Beasley Broadcast Group Inc 10-Q for FY2024 Q2
Beasley Broadcast Group Inc (BBGI)
About this 10-Q
Beasley Broadcast Group Inc filed this 10-Q on August 14, 2024, covering the quarter ended June 30, 2024 (FY2024 Q2).
Headline figures
Quarter ended June 30, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $60.44M
- down 4.8% from $63.46M a year earlier
- Net loss
- $276.02K
- compared with a net loss of $10.43M a year earlier
- Diluted EPS
- -$0.01
- compared with -$0.35 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period Ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number:
(Exact Name of Registrant as Specified in Its Charter)
(State or other jurisdiction of |
(I.R.S. Employer |
incorporation or organization) |
Identification No.) |
(Address of Principal Executive Offices and Zip Code)
(
(Registrant's Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class |
Trading Symbol |
Name of Each Exchange on which Registered |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
Class A Common Stock, $0.001 par value,
Class B Common Stock, $0.001 par value,
INDEX
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Page No. |
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PART I
FINANCIAL INFORMATION |
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Item 1. |
Condensed Consolidated Financial Statements. |
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7 |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations. |
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12 |
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Item 3. |
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18 |
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Item 4. |
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18 |
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PART II
OTHER INFORMATION |
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Item 1. |
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19 |
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Item 1A. |
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19 |
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Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds. |
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20 |
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Item 3. |
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20 |
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Item 4. |
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20 |
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Item 5. |
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20 |
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Item 6. |
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22 |
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23 |
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BEASLEY BROADCAST GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
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December 31, |
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June 30, |
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2023 |
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2024 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Accounts receivable, less allowance for credit losses of $ |
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Prepaid expenses |
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Other current assets |
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Total current assets |
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Property and equipment, net |
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Operating lease right-of-use assets |
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FCC licenses |
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Goodwill |
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Other intangibles, net |
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Other assets |
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Total assets |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Operating lease liabilities |
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Other current liabilities |
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Total current liabilities |
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Due to related parties |
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Long-term debt, net of unamortized debt issuance costs |
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Operating lease liabilities |
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Deferred tax liabilities |
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Other long-term liabilities |
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Total liabilities |
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Stockholders' equity: |
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Preferred stock, $ |
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Class A common stock, $ |
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Class B common stock, $ |
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Additional paid-in capital |
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Treasury stock, Class A common stock; |
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( |
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( |
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Retained earnings |
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Accumulated other comprehensive income |
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Total stockholders' equity |
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Total liabilities and stockholders' equity |
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$ |
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$ |
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See accompanying notes to condensed consolidated financial statements
3
BEASLEY BROADCAST GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF NET LOSS (UNAUDITED)
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Three Months Ended June 30, |
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2023 |
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2024 |
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Net revenue |
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$ |
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$ |
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Operating expenses: |
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Operating expenses (including stock-based compensation of $ |
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Corporate expenses (including stock-based compensation of $ |
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Depreciation and amortization |
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Impairment loss |
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- |
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Total operating expenses |
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Operating income (loss) |
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( |
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Non-operating income (expense): |
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Interest expense |
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( |
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( |
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Other income, net |
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Loss before income taxes |
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( |
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( |
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Income tax benefit |
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( |
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( |
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Loss before equity in earnings of unconsolidated affiliates |
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( |
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( |
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Equity in earnings of unconsolidated affiliates, net of tax |
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( |
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Net loss |
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( |
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( |
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Net loss per Class A and Class B common share: |
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Basic and diluted |
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$ |
( |
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$ |
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Weighted average shares outstanding: |
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Basic and diluted |
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See accompanying notes to condensed consolidated financial statements
4
BEASLEY BROADCAST GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF NET LOSS (UNAUDITED)
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Six Months Ended June 30, |
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2023 |
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2024 |
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Net revenue |
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$ |
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$ |
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Operating expenses: |
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Operating expenses (including stock-based compensation of $ |
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Corporate expenses (including stock-based compensation of $ |
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Depreciation and amortization |
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Impairment loss |
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- |
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Total operating expenses |
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Operating income (loss) |
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( |
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Non-operating income (expense): |
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Interest expense |
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( |
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( |
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Gain on sale of investment |
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- |
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Other income, net |
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Loss before income taxes |
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( |
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( |
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Income tax benefit |
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( |
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( |
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Loss before equity in earnings of unconsolidated affiliates |
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( |
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( |
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Equity in earnings of unconsolidated affiliates, net of tax |
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( |
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( |
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Net loss |
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( |
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( |
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Net loss per Class A and Class B common share: |
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Basic and diluted |
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$ |
( |
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$ |
( |
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Weighted average shares outstanding: |
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Basic and diluted |
