Company News
Beasley broadcast group reports third quarter revenue of $60.1 million
Beasley Broadcast Group, Inc., a multi-platform media company, today announced operating results for the three-month period ended September 30, 2023. For further information, the Company has posted a presentation to its website regarding the third quarter highlights and accomplishments that management will review on today’s conference call.
Summary of Third Quarter and Nine Months Results
| In millions, except per share data | Three Months Ended September 30, |
Nine Months Ended September 30, |
||
| 2023 | 2022 | 2023 | 2022 | |
| Net revenue | $60.1 | $63.8 | $181.4 | $184.4 |
| Operating income (loss) 1 | (85.5) | 4.7 | (89.6) | (2.6) |
| Net income (loss) 1 | (67.5) | 0.5 | (81.5) | (17.6) |
| Net income (loss) per diluted share 1 | (2.25) | 0.02 | (2.73) | (0.60) |
| Adjusted EBITDA (non-GAAP) | $5.5 | $7.2 | $15.9 | $15.3 |
Operating loss, net loss and net loss per diluted share in the three and nine months ended September 30, 2023 reflect $88.8 million and $98.8 million, respectively, of non-cash impairment losses. Operating loss, net loss and net loss per diluted share in the nine months ended September 30, 2022 includes $10.5 million of non-cash impairment losses. Excluding the third quarter 2023 impairment losses of $88.8 million, Beasley would have reported operating income of $3.3 million in the third quarter of 2023 compared to operating income of $4.7 million in the third quarter of 2022.
Net revenue during the three months ended September 30, 2023 reflects a year-over-year decrease in cyclical political advertising and commercial advertising, related to continued softness in the agency business, partially offset by growth in digital advertising and other revenue.
Despite the year-over-year decrease in operating expenses and corporate expenses of 2.7% and 12.5%, respectively, Beasley reported a 2023 third quarter operating loss of $85.5 million compared to operating income of $4.7 million in the third quarter of 2022. The third quarter 2023 operating loss largely reflects the impact of $88.8 million of non-cash impairment losses, primarily due to an increase in the discount rate due to certain risks associated with the U.S. economy and a decrease in the projected revenues used in the discounted cash flow analyses to estimate the fair value of FCC licenses and goodwill. Excluding the third quarter 2023 impairment losses of $88.8 million, Beasley’s operating income was $3.3 million compared to operating income of $4.7 million in the third quarter of 2022.
Beasley reported a net loss of $67.5 million, or $2.25 per diluted share, in the three months ended September 30, 2023, compared to net income of $0.5 million, or $0.02 per diluted share, in the three months ended September 30, 2022. The 2023 third quarter net loss was primarily due to the aforementioned non-cash impairment losses.
Adjusted EBITDA (a non-GAAP financial measure) was $5.5 million in the third quarter of 2023 compared to $7.2 million in the third quarter of 2022. The year-over-year decrease is primarily attributable to lower net revenue compared to the prior year period.
Please refer to the “Calculation of Adjusted EBITDA” and “Reconciliation of Net Income (Loss) to Adjusted EBITDA” tables at the end of this release.
Commenting on the financial results, Caroline Beasley, Chief Executive Officer, said, “Beasley’s third quarter financial results reflect the well-publicized economic challenges and continued advertising market softness which we outlined in the prior quarters. While we saw sequential month-over-month improvement in our advertising revenue performance from August to September, our net revenues for the 2023 third quarter decreased 5.8% year-over-year, or 3.2% when excluding the year-over-year decrease in political advertising revenue of $1.9 million. Importantly, Beasley’s ongoing expense management, revenue diversification and new business initiatives resulted in lower operating expenses and healthy growth across our digital, network and other revenue sources, and we generated third quarter adjusted EBITDA of $5.5 million.
“Similar to recent quarters, Beasley delivered strong digital revenue growth of 9.1% year-over-year, with digital revenue representing 18.6% of total third quarter revenue. Our continued strong digital revenue growth has moved us to within a few basis points of reaching the bottom end of our goal of digital revenue accounting for 20% to 30% of total revenue, and we remain laser focused on this initiative as a means to diversify our revenue in a cash flow positive manner. Our dedicated sales teams continue to leverage the tremendous audience reach and engagement of our local multi-platform content to attract new advertisers, resulting in a 22% increase in new local business revenue growth for the third quarter. Additionally, the actions we have taken to reduce our cost structure resulted in third quarter operating and corporate expenses decreases of 2.7% and 12.5%, respectively.
“In addition to our expense reduction and revenue diversification initiatives, Beasley also remained committed to enhancing financial flexibility and cash flows through debt reduction. Subsequent to quarter end, we completed the sale of substantially all of the assets used in the operations of WJBR-FM in Wilmington for $5.0 million and used 100% of the sale proceeds, along with cash on hand, to repurchase another $10 million of our senior secured notes at a discount. We have reduced debt by $13.0 million year-to-date, strengthening our balance sheet and lowering quarterly interest expense. We remain focused on enhancing our cash flows and expect to generate positive cash flow in the 2023 fourth quarter.
“In summary, we believe our third quarter financial performance demonstrates that our digital transformation and revenue diversification strategies continue to gain momentum and our initiatives focused on lowering operating expenses and reducing debt are positioning Beasley to generate increased and more diversified cash flows in future periods. Looking ahead, as has always been the case for non-election years, we expect fourth quarter revenues to be somewhat impacted by the absence of cyclical political advertising. While we plan to offset some of this expected softness through continued growth in digital and new business, we are hopeful that the overall advertising environment will improve in the fourth quarter and continue to closely monitor the economy.”
Conference Call and Webcast Information
The Company will host a conference call and webcast today, November 1, 2023, at 11:00 a.m. ET to discuss its financial results and operations. To access the conference call, interested parties may dial 877-407-4018 or 201-689-8471, conference ID 13742084 (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 [email protected] at any time up until 9:00 a.m. ET on Wednesday, November 1, 2023. Management will answer as many questions as possible during the conference call and webcast (provided the questions are not addressed in their prepared remarks). GlobeNewswire
