Beasley Broadcast (BBGI) 7 Nov 222022 Q3 Earnings call transcript

Good morning, and welcome to Beasley Broadcast Group's Third Quarter 2022 Conference Call.

Before proceeding, I would like to emphasize that today's conference call and webcast will contain forward-looking statements about our future performance and results of operations that involve risks and uncertainties described in the Risk Factors section of our most recent annual reports on Form 10-K as supplemented by our quarterly reports on Form 10-Q. Today's webcast will also contain a discussion of certain non-GAAP financial measures within the meaning of Item 10 of Regulation S-K. A reconciliation of these non-GAAP measures with their most directly comparable financial measures calculated and presented in accordance with GAAP can be found in this morning's news announcement and on the company's website. I would also remind listeners that following its completion, a replay of today's call can be accessed for 5 days on the company's website, www.bbgi.com.

a Press today's site. Room find the release also or Investors sections can copy press of on You of the this Group's to your like time, conference At to over turn host, Caroline CEO, the Broadcast Beasley. Beasley I'd Please go ahead.

everyone. and Tedesco, joining Marie us you you, morning. is CFO, with our Thank the Thank quarter call review this third for morning, good results. our to me on

SOI. in reported Overall, provided quarter So revenue results our continued both to revenue to year-over-year show when a happy year-over-year, and I'm X.X% flat third improvement net we increased down exceeding QX share to guidance quarter. slightly projected that the of we

X.X%. million, that while the audio benefit primary and or Now national over-the-air million initiatives, and betting, political. while political revenue revenue spot year-over-year revenue of by digital XX.X% were $X.X to down, in million national decreased business new the increased previous continued third sports that offset grew X.X% $XXX,XXX declined increase revenue in quarter revenue digital $X.X X% $X.X quarters, a that breaking decline. revenue Similar Impressively, year-over-year includes drivers local by the or

national where the dig been accounts total or national, revenue. down bit, Now $X.X higher trend we've offsetting that is and, it with This in for revenue. local past and excluding was quarters million successful the political, into to about several a XX% our more for quarter, notably, now XX% of with declines digital consistent in

national. matter quarters, mix and part our third digital of was the than larger a fact, of second As a revenue both in

June third digital meaningful And XX.X% of with be revenue total as our accelerate digital to revenues a our in and the XX% by with our provide platform. over goal will and Third quarter the revenues, total XX% that digital quarter white a digital label And up acquisition synergies agency growth continued to our fourth revenue will completed revenue we digital of of XX, close remains reminder, on this just from quarter. thereafter. growth year-ago continue represented growing

Now revenue as I mix. much as historically, now XX%. about and our as total of just national has sometimes mentioned, represents accounted XX% it for And XX%

which emphasized of to platform develop we national local new continue the continuing why new we million is growth to have while business our recorded quarter. to in expect decline, direct this digital business, and $X.X We aggressively

of the of the first economic our given at costs in we risks of eliminated quarter. Now backdrop, July, reducing We beginning began early permanent X wages. $X.X million which the approximately executed

was additional with executed annual in remain million. October, early by watchful initiatives end our XXXX. the Our which on all eyes of executed XXXX, wages near second as an we These reduced expenses risk, were of we approximate as $X.X

of category or $X.X New clusters. sports Now X% touching recorded revenue during in by betting. on which revenue quarter, million in this Philly was and Jersey driven the We total Detroit,

formats million. of now progress an and reducing the reaching are for XX% quarter when expect million par, additional to market We accounting of SOI for 'XX to begin the great $XXX,XXX in demographics, just digital we're settled quarter XX%. have X permanently X sometime June our that another SOI to grew $XXX,XXX The of margins Hub, $XXX,XXX expenses. by the that Patriots, by in to quarter home or to digital. expenses with the and indication Bruins third XX.X $XX,XXX, year-over-year X.X% acquisition $X was of million with Operating 'XX, we million, to $X 'XX And were comparing Sports of new Like increased at at Celtics. take in we compared X $X from with And marking in will bonds was third first $XXX fourth a our different of third quarter, our below over FMs making of distinct positioned well we note, advantage XXXX. previous par increased end able and and of Massachusetts quarter between repurchased the that this quarter that sports trading our total debt including quarters, betting

So going deep to over into and to Marie? with that, quarter. the I'm provide she's to you hand going Marie, a it insight

Thanks, Caroline. everyone. Good morning, and good morning,

results, our me Let review review of with of our a a start quarter third followed sheet. balance by

teams quarter political as or from all but year. Digital, to $XXX,XXX we quarter markets, revenue $XX.X generated acquisition. $X.X our third million, in agency $X.X $XXX,XXX million X our X $XXX,XXX net X.X% to which revenue Guarantee million our well year-over-year grew increased of Third second includes from and quarter last approximately in as We net revenue esports in compared

see will to evident higher expected, which in spending continue than quarter. fourth initially be also political We

of exceeded year we by the As today, revenue midterm political in XXXX full have XX%. approximately received election

and declined or $XXX,XXX in slowdown rate quarter shortages, interest inflation, July the third X.X% the slowdown revenue national. August overall political, increases to related in a Excluding economy. in due and We saw the labor to decline