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See accompanying notes to condensed consolidated financial statements
5
BEASLEY BROADCAST GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
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Six Months Ended June 30, |
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2023 |
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2024 |
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Cash flows from operating activities: |
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Net loss |
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$ |
( |
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$ |
( |
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Adjustments to reconcile net loss to net cash provided by operating activities: |
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Stock-based compensation |
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Provision for credit losses |
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Depreciation and amortization |
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Impairment loss |
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- |
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Amortization of loan fees |
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Gain on sale of investment |
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- |
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( |
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Gain on repurchases of long-term debt |
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( |
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- |
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Deferred income taxes |
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( |
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( |
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Equity in earnings of unconsolidated affiliates |
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Change in operating assets and liabilities: |
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Accounts receivable |
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Prepaid expenses |
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( |
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( |
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Other assets |
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( |
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Accounts payable |
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( |
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Other liabilities |
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Other operating activities |
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Net cash provided by operating activities |
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Cash flows from investing activities: |
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Capital expenditures |
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( |
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( |
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Proceeds from sale of investment |
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- |
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Net cash provided by (used in) investing activities |
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( |
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Cash flows from financing activities: |
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Payments on debt |
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( |
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- |
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Purchase of treasury stock |
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( |
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( |
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Net cash used in financing activities |
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( |
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( |
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Net increase (decrease) in cash and cash equivalents |
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( |
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Cash and cash equivalents at beginning of period |
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Cash and cash equivalents at end of period |
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$ |
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$ |
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Cash paid for interest |
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$ |
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$ |
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Cash paid for income taxes |
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$ |
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$ |
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See accompanying notes to condensed consolidated financial statements
6
BEASLEY BROADCAST GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of Beasley Broadcast Group, Inc. and its subsidiaries (the “Company”) included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. These financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the financial statements reflect all adjustments necessary for a fair statement of the financial position and results of operations for the interim periods presented, and all such adjustments are of a normal and recurring nature. The Company’s results are subject to seasonal fluctuations; therefore the results shown on an interim basis are not necessarily indicative of results for the full year.
In December 2023, the Financial Accounting Standards Board (“FASB”) issued guidance which requires additional disclosures primarily related to the Company's income tax rate reconciliation and income taxes paid. The guidance is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments should be applied prospectively. The Company is currently in the process of reviewing the new guidance.
In November 2023, the FASB issued guidance which requires additional disclosures for the Company's reportable segments, primarily related to significant segment expenses. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within the fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. The Company is currently in the process of reviewing the new guidance.
On March 8, 2024, the Company received $
During the second quarter of 2023, due to the potential sale of substantially all of the assets used in the operations of WJBR-FM in Wilmington, DE, the Company recorded an impairment loss of $
Long-term debt is comprised of the following:
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December 31, |
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June 30, |
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2023 |
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2024 |
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Secured notes |
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$ |
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$ |
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Less unamortized debt issuance costs |
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( |
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( |
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$ |
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$ |
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On February 2, 2021, the Company issued $
7
BEASLEY BROADCAST GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
or make other restricted payments; make certain investments or acquisitions; sell, transfer or otherwise convey certain assets; create liens; enter into agreements restricting certain subsidiaries’ ability to pay dividends or make other intercompany transfers; consolidate, merge, sell or otherwise dispose of all or substantially all of its assets; enter into transactions with affiliates; prepay certain kinds of indebtedness; and issue or sell stock of its subsidiaries. Prior to February 1, 2025, the Company will be subject to certain premiums, as defined in the Indenture, for optional or mandatory (upon certain contingent events) redemption of some or all of the Notes.
In the second quarter of 2023, the Company repurchased $
The changes in stockholders’ equity are as follows:
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Three months ended June 30, |
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Six months ended June 30, |
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2023 |
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2024 |
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2023 |
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2024 |
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Beginning balance |
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$ |
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$ |
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$ |
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$ |
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Stock-based compensation |
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Purchase of treasury stock |
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( |
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( |
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( |
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( |
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Net loss |
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( |
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( |
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( |
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( |
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Ending balance |
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$ |
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$ |
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$ |
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$ |
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Net revenue is comprised of the following:
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Three months ended June 30, |
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Six months ended June 30, |
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2023 |
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2024 |
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2023 |
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2024 |
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Audio |
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$ |
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$ |
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$ |
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$ |
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Digital |
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Other |
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- |
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- |
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$ |
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$ |
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$ |
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$ |
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The Company recognizes revenue when it satisfies a performance obligation under a contract with an advertiser. The transaction price is allocated to performance obligations based on executed contracts, which represent relative standalone selling prices. Payment is generally due within 30 days, although certain advertisers are required to pay in advance. Revenues are reported at the amount the Company expects to be entitled to receive under the contract. The Company has elected to use the practical expedient to expense sales commissions as incurred. Payments received from advertisers before the performance obligation is satisfied are recorded as deferred revenue in the balance sheets. Substantially all deferred revenue is recognized within 12 months of the payment date.
