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Beasley Broadcast Group Q1 Net Revenues Flat at $57.7 Million


Beasley Media Group
Beasley Media Group

Beasley Broadcast Group reported first quarter net revenues were flat at $57.7 million over 2019 results. Operating income fell to a loss of $7.1 million from a gain of $6.8 million. Station operating income fell 41.4% to $6.7 million from $10.2 million. The company posted a net loss of $8.8 million (32 cents per diluted share) as compared to a net income of $1.4 million in the year-ago period. OI, net income and EPS reflect $6.8 million of non-cash impairment losses and a $3.5 million gain on dispositions during the quarter.

CEO Caroline Beasley commented, "During the first quarter, the broadcast industry experienced a rapid deterioration in market conditions brought on by the onset of the COVID-19 pandemic, which resulted in a significant decline in commercial advertising revenue in March. Despite these challenges, first quarter net revenue was $57.7 million, primarily reflecting strong performance across our station clusters in seven markets during the months of January and February driven by robust political ad spending and contributions from WDMK-FM, as well as significant growth in digital and esports revenue. However, our top-line growth was not able to fully offset the acute challenges brought on by the COVID-19 pandemic during the three-month period, resulting in a year-over-year decline in first quarter SOI and Free Cash Flow.

"Since the nationwide COVID-19 outbreak, we implemented immediate actions to adapt our business to protect our employees and preserve liquidity in order to best position the Company, our stations, our digital operations, and our esports interests for renewed long-term success. In this regard, we have quickly implemented several changes across the Company including reducing operating expenses and corporate overhead, decreasing selling, general and administrative costs and realigning our company-wide cost structure to preserve cash.

"Beasley expects these actions to reduce total annual operating expenses by approximately $21 million compared to full year 2019 levels, to offset the reduction in traditional advertising revenue that has occurred as a result of the pandemic. Notably, while mandated stay at home orders severely impacted advertising revenue in March, April, and May, we have seen recent increases in advertising activity in markets that have re-opened, with May advertising revenues ahead of April, and bookings for June, as of today, already exceeding May's results.

"In addition to our company-wide cost cutting initiatives, Beasley is committed to using every resource available to support our balance sheet and capital structure. In this regard, as previously announced, we are working with our credit facility lenders to obtain an amendment that will provide the financial flexibility we need in this challenging environment to prepare our business for the full re-opening of the economy. During the first quarter, we drew $7.5 million against our revolver and used cash from operations to make scheduled debt repayments of approximately $3 million and ended March 31, 2020 with total outstanding debt of $267 million. In addition, the Board of Directors has suspended future quarterly dividends until the significant uncertainty of the current situation has passed and it is determined that resumption of dividend payments is in the best interest of the Company's shareholders.

"We believe our strong local radio and digital platform and competitive positions in our markets combined with the experience of our team and the actions we are taking to reduce costs and support our balance sheet and liquidity position will be key factors in our ability to recover from this crisis. Looking ahead, we remain focused on our strategic priorities of realizing synergy targets, reducing debt and leverage, taking advantage of political revenue opportunities and benefiting from our esports investments and operations."

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