approximately to down offsetting and the X% decline quarter in closer grew quarter, national local September was national. local in XX%. a Digital X% down the X.X% approximately XX% down at for for margins. over-the-air SOI to of Looking levels and flat million, local increase with July which quarter X.X% with Guarantee $XXX,XXX. up came national have would label August our X X%, $XXX,XXX wage Breaking and of quarter with our political. third July expenses in in $XX.X increase Pro up severance was year-over-year XX.X%. grew X.X% up operating flat and the drivers up declined revenue XX.X% X.X% in of increased of XX.X% a XX% compared in our thanks approximately X%, from to agency, XX.X% expenses the to million quarter. of million, prior expenses, quarter of acquisition $XXX,XXX. margin closer would severance pre-pandemic and the margin were X annual impressive resulting an $XX.X in represented to the quarter from digital third savings, week quarter in for we second and as white to We prior the of year total $XXX,XXX new or operating year first Station quarter approximately XXXX main third SOI completed from the forma quarter our this have on increased added $XX.X expenses revenue Digital, closed of costs risks the for the and part XX.X%

increase for at the year-over-year revenue Now with looking third Consumer quarter. X.X% total categories for largest of revenue, XX.X% revenue at our remained services our category an quarter. of

an X down category and Detroit this year increases largest of an Philadelphia, approximately clusters our saw and decline and added largest the Tampa, of Jersey saw levels all severance We in in total to supply entertainment, category $X.X as Our or G&A our And XX% show fifth revenues. chain expenses is expense with $XXX,XXX Corporate $X.X corporate for digital New retail. a The by was revenue. XX.X% and for expenses switched low of believe million. at increased Detroit, a in revenues to and ago double-digit the stabilize for Boston, at Vegas. markets, same entertainment X.X% sixth year-over-year less increase compared Charlotte auto as normalize Retail Vegas. headcount. total stock-based year-over-year, The in was revenues. build $X.X of we million X.X% $XXX,XXX. year-over-year in and and in single-digit well place can to saw in were representing in compared million of to accounted income to Consumer XX.X% second We the XX% prior we was G&A And saw of related corporate in fourth year our in revenues. increases level. quarter sports in category $X.X X.X% from category telecom for betting than and as $XXX,XXX the was inventory but again year-over-year continue the reduction quarter. place, And total in Auto, X.X% mostly which $XX,XXX and Las tax growth down revenue. issues to Fayetteville revenue dealership down We $X.X increased quarter flat category increase third the accounted quarter X.X% spot, and Entertainment for Las improvement million. double-digit X.X%, total increases in or year-over-year as of spend total and accounted Noncash quarter. of products the benefit grew X.X% quarter had compensation million this

offset quarter Third million negative $X.X declined $XXX,XXX income in by to the in driven mostly $X.X by a XXXX quarter, a to in operating increase station income. an expense, million corporate negative ago the increase year operating compared

$XXX the million Third We $XXX,XXX did bonds quarter, quarter us scheduled X decreased debt year-over-year total to debt a million. the of payments have any not repurchase related expense with to during quarters. past our interest $X.X over leaving of the

XXXX was for semiannual $X.X agency for XXXX. hand certain adjusted pro third PPL of $XX.X compensation, bond fourth for was and million, taxes, Our million. cash the grant as the EBITDA a X, the and the such for We acquisition next cash used payment is leverage our from scheduled net net and risk on That's July X.XXx. quarter interest the forma quarter repurchases. our noncash quarter including with ended add-backs February of

to accelerate and an flow. and in investments significant continues digital synergies and/or our Our arise further the growth us reduce cash that digital allow cash should to additional could pursue flexibility balance space opportunity provide debt free

the environment, balance inclined to for economic However, given we on sheet uncertain time being. the cash keep our are

Our which studios were on million, the and $X.X of capital and expenditures August our the to relocation build-out which was were completed Boston related entirely for quarter almost XX. offices,

$X.X of million. the was $X.X with reimbursement back way. year-to-date, to build-out to $X.X year-to-date CapEx net Caroline. additional of it prior to received And in million the $X.X allowance or $XX.X quarter with landlord have a third that, on turn million spend This million build-out million. so million, I'll compared received from We $X.X an compares the And far, of prior

Marie. you, Thank

grew 'XX. XX.X QX sellable multi-platform continues digital of XX.X has in in audience more assets to in which more the third an 'XX. consumed time our in That's expanded platform, driving digital led But been which Our impressions, particularly with QX focus and and quarter, higher by our evident increase growth. growth digital more from more million local content in important, our In strategy 'XX owned our digital audience unique this audience compared spent markets. This was to XX%. QX to operated on our to users O&O million drive XX% content increasing

impressions up X O&O to this of 'XX, the QX we from by billion end year. over impressions were and expect reach Our XXX%

this to major PPM In broadcasters market our all have our in share when share radio addition currently digital prime. we to growth other compared the in per incredible XX-XX maintain where to increased cost our with adults Nielsen, platforms, X% Overall, highest continue average positions in dominant PPM. on stations year-over-year