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December 31, |
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June 30, |
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2023 |
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2024 |
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Deferred revenue |
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$ |
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$ |
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Audio revenue includes revenue from the sale or trade of aired commercial spots to advertisers directly or through national, regional or local advertising agencies. Each commercial spot is considered a performance obligation. Revenue is recognized when the commercial spots have aired. Trade sales are recorded at the estimated fair value of the goods or services received. If commercial spots are aired before the goods or services are received, then a trade sales receivable is recorded. If goods or services are received before the commercial spots are aired, then a trade sales payable is recorded. Other revenue includes revenue from concerts, promotional events, talent fees and other miscellaneous items. Such revenue is generally recognized when the concert, promotional event, or talent services are completed.
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December 31, |
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June 30, |
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2023 |
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2024 |
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Trade sales receivable |
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$ |
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$ |
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Trade sales payable |
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8
BEASLEY BROADCAST GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
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Three months ended June 30, |
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Six months ended June 30, |
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2023 |
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2024 |
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2023 |
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2024 |
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Trade sales revenue |
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$ |
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$ |
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$ |
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$ |
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Digital revenue includes revenue from the sale of streamed commercial spots, station-owned assets and third-party products. Each streamed commercial spot, station-owned asset and third-party product is considered a performance obligation. Revenue is recognized when the commercial spots have streamed. Station-owned assets are generally scheduled over a period of time and revenue is recognized over time as the digital items are used for advertising content, except for streamed commercial spots. Third-party products are generally scheduled over a period of time with an impression target each month. Revenue from the sale of third-party products is recognized over time as the digital items are used for advertising content and impression targets are met each month. The Company assesses each digital sales order to determine if the Company is operating as the principal or an agent. The Company currently operates as the principal for digital revenue.
The Beasley Broadcast Group, Inc. 2007 Equity Incentive Award Plan (the “2007 Plan”) permits the Company to issue up to
A summary of restricted stock unit activity is presented below:
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Units |
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Weighted-Average Grant-Date Fair Value |
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Unvested as of April 1, 2024 |
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$ |
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Granted |
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Vested |
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( |
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Forfeited |
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( |
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Unvested as of June 30, 2024 |
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$ |
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As of June 30, 2024, there was $
The Company’s effective tax rate was (
9
BEASLEY BROADCAST GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Earnings per share calculation information is as follows:
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Three months ended June 30, |
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Six months ended June 30, |
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2023 |
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2024 |
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2023 |
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2024 |
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Net loss attributable to BBGI stockholders |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
Weighted-average shares outstanding: |
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Basic |
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|
||||
Effect of dilutive restricted stock units |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss attributable to BBGI stockholders per Class A and Class B |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
The Company excluded the effect of restrictive stock units and restricted stock under the treasury stock method when reporting a net loss as the addition of shares was anti-dilutive. As a result, the Company excluded
The carrying amount of the Company’s financial instruments, including cash and cash equivalents, accounts receivable and accounts payable, approximates fair value due to the short-term nature of these financial instruments.
The estimated fair value of the Notes, based on available market information, was $
The Company currently operates two operating and reportable segments (Audio and Digital). The Company also operated an
esports segment until December 13, 2023. The identification of segments is consistent with how the segments report to and are
managed by the Company’s Chief Executive Officer (the Company’s Chief Operating Decision Maker). The Audio segment generates
revenue primarily from the sale of commercial advertising to customers of the Company’s stations in the following markets: Atlanta,
GA, Augusta, GA, Boston, MA, Charlotte, NC, Detroit, MI, Fayetteville, NC, Fort Myers-Naples, FL, Las Vegas, NV, Middlesex, NJ,
Monmouth, NJ, Morristown, NJ, Philadelphia, PA, and Tampa-Saint Petersburg, FL. The Digital segment generates revenue primarily
from the sale of digital advertising to customers of the Company’s stations and other advertisers throughout the United States.
Corporate expenses includes general and administrative expenses and certain other income and expense items not allocated to the
operating segments. Non-operating corporate items, including interest expense and income taxes, are reported in the accompanying
condensed consolidated statements of net loss.
