three months ended March 31, 2024 as compared to the three months ended March 31, 2023, due to the termination of our esports operations in December 2023.

Corporate Expenses. Corporate expenses during the three months ended March 31, 2024 were comparable to the three months ended March 31, 2023.

Interest Expense. Interest expense decreased $1.0 million during the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 due to repurchases of the secured notes throughout 2023.

Gain on Sale of Investment. On March 8, 2024, we received $6.0 million related to the sale of an investment in Broadcast Music, Inc. and recorded a gain of $6.0 million.

Income Tax Benefit. Our effective tax rate was approximately (38)% and (104)% for the three months ended March 31, 2023 and 2024, respectively. These rates differ from the federal statutory rate of 21% due to the effect of state income taxes and certain expenses that are not deductible for tax purposes.

Net Income (Loss). Net income for the three months ended March 31, 2024 was approximately $8,000 compared to a net loss of $3.5 million for the three months ended March 31, 2023, as a result of the factors described above.

Liquidity and Capital Resources

Overview. Our primary sources of liquidity are internally generated cash flow and cash on hand. Our primary liquidity needs have been, and for the next 12 months and thereafter are expected to continue to be, for working capital, debt service, and other general corporate purposes, including capital expenditures and station acquisitions. Historically, our capital expenditures have not been significant. In addition to property and equipment associated with station acquisitions, our capital expenditures have generally been, and are expected to continue to be, related to the maintenance of our office and studio space, the maintenance of our towers and equipment, and digital products and information technology. We have also purchased or constructed office and studio space in some of our markets to facilitate the consolidation of our operations.

Our board of directors has suspended future quarterly dividend payments until it is determined that resumption of dividend payments is in the best interest of the Company’s stockholders. In addition, as discussed in “Secured Notes” below, the Indenture governing our Notes limits our ability to pay dividends.

Secured Notes. On February 2, 2021, we issued $300.0 million aggregate principal amount of 8.625% senior secured notes due on February 1, 2026 (the “Notes”) under an indenture dated February 2, 2021 (the “Indenture”). Interest on the Notes accrues at the rate of 8.625% per annum and is payable semiannually in arrears on February 1 and August 1 of each year. The Notes are secured on a first-lien priority basis by substantially all assets of the Company and its majority-owned subsidiaries and are guaranteed jointly and severally by the Company and its majority-owned subsidiaries. The Indenture contains restrictive covenants that limit the ability of the Company and its subsidiaries to, among other things, incur additional indebtedness, guarantee indebtedness or issue disqualified stock or, in the case of such subsidiaries, preferred stock; pay dividends on, repurchase or make distributions in respect of our capital stock or make other restricted payments; make certain investments or acquisitions; sell, transfer or otherwise convey certain assets; create liens; enter into agreements restricting certain subsidiaries’ ability to pay dividends or make other intercompany transfers; consolidate, merge, sell or otherwise dispose of all or substantially all of our assets; enter into transactions with affiliates; prepay certain kinds of indebtedness; and issue or sell stock of our subsidiaries.

From time to time, we repurchase sufficient shares of our common stock to fund withholding taxes in connection with the vesting of restricted stock units. We paid approximately $13,000 to repurchase 14,658 shares during the three months ended March 31, 2024. From time to time, we may seek to repurchase, redeem or otherwise retire our Notes through cash purchases and/or exchanges for equity securities, in open market purchases, privately negotiated transactions, tender offers or otherwise. Such repurchases, redemptions or other transactions, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, and other factors. The amounts involved may be material.

We expect to provide for future liquidity needs through one or a combination of the following sources of liquidity:

•

internally generated cash flow;

•

additional borrowings or notes offerings, to the extent permitted under the Indenture governing our Notes; and

•

additional equity offerings.

We believe we will have sufficient liquidity and capital resources to permit us to provide for our liquidity requirements and meet our financial obligations for the next 12 months and thereafter. However, poor financial results or unanticipated expenses could give rise to default under the Notes, additional debt servicing requirements or other additional financing or liquidity requirements sooner than we expect, and we may not secure financing when needed or on acceptable terms.

Off-Balance Sheet Arrangements. We did not have any off-balance sheet arrangements as of March 31, 2024.

Cash Flows. The following summary table presents a comparison of our cash flows for the three months ended March 31, 2023 and 2024 with respect to certain of our key measures affecting our liquidity. The changes set forth in the table are discussed in greater detail below. This section should be read in conjunction with the condensed consolidated financial statements and notes to condensed consolidated financial statements included in Part I, Item 1 of this report.


	Three Months Ended March 31,
	2023			2024
Net cash used in operating activities	$	(2,445,165	)	$	(4,036,884	)
Net cash provided by (used in) investing activities		(1,169,280	)		5,079,052
Net cash used in financing activities		(25,545	)		(12,636	)
Net increase (decrease) in cash and cash equivalents	$	(3,639,990	)	$	1,029,532

Net Cash Used In Operating Activities. Net cash used in operating activities was approximately $4.0 million during the three months ended March 31, 2024, as compared to net cash used in operating activities of $2.4 million during the three months ended March 31, 2023. Significant factors affecting the $1.6 million increase in net cash used in operating activities included a $5.5 million decrease in cash receipts from revenue, partially offset by a $3.2 million decrease in cash paid for operating expenses and a $1.0 million decrease in interest payments.

Net Cash Provided By (Used In) Investing Activities. Net cash provided by investing activities during the three months ended March 31, 2024 included proceeds of $6.0 million from the sale of an investment, partially offset by payments of $0.9 million for capital expenditures. Net cash used in investing activities for the three months ended March 31, 2023 included payments of $1.2 million for capital expenditures.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not required for smaller reporting companies.