our of Detroit markets, most fact, in amongst adults including Boston, Charlotte largest XX-XX. Philly, In the have we #X station and

month podcast moving Broadcast minutes, hour Between digital growth Now XX and 'XX spent half return of past where listening went to and from of in Global minutes audio reporting Intelligence a Media XX% to half the those minutes grew XX% in board, total XX according podcasts, an increased an X half eMarketer's hour XX%. XX with XX XX listening 'XX. audio daily increased having of XX% the this a and The is X XX% minutes, X to and daily. radio per year-over-year listened hours minutes day. across at-work And to in Report, radio 'XX penetration demographic, listening the in the total to to from an is to is to during increase of moving especially from to time from due with first likely listening in average to content notable work. the broadcast up the and XX first first

you So that our of these to comments trends. take can I positioned hope are that see morning this from well advantage we

season League best the Overwatch were Now the just ended world. and we ranked today, on and The esports. #X in season moving to we had its

I'm was to were fact We're the out have million able season, the I to that that XX registered So proud than that year. X, the first had days. released more X of planning achieve this really and given for should the be accomplishments and they they which XX say Overwatch now very our in team play exciting, on game October its to players 'XX

including and currently Rocket America World that's Team and Our former #XX team, North roster, ranked new XXX has teams. League of upgraded out and Champion, a we're in Axle, X

very to Las Beasley our and asset to XXX.X an last Audacy, that is stations planned we weekdays So our And pleased exchange Group KDWN-AM quarter. exchange a into on were announce Vegas-based month, Vegas. entered and to as from Dave this completed whereby it's and asset long-time a.m. transaction in The Mahoney local be And will to exchange personality, to morning with KXTE-FM for of the in agreement, agreement syndicated banner. we heard XX content, will X premium market. part the their translator this focus we Alternative highlights be the a.m. X under Media sometime other complementary expected continue

Now fourth quarter. looking at

As stay strategic on further driving digital we've political on leading our in initiatives, crowd-out, new and our seen revenue. we focused audience, our diversification with especially revenue by some certain categories, offset growing stronger-than-expected platform to declines political

and economy, today earlier, year. of the prepared as an permanent cut today. second October is flat pacing $XX ever was on X And breaking pacing that given However, for the Fourth November cost we the environment effective overall of a approximately slowdown we're just up have of down, that up and to we declining X.X%, noted prior to reductions economic combined seeing and other October revenue December overall current in are initiated quarter environment as down a X%. of And mindful basis. and are million north slightly

and and outstanding job teams before incredible this to air in office Fort September Myers getting us Naples of Q&A, their the Ian thank going and Hurricane So here the during of I'd in in back to commitment for corporate like dedication year. our on for

free news were Our heroism past acts us around currently members that challenges that also information. team inspiring. questions everything and economic again by your with like time teams important on- to and storm, forward will air and this XXXX. into to direct were morning, during I'd this and some going We please the that to selfless, are unwavering any off-air so for submitted company clock Their we on they the that move we're staying to time call you to those. to take all time brave do were help to communities Thank across provide our feel the were acknowledge of the are life-saving the face impacted doing a review these some we questions. expecting And lifeline and have for facing once

Caroline. Okay, Thanks, great.

to our quarterly So numbers. a we disclose receive did request EBITDA

prepared on And so do our included we as a go-forward have you we our could see and both and will in adjusted net so comments, leverage, EBITDA to continue basis.

And what follow balance bonds? you what the to are are Caroline, up any buying you minimum with question. first the to going So interested is in that, cash which back -- with? comfortable also more

Yes.

cash buying our So is as the $XX minimum balance with far buying that about as be million. more bonds, bonds. goal to we feel in back back comfortable is And opportunistic

said, very uncertain cash However, environment. now, the million minimum and we're balance as economic was given our I conscious $XX

So that's where we are.

both a could what question us products for for digital or services revenue driving give XXXX? on 'XX and update an you Great. was are And revenue growth? expectations digital as And the of another total percent

Yes.

our earlier O&O our So on platform. digital has that I the from made focus comments heard is audience today think that you the I hopefully, growing been

page editorial out which and driven has content we have our really therefore impressions. views initiative, rolled So an

of O&O XX% the driver So products result we increase this of and saw our as revenue revenue. were a growth a in really

we're So these what sell? and programmatic and from display products sales are our and got direct shelf. course, to our display able We've then, podcast audio of that

products driven for this products quarter Our this TPP year. again, O&O was so all were by flat the

the that. question those Great. reduction of So X costs And And take are this cost plan. implementing is more the of then I cuts? we timing here. about have And will cash what the

so in those we under which annualized in headcount, million reduction of cuts, benefit severance some the had of $XXX,XXX was permanent of added headcount comments. cost effective severance. quarter The expense. our So that's prepared us cost see October reduction are the but $XX in just half a few that And more fourth questions We in covered less they it. all will were in

we covered. much Well, questions additional feel have with time right. very reach All you not right. All any and your out thank that to Bye. for today, free may

today's your Thank for you participation. This call. concludes

You may disconnect. now