BEASLEY BROADCAST GROUP INC Q4 FY2024 earnings call

• Delivered over $20 million in annualized savings through workforce realignment and technology-driven efficiencies. Strategic capital structure initiatives improved leverage profile, extended maturities, and reduced financial risk.
• Welcomed Dave Snyder as Head of Digital Content Marketing and made structural changes to enhance agility and profitability in digital operations. Anticipate digital to drive half of new business in 2025, with redesigned websites to be completed in Q2 2025.
• Beasley stations rank #1 and #2 in half of markets and are benefiting from Nielsen's PPM methodology change. Streamlined organization and modernized processes in 2024, creating a leaner structure.

Fourth Quarter

• Total net revenue was $67.3 million, a 2.3% increase compared with Q4 of 2023. Political revenue of $8.3 million offset weakness in national and local ad spend. Same-station revenue grew 4.4%. Digital accounted for 17.1% of total revenue in Q4 (slight decline from Q3 but total digital revenue increased sequentially). National ex-political revenue declined 4.9% in Q4 (better than Q3's 16% decline). Local over-the-air revenue declined 5.7%, local direct revenue contracted 5%. New business development revenue declined 12.8% year-over-year.

Full Year 2024

• Total net revenue was $240 million, a 2.8% decline compared to 2023. Same-station revenue up 0.2%. Digital revenue as a percentage of total revenue reached 19.4% (up from 18.4% prior year). Consumer services was the largest segment at 24.5%, retail 13.8%, entertainment 15.3%. Sports betting revenue Q4 was $4.1 million, down $1.1 million year-over-year. Auto sector rose to 9% of total revenue in Q4, import segment up 115% year-over-year. Station operating income (SOI) Q4 was $14.1 million, up $4.5 million year-over-year. Full year SOI $38.5 million, roughly in line with 2023; adjusting for severance, SOI in 2024 was $40.8 million vs $39.5 million in 2023. Corporate expenses Q4 totaled $4.7 million. Operating income Q4 was $7.6 million, steady year-over-year. Interest expense Q4 was $3.5 million, down $3.4 million year-over-year. EBITDA Q4 $12.5 million, full year $32.2 million (doubled Q4 and 35% improvement year-over-year).

• Q1 2025: Same-station revenue pacing down roughly 10%, with February performance driving negative overall pacing. Focus on driving digital growth, strengthening advertiser relationships, and executing revenue diversification strategy.
• Cost savings: $20 million in annualized savings already reflected in EBITDA, with further reductions in Q4 over $3 million, expecting full benefit in 2025.

• Advertising market volatility: National ad spend pressure in auto and consumer goods sectors due to proposed tariffs; local ad spend constraints from political inventory. - Industry shifts: Sports betting industry shift towards customer retention impacting ad spend; automotive industry uncertainty due to proposed tariffs affecting marketing budgets. - Regulatory changes: Uncertainty in radio and TV regulatory environment impacting operations.

Q: Political seemed particularly strong for Q4? Were there certain markets that led?

A: Yes, there were. We saw significant political dollars in Charlotte, Philadelphia and Detroit. We also saw meaningful dollars from Las Vegas.

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

A: So, national in Boston is pacing down, but national in Philadelphia is pacing up. So, these two markets combined, we are seeing pacing up. However, overall national pacing is down roughly about 10%, and this is primarily driven by sports betting pullback in Charlotte.

Q: How much of the $20 million of cost savings hit the 2024 numbers?

A: As you can see from the fourth quarter, improvements in EBITDA per indenture prior to our pro forma cost savings already reflect annualized cost savings in excess of $20 million. So, we definitely expect to see the full benefit of these cost savings in 2025. But in addition to that, we made further reductions in Q4 in excess of $3 million, of which only $0.5 million would have hit in Q4. So, you've got an extra, call it, $2.5 million plus in annualized savings that you didn't see in the quarter.

Q: Could you comment on the potential for regulatory changes? Would you be open to station swaps or selling stations to reduce debt?

A: So, the regulatory environment seems ripe for [dereg] (ph) for both radio and TV. And of course, we're very supportive and hopeful that this will occur sooner versus later. As far as being open to swaps or selling stations, we're always open for swaps or sales if the deal is right for the company.