Reportable segment information for the three months ended June 30, 2024 is as follows:
|
|
Audio |
|
|
Digital |
|
|
Corporate |
|
|
Total |
|
||||
Net revenue |
|
$ |
|
|
$ |
|
|
$ |
- |
|
|
$ |
|
|||
Operating expenses |
|
|
|
|
|
|
|
|
- |
|
|
|
|
|||
Corporate expenses |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating income (loss) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
|
|
Audio |
|
|
Digital |
|
|
Corporate |
|
|
Total |
|
||||
Capital expenditures |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
10
BEASLEY BROADCAST GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Reportable segment information for the three months ended June 30, 2023 is as follows:
|
|
Audio |
|
|
Digital |
|
|
Other |
|
|
Corporate |
|
|
Total |
|
|||||
Net revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
- |
|
|
$ |
|
||||
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
|
||||
Corporate expenses |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Impairment losses |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
||
Operating income (loss) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
Audio |
|
|
Digital |
|
|
Other |
|
|
Corporate |
|
|
Total |
|
|||||
Capital expenditures |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Reportable segment information for the six months ended June 30, 2024 is as follows:
|
|
Audio |
|
|
Digital |
|
|
Corporate |
|
|
Total |
|
||||
Net revenue |
|
$ |
|
|
$ |
|
|
$ |
- |
|
|
$ |
|
|||
Operating expenses |
|
|
|
|
|
|
|
|
- |
|
|
|
|
|||
Corporate expenses |
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating income (loss) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
|
|
Audio |
|
|
Digital |
|
|
Corporate |
|
|
Total |
|
||||
Capital expenditures |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Reportable segment information for the six months ended June 30, 2023 is as follows:
|
|
Audio |
|
|
Digital |
|
|
Other |
|
|
Corporate |
|
|
Total |
|
|||||
Net revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
- |
|
|
$ |
|
||||
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
|
||||
Corporate expenses |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Impairment loss |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
||
Operating income (loss) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
||
|
|
Audio |
|
|
Digital |
|
|
Other |
|
|
Corporate |
|
|
Total |
|
|||||
Capital expenditures |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Reportable segment information as of June 30, 2024 is as follows:
|
|
Audio |
|
|
Digital |
|
|
Corporate |
|
|
Total |
|
||||
Property and equipment, net |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
FCC licenses |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
||
Goodwill |
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
||
Other intangibles, net |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Reportable segment information as of December 31, 2023 is as follows:
|
|
Audio |
|
|
Digital |
|
|
Other |
|
|
Corporate |
|
|
Total |
|
|||||
Property and equipment, net |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
FCC licenses |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
||
Goodwill |
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
|
||||
Other intangibles, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
11
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
General
We are a multi-platform media company whose primary business is operating radio stations throughout the United States. We offer local and national advertisers integrated marketing solutions across audio, digital and event platforms. We own and operate stations in the following markets: Atlanta, GA, Augusta, GA, Boston, MA, Charlotte, NC, Detroit, MI, Fayetteville, NC, Fort Myers- Naples, FL, Las Vegas, NV, Middlesex, NJ, Monmouth, NJ, Morristown, NJ, Philadelphia, PA, and Tampa-Saint Petersburg, FL. We refer to each group of stations in each market as a market cluster. Unless the context otherwise requires, all references in this report to the “Company,” “we,” “us” or “our” are to Beasley Broadcast Group, Inc. and its subsidiaries.
Cautionary Note Regarding Forward-Looking Statements
This report contains “forward-looking statements” about the Company within the meaning of the Private Securities Litigation Reform Act of 1995, which relate to future, not past, events. All statements other than statements of historical fact included in this document are forward-looking statements. These forward-looking statements are based on the current beliefs and expectations of the Company’s management and are subject to known and unknown risks and uncertainties. Forward-looking statements, which address the Company’s expected business and financial performance and financial condition, among other matters, contain words such as: “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates,” “may,” “will,” “plans,” “projects,” “could,” “should,” “would,” “seek,” “forecast,” or other similar expressions.
Forward-looking statements, by their nature, address matters that are, to different degrees, uncertain. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. The Company undertakes no obligation to update or revise any forward-looking statements.
Forward-looking statements involve a number of risks and uncertainties, and actual results or events may differ materially from those projected or implied in those statements. Factors that could cause actual results or events to differ materially from these forward-looking statements include, but are not limited to:
12
Although we believe the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. We do not intend, and undertake no obligation, to update any forward-looking statement.
Financial Statement Presentation
The following discussion provides a brief description of certain key items that appear in our financial statements and general factors that impact these items.
Net Revenue. Our net revenue is primarily derived from the sale of commercial spots to advertisers directly or through national, regional or local advertising agencies. Revenues are reported at the amount we expect to be entitled to receive under the contract. Local revenue generally consists of commercial advertising sales, digital advertising sales and other sales to advertisers in a station’s local market, either directly to the advertiser or through the advertiser’s agency. National revenue generally consists of commercial advertising sales through advertiser agencies. National advertiser agencies generally purchase advertising for multiple markets. National sales are generally facilitated by our national representation firm, which serves as our agent in these transactions.
Our net revenue is generally determined by the advertising rates that we are able to charge and the number of advertisements that we can broadcast without jeopardizing listener levels. Advertising rates are primarily based on the following factors:
13
Our net revenue is affected by general economic conditions, competition and our ability to improve operations at our radio market clusters. Seasonal revenue fluctuations are also common in the radio broadcasting industry and are primarily due to variations in advertising expenditures by local and national advertisers. Our revenues typically are lowest in the first calendar quarter of the year. In addition, our revenues tend to fluctuate between years, consistent with, among other things, increased advertising expenditures in even-numbered years by political candidates, political parties and special interest groups. This political spending typically is heaviest during the fourth quarter of such years.
We use trade sales agreements to reduce cash paid for operating costs and expenses by exchanging advertising airtime for goods or services; however, we endeavor to minimize trade revenue in order to maximize cash revenue from our available airtime.
