BEASLEY BROADCAST GROUP INC Q3 FY2024 earnings call

Management Statement and Operational Highlights

• Marie Tedesco retired after 33 years, including 7 as CFO; Lauren Burrows Coleman appointed CFO.
• Successfully completed exchange offer, new notes offering, and tender offer, reducing debt by $47 million and extending maturities to August 2028.
• Executed reverse split of Class A and Class B common stock to maintain NASDAQ listing.
• Q3 same-station revenue up 0.5%, total net revenue down 3.2% comping with prior year.
• Digital revenue mix shifted, accounting for 19.4% of Q3 total revenue.
• National saw benefit from political in Q3.
• Q3 operating expenses declined 0.3%, station operating income (SOI) down $1.8 million year-over-year.
• Consumer services, retail, entertainment, sports betting, auto, consumer products as key revenue categories.
• Beasley stations responded to Hurricanes Halen and Milton by serving communities.
• Fourth quarter same-station revenue pacing up in mid-single digits; Oct up 24%, Nov mid-single digits down, Dec down ~10%.
• Expense reductions projected at over $5 million annualized, reducing full-time employees by 15% through September 30.

Segment Performance

• Digital: Q3 digital segment revenue grew 1.1%, but same-station digital grew 11.7% quarter over quarter and 13.6% year-to-date. Digital revenue accounted for 19.4% of Q3 total revenue, up from 18.6% in Q3 '23 and 16% in Q3 '22. For the 9 months ended September 30, digital accounted for 20.4% of total revenue.
• National: Same-station national was up 10.7% in Q3 due to political, but ex-political was down 16%. National accounted for 12.7% of total revenue ex-political.
• Local: Same-station over-the-air local was down 8.9% or $3 million, declining 9.9% or $3.4 million overall. Local agency business declined 6.9%, partially offset by a 2.7% increase in local direct. Total direct sales currently account for about 57% of total local business.

Guidance

• Fourth quarter same-station revenue pacing up in mid-single digits.
• Expect revenue to be up in fourth quarter.
• Focus on growing traditional business and expanding digital revenues.

Risks

• Advertisers hesitant to book prior to election results affecting national advertising in markets like Philadelphia and Boston.
• Challenges in national advertising across the industry and other ad-reliant businesses.

Q: Are you seeing any resumption in national advertising in Philadelphia and Boston?

A: Not yet. Advertisers are hesitant to book anything until after the election due to inventory shortage.

Q: Post the exchange, how do you think about liquidity and the potential for more bond buybacks?

A: Focus on maintaining a minimum cash position as a business. But anything above that will seek opportunities to opportunistically buy back bonds.

Q: When do you foresee year-over-year comps going positive again?

A: In the third quarter, same-station revenue was up 0.5%. Fourth quarter is pacing up in the mid-single digits, so expect revenue to be up in the fourth quarter as well.