ITEM 4. CONTROLS AND PROCEDURES.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective as of the end of the period covered by this report.

There were no changes in our internal control over financial reporting during the quarter ended March 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

We currently and from time to time are involved in ordinary routine litigation and are the subject of threats of litigation that are incidental to the conduct of our business. These include indecency claims and related proceedings at the FCC, as well as claims and threatened claims by private third parties. However, we are not a party to any lawsuit or other proceedings, or the subject of any threatened lawsuit or other proceedings, which, in the opinion of management, is likely to have a material adverse effect on our financial condition or results of operations.

ITEM 1A. RISK FACTORS.

Except for the risk factor discussed below, there have been no material changes to the risks affecting our Company as previously disclosed in Part I, Item 1A, “Risk Factors” of our annual report on Form 10-K for the year ended December 31, 2023.

There can be no assurance that we will be able to comply with the continued listing standards of the Nasdaq Capital Market.

Our Class A common stock, par value $0.001 per share (the “Common Stock”) is currently listed for trading on the Nasdaq Capital Market, and we must satisfy certain continued listing requirements to maintain the listing. On April 27, 2023, we received a written notice (the “April Notice”) from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) notifying us that, for the last 30 consecutive business days, the bid price for the Common Stock had closed below the $1.00 per share minimum bid price requirement for continued inclusion on the Nasdaq Global Market pursuant to Nasdaq Listing Rule 5450(a)(1) (the “Minimum Bid Price Requirement”). On May 19, 2023, we received a notice from Nasdaq notifying us that we had regained compliance with the Minimum Bid Price Requirement and that the matter was closed.

On October 13, 2023, we received a written notice (the “October Notice”) from the Listing Qualifications Department of Nasdaq notifying us that, for the last 30 consecutive business days, the bid price for the Common Stock had closed below the Minimum Bid Price Requirement. In accordance with Nasdaq rules, we were provided with a period of 180 calendar days, or until April 10, 2024, to regain compliance.

On April 16, 2024, we received approval from Nasdaq to transfer the listing of the Common Stock from the Nasdaq Global Market to the Nasdaq Capital Market (the “Approval”). The Common Stock was transferred to the Nasdaq Capital Market at the opening of business on April 18, 2024, and continues to trade under the symbol “BBGI.” As a result of the Approval, we were granted an additional 180-day compliance period, or until October 7, 2024, to regain compliance with the Minimum Bid Price Requirement. To regain compliance with the Minimum Bid Price Requirement and qualify for continued listing on the Nasdaq Capital Market, the minimum bid price per share of the Company’s Common Stock must be at least $1.00 for at least ten consecutive business days during the additional 180-day compliance period.

We intend to actively monitor the closing bid price of the Common Stock and will consider all reasonable available options to regain compliance with the Minimum Bid Price Requirement, which may include seeking stockholder approval to effect a reverse stock split. There can be no assurance that we will regain compliance with the Minimum Bid Price Requirement by October 7, 2024, maintain compliance with the other Nasdaq listing requirements or be successful in appealing any delisting determination.

If we are delisted from Nasdaq but obtain a substitute listing for the Common Stock, it will likely be on a market with less liquidity, and therefore experience potentially more price volatility than experienced on Nasdaq. Stockholders may not be able to sell their shares of the Common Stock on any such substitute market in the quantities, at the times, or at the prices that could potentially be available on a more liquid trading market. As a result of these factors, if the Common Stock is delisted from Nasdaq, the value and liquidity of the Common Stock would likely be significantly adversely affected.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Repurchases of Equity Securities

The following table presents information with respect to purchases we made of our Class A common stock during the three months ended March 31, 2024.


Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program		Approximate Dollar Value of Shares That May Yet Be Purchased Under the Program
January 1 – 31, 2024		7,633	$	0.91		-		-
February 1 – 29, 2024		-	$	-		-		-
March 1 – 31, 2024		7,025	$	0.81		-		-
Total		14,658

On March 27, 2007, our board of directors approved the Beasley Broadcast Group, Inc. 2007 Equity Incentive Award Plan (the “2007 Plan”). The original ten-year term of the 2007 Plan ended on March 27, 2017. Our stockholders approved an amendment to the 2007 Plan at the Annual Meeting of Stockholders on June 8, 2017 to, among other things, extend the term of the 2007 Plan until March 27, 2027. The 2007 Plan permits us to purchase sufficient shares to fund withholding taxes in connection with the vesting of restricted stock units. All shares purchased during the three months ended March 31, 2024 were purchased to fund withholding taxes in connection with the vesting of restricted stock units.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

During the three months ended March 31, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.

ITEM 6. EXHIBITS.


Exhibit Number		Description
31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) (17 CFR 240.15d-14(a)).
31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) (17 CFR 240.15d-14(a)).
32.1*		Certification of Chief Executive Officer pursuant to Rule 13a-14(b)/15d-14(b) (17 CFR 240.15d-14(b)) and 18 U.S.C. Section 1350.
32.2*		Certification of Chief Financial Officer pursuant to Rule 13a-14(b)/15d-14(b) (17 CFR 240.15d-14(b)) and 18 U.S.C. Section 1350.
101.INS		XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH		XBRL Taxonomy Extension Schema With Embedded Linkbase Documents.
104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

* This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is
not incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general
incorporation language in such filing.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		BEASLEY BROADCAST GROUP, INC.

Dated: May 9, 2024		/s/ Caroline Beasley
		Name: Caroline Beasley
		Title: Chief Executive Officer (principal executive officer)

Dated: May 9, 2024		/s/ Marie Tedesco
		Name: Marie Tedesco
		Title: Chief Financial Officer (principal financial and accounting officer)

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Beasley Broadcast (BBGI) 10-Q2024 Q1 Quarterly report

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