We also continue to invest in digital support services to develop and promote our station websites, applications, and other distribution platforms. We derive revenue from our websites through the sale of advertiser promotions and advertising on our websites and the sale of advertising airtime during audio streaming of our stations over the internet. We also generate revenue from selling third-party digital products and services.
Operating Expenses. Our operating expenses consist primarily of programming, engineering, sales, advertising and promotion, and general and administrative expenses incurred at our stations. We strive to control our operating expenses by centralizing certain functions at our corporate offices and consolidating certain functions in each of our market clusters.
Critical Accounting Estimates
The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect
reported amounts and related disclosures. We consider an accounting estimate to be critical if:
Our critical accounting estimates are described in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023. There have been no additional material changes to our critical accounting estimates during the six months ended June 30, 2024.
Recent Accounting Pronouncements
Recent accounting pronouncements are described in Note 2 to the accompanying condensed consolidated financial statements.
Three Months Ended June 30, 2024 Compared to the Three Months Ended June 30, 2023
The following summary table presents a comparison of our results of operations for the three months ended June 30, 2023 and 2024, with respect to certain of our key financial measures. The changes illustrated in the table are discussed in greater detail below. This section should be read in conjunction with the condensed consolidated financial statements and notes to condensed consolidated financial statements included in Part I, Item 1 of this report.
Results of Operations - Consolidated
|
|
Three Months Ended June 30, |
|
|
Change |
|
||||||||||
|
|
2023 |
|
|
2024 |
|
|
$ |
|
|
% |
|
||||
Net revenue |
|
$ |
63,461,723 |
|
|
$ |
60,435,657 |
|
|
$ |
(3,026,066 |
) |
|
|
(4.8 |
)% |
Operating expenses |
|
|
51,327,562 |
|
|
|
49,347,793 |
|
|
|
(1,979,769 |
) |
|
|
(3.9 |
)% |
Corporate expenses |
|
|
4,405,031 |
|
|
|
3,879,771 |
|
|
|
(525,260 |
) |
|
|
(11.9 |
)% |
Impairment loss |
|
|
10,041,000 |
|
|
|
- |
|
|
|
(10,041,000 |
) |
|
|
(100.0 |
)% |
Interest expense |
|
|
6,724,469 |
|
|
|
6,092,829 |
|
|
|
(631,640 |
) |
|
|
(9.4 |
)% |
Income tax benefit |
|
|
821,836 |
|
|
|
75,986 |
|
|
|
(745,850 |
) |
|
|
(90.8 |
)% |
Net loss |
|
|
10,430,629 |
|
|
|
276,021 |
|
|
|
(10,154,608 |
) |
|
|
(97.4 |
)% |
14
Results of Operations - Segments
|
|
Three Months Ended June 30, |
|
|
Change |
|
||||||||||
|
|
2023 |
|
|
2024 |
|
|
$ |
|
|
% |
|
||||
Net revenue |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Audio |
|
$ |
50,448,093 |
|
|
$ |
47,430,080 |
|
|
$ |
(3,018,013 |
) |
|
|
(6.0 |
)% |
Digital |
|
|
12,301,269 |
|
|
|
13,005,577 |
|
|
|
704,308 |
|
|
|
5.7 |
% |
Other |
|
|
712,361 |
|
|
|
- |
|
|
|
(712,361 |
) |
|
|
(100.0 |
)% |
|
|
$ |
63,461,723 |
|
|
$ |
60,435,657 |
|
|
$ |
(3,026,066 |
) |
|
|
(4.8 |
)% |
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Audio |
|
$ |
39,369,033 |
|
|
$ |
39,468,898 |
|
|
$ |
99,865 |
|
|
|
0.3 |
% |
Digital |
|
|
10,786,584 |
|
|
|
9,878,895 |
|
|
|
(907,689 |
) |
|
|
(8.4 |
)% |
Other |
|
|
1,171,945 |
|
|
|
- |
|
|
|
(1,171,945 |
) |
|
|
(100.0 |
)% |
|
|
$ |
51,327,562 |
|
|
$ |
49,347,793 |
|
|
$ |
(1,979,769 |
) |
|
|
(3.9 |
)% |
Net Revenue. Net revenue decreased $3.0 million during the three months ended June 30, 2024 as compared to the three months ended June 30, 2023. Audio revenue decreased $3.0 million during the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, primarily due to a decrease in local agency and direct revenue and the disposition of WJBR-FM in Wilmington, DE in October 2023. Digital revenue increased $0.7 million during the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, primarily due to continued growth in the digital segment. Other revenue decreased $0.7 million during the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, due to the termination of our esports operations in December 2023.
Operating Expenses. Operating expenses decreased $2.0 million during the three months ended June 30, 2024 as compared to the three months ended June 30, 2023. Audio operating expenses increased $0.1 million during the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, primarily due to an increase in compensation expense related to workforce reductions, partially offset by the disposition of WJBR-FM in Wilmington, DE in October 2023. Digital operating expenses decreased $0.9 million during the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, primarily due to expense management in the digital segment. Other operating expenses decreased $1.2 million during the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, due to the termination of our esports operations in December 2023.
Corporate Expenses. Corporate expenses decreased $0.5 million during the three months ended June 30, 2024 as compared to the three months ended June 30, 2023, primarily due to an increase in digital expenses allocated to operating expenses.
Impairment Loss. During the second quarter of 2023, due to the potential sale of substantially all of the assets used in the operations of WJBR-FM in Wilmington, DE, we recorded an impairment loss of $10.0 million related to the FCC license.
Interest Expense. Interest expense decreased $0.6 million during the three months ended June 30, 2024 as compared to the three months ended June 30, 2023 due to repurchases of the Notes throughout 2023.
Income Tax Benefit. Our effective tax rate was approximately (7)% and (21)% for the three months ended June 30, 2023 and 2024, respectively. These rates differ from the federal statutory rate of 21% due to the effect of state income taxes and certain expenses that are not deductible for tax purposes.
Net Loss. Net loss for the three months ended June 30, 2024 was $0.3 million compared to a net loss of $10.4 million for the three months ended June 30, 2023, as a result of the factors described above.
Six Months Ended June 30, 2024 Compared to the Six Months Ended June 30, 2023
The following summary table presents a comparison of our results of operations for the six months ended June 30, 2023 and 2024, with respect to certain of our key financial measures. The changes illustrated in the table are discussed in greater detail below. This section should be read in conjunction with the condensed consolidated financial statements and notes to condensed consolidated financial statements included in Item 1 of this report.
15
Results of Operations - Consolidated
|
|
Six Months Ended June 30, |
|
|
Change |
|
||||||||||
|
|
2023 |
|
|
2024 |
|
|
$ |
|
|
% |
|
||||
Net revenue |
|
$ |
121,240,843 |
|
|
$ |
114,816,003 |
|
|
$ |
(6,424,840 |
) |
|
|
(5.3 |
)% |
Operating expenses |
|
|
101,981,217 |
|
|
|
98,588,791 |
|
|
|
(3,392,426 |
) |
|
|
(3.3 |
)% |
Corporate expenses |
|
|
8,888,126 |
|
|
|
8,287,603 |
|
|
|
(600,523 |
) |
|
|
(6.8 |
)% |
Impairment loss |
|
|
10,041,000 |
|
|
|
- |
|
|
|
(10,041,000 |
) |
|
|
(100.0 |
)% |
Interest expense |
|
|
13,318,321 |
|
|
|
11,680,137 |
|
|
|
(1,638,184 |
) |
|
|
(12.3 |
)% |
Gain on sale of investment |
|
|
— |
|
|
|
6,026,776 |
|
|
|
6,026,776 |
|
|
|
— |
|
Income tax benefit |
|
|
2,985,819 |
|
|
|
486,216 |
|
|
|
(2,499,603 |
) |
|
|
(83.7 |
)% |
Net loss |
|
|
13,967,195 |
|
|
|
268,051 |
|
|
|
(13,699,144 |
) |
|
|
(98.1 |
)% |
Results of Operations - Segments
|
|
Six Months Ended June 30, |
|
|
Change |
|
||||||||||
|
|
2023 |
|
|
2024 |
|
|
$ |
|
|
% |
|
||||
Net revenue |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Audio |
|
$ |
97,866,059 |
|
|
$ |
90,858,207 |
|
|
$ |
(7,007,852 |
) |
|
|
(7.2 |
)% |
Digital |
|
|
22,278,054 |
|
|
|
23,957,796 |
|
|
|
1,679,742 |
|
|
|
7.5 |
% |
Other |
|
|
1,096,730 |
|
|
|
- |
|
|
|
(1,096,730 |
) |
|
|
(100.0 |
)% |
|
|
$ |
121,240,843 |
|
|
$ |
114,816,003 |
|
|
$ |
(6,424,840 |
) |
|
|
(5.3 |
)% |
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Audio |
|
$ |
79,268,627 |
|
|
$ |
77,901,810 |
|
|
$ |
(1,366,817 |
) |
|
|
(1.7 |
)% |
Digital |
|
|
20,694,181 |
|
|
|
20,686,981 |
|
|
|
(7,200 |
) |
|
|
(0.0 |
)% |
Other |
|
|
2,018,409 |
|
|
|
- |
|
|
|
(2,018,409 |
) |
|
|
(100.0 |
)% |
|
|
$ |
101,981,217 |
|
|
$ |
98,588,791 |
|
|
$ |
(3,392,426 |
) |
|
|
(3.3 |
)% |
Net Revenue. Net revenue decreased $6.4 million during the six months ended June 30, 2024 as compared to the six months ended June 30, 2023. Audio revenue decreased $7.0 million during the six months ended June 30, 2024 as compared to the six months ended June 30, 2023, primarily due to a decrease in local agency and direct revenue and the disposition of WJBR-FM in Wilmington, DE in October 2023. Digital revenue increased $1.7 million during the six months ended June 30, 2024 as compared to the six months ended June 30, 2023, primarily due to continued growth in the digital segment. Other revenue decreased $1.1 million during the six months ended June 30, 2024 as compared to the six months ended June 30, 2023, due to the termination of our esports operations in December 2023.
Operating Expenses. Operating expenses decreased $3.4 million during the six months ended June 30, 2024 as compared to the six months ended June 30, 2023. Audio operating expenses decreased $1.4 million during the six months ended June 30, 2024 as compared to the six months ended June 30, 2023, primarily due to the disposition of WJBR-FM in Wilmington, DE in October 2023, partially offset by an increase in compensation expense related to workforce reductions. Digital operating expenses during the six months ended June 30, 2024 were comparable to the six months ended June 30, 2023. Other operating expenses decreased $2.0 million during the six months ended June 30, 2024 as compared to the six months ended June 30, 2023, due to the termination of our esports operations in December 2023.
Corporate Expenses. Corporate expenses decreased $0.6 million during the six months ended June 30, 2024 as compared to the six months ended June 30, 2023, primarily due to an increase in digital expenses allocated to operating expenses.
Impairment Loss. During the second quarter of 2023, due to the potential sale of substantially all of the assets used in the operations of WJBR-FM in Wilmington, DE, we recorded an impairment loss of $10.0 million related to the FCC license.
Interest Expense. Interest expense decreased $1.6 million during the six months ended June 30, 2024 as compared to the six months ended June 30, 2023 due to repurchases of the Notes throughout 2023.
Gain on Sale of Investment. On March 8, 2024, we received $6.0 million related to the sale of an investment in Broadcast Music,
Inc. and recorded a gain of $6.0 million.
16
Income Tax Benefit. Our effective tax rate was approximately (18)% and (64)% for the six months ended June 30, 2023 and 2024, respectively. These rates differ from the federal statutory rate of 21% due to the effect of state income taxes and certain expenses that are not deductible for tax purposes.
Net Loss. Net loss for the six months ended June 30, 2024 was $0.3 million compared to a net loss of $14.0 million for the six months ended June 30, 2023, as a result of the factors described above.
Liquidity and Capital Resources
Overview. Our primary sources of liquidity are internally generated cash flow and cash on hand. Our primary liquidity needs have been, and for the next 12 months and thereafter are expected to continue to be, for working capital, debt service, and other general corporate purposes, including capital expenditures and station acquisitions. Historically, our capital expenditures have not been significant. In addition to property and equipment associated with station acquisitions, our capital expenditures have generally been, and are expected to continue to be, related to the maintenance of our office and studio space, the maintenance of our towers and equipment, and digital products and information technology. We have also purchased or constructed office and studio space in some of our markets to facilitate the consolidation of our operations.
Our board of directors has suspended future quarterly dividend payments until it is determined that resumption of dividend
payments is in the best interest of the Company’s stockholders. In addition, as discussed in “Secured Notes” below, the Indenture
governing our Notes limits our ability to pay dividends.
Secured Notes. On February 2, 2021, we issued $300.0 million aggregate principal amount of 8.625% senior secured notes due on February 1, 2026 (the “Notes”) under an indenture dated February 2, 2021 (the “Indenture”). Interest on the Notes accrues at the rate of 8.625% per annum and is payable semiannually in arrears on February 1 and August 1 of each year. The Notes are secured on a first-lien priority basis by substantially all assets of the Company and its majority-owned subsidiaries and are guaranteed jointly and severally by the Company and its majority-owned subsidiaries. The Indenture contains restrictive covenants that limit the ability of the Company and its subsidiaries to, among other things, incur additional indebtedness, guarantee indebtedness or issue disqualified stock or, in the case of such subsidiaries, preferred stock; pay dividends on, repurchase or make distributions in respect of our capital stock or make other restricted payments; make certain investments or acquisitions; sell, transfer or otherwise convey certain assets; create liens; enter into agreements restricting certain subsidiaries’ ability to pay dividends or make other intercompany transfers; consolidate, merge, sell or otherwise dispose of all or substantially all of our assets; enter into transactions with affiliates; prepay certain kinds of indebtedness; and issue or sell stock of our subsidiaries.
In the second quarter of 2023, we repurchased $3.0 million principal amount of the Notes for a price equal to 66% of the principal amount and recorded a gain of $1.0 million as a result of the repurchase.
From time to time, we repurchase sufficient shares of our Class A common stock to fund withholding taxes in connection with the vesting of restricted stock units. We paid approximately $37,000 to repurchase 52,579 shares during the six months ended June 30, 2024. From time to time, we may seek to repurchase, redeem or otherwise retire our Notes through cash purchases and/or exchanges for equity securities, in open market purchases, privately negotiated transactions, tender offers or otherwise. Such repurchases, redemptions or other transactions, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions, and other factors. The amounts involved may be material.
We expect to provide for future liquidity needs through one or a combination of the following sources of liquidity:
We believe we will have sufficient liquidity and capital resources to permit us to provide for our liquidity requirements and meet our financial obligations for the next 12 months and thereafter. However, poor financial results or unanticipated expenses could give rise to default under the Notes, additional debt servicing requirements or other additional financing or liquidity requirements sooner than we expect, and we may not secure financing when needed or on acceptable terms.
Off-Balance Sheet Arrangements. We did not have any off-balance sheet arrangements as of June 30, 2024.
17
Cash Flows. The following summary table presents a comparison of our cash flows for the six months ended June 30, 2023 and 2024 with respect to certain of our key measures affecting our liquidity. The changes set forth in the table are discussed in greater detail below. This section should be read in conjunction with the condensed consolidated financial statements and notes to condensed consolidated financial statements included in Part I, Item 1 of this report.
|
|
Six Months Ended June 30, |
|
|||||
|
|
2023 |
|
|
2024 |
|
||
Net cash provided by operating activities |
|
$ |
23,711 |
|
|
$ |
2,555,826 |
|
Net cash provided by (used in) investing activities |
|
|
(2,016,185 |
) |
|
|
4,041,925 |
|
Net cash used in financing activities |
|
|
(2,051,517 |
) |
|
|
(37,485 |
) |
Net increase (decrease) in cash and cash equivalents |
|
$ |
(4,043,991 |
) |
|
$ |
6,560,266 |
|
Net Cash Provided By Operating Activities. Net cash provided by operating activities was $2.6 million during the six months ended June 30, 2024, as compared to net cash provided by operating activities of approximately $24,000 during the six months ended June 30, 2023. The $2.5 million increase in net cash provided by operating activities was primarily due to a $1.1 million decrease in interest payments, a $1.0 million increase in other income, net, a $0.9 million decrease in income tax payments, and a $0.7 million decrease in cash paid for corporate expenses, partially offset by a $1.0 decrease in cash receipts from revenue.
Net Cash Provided By (Used In) Investing Activities. Net cash provided by investing activities during the six months ended June 30, 2024 included proceeds of $6.0 million from the sale of an investment, partially offset by payments of $2.0 million for capital expenditures. Net cash used in investing activities for the same period in 2023 included payments of $2.0 million for capital expenditures.
Net Cash Used In Financing Activities. Net cash used in financing activities during the six months ended June 30, 2023 included Notes repurchases of $2.0 million.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not required for smaller reporting companies.
ITEM 4. CONTROLS AND PROCEDURES.
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective as of the end of the period covered by this report.
There were no changes in our internal control over financial reporting during the quarter ended June 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
18
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
We currently and from time to time are involved in ordinary routine litigation and are the subject of threats of litigation that are incidental to the conduct of our business. These include indecency claims and related proceedings at the FCC, as well as claims and threatened claims by private third parties. However, we are not a party to any lawsuit or other proceedings, or the subject of any threatened lawsuit or other proceedings, which, in the opinion of management, is likely to have a material adverse effect on our financial condition or results of operations.
ITEM 1A. RISK FACTORS.
Except for the risk factor discussed below, there have been no material changes to the risks affecting our Company as previously
disclosed in Part I, Item 1A, “Risk Factors” of our annual report on Form 10-K for the year ended December 31, 2023.
There can be no assurance that we will be able to comply with the continued listing standards of the Nasdaq Capital Market.
Our Class A common stock, par value $0.001 per share (the “Common Stock”) is currently listed for trading on the Nasdaq Capital Market, and we must satisfy certain continued listing requirements to maintain the listing. On April 27, 2023, we received a written notice from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) notifying us that, for the last 30 consecutive business days, the bid price for the Common Stock had closed below the $1.00 per share minimum bid price requirement for continued inclusion on the Nasdaq Global Market pursuant to Nasdaq Listing Rule 5450(a)(1) (the “Minimum Bid Price Requirement”). On May 19, 2023, we received a notice from Nasdaq notifying us that we had regained compliance with the Minimum Bid Price Requirement and that the matter was closed.
On October 13, 2023, we received a written notice from the Listing Qualifications Department of Nasdaq notifying us that, for the last 30 consecutive business days, the bid price for the Common Stock had closed below the Minimum Bid Price Requirement. In accordance with Nasdaq rules, we were provided with a period of 180 calendar days, or until April 10, 2024, to regain compliance.
On April 16, 2024, we received approval from Nasdaq to transfer the listing of the Common Stock from the Nasdaq Global Market to the Nasdaq Capital Market (the “Approval”). The Common Stock was transferred to the Nasdaq Capital Market at the opening of business on April 18, 2024, and continues to trade under the symbol “BBGI.” As a result of the Approval, we were granted an additional 180-day compliance period, or until October 7, 2024, to regain compliance with the Minimum Bid Price Requirement. To regain compliance with the Minimum Bid Price Requirement and qualify for continued listing on the Nasdaq Capital Market, the minimum bid price per share of the Company’s Common Stock must be at least $1.00 for at least ten consecutive business days during the additional 180-day compliance period.
We intend to actively monitor the closing bid price of the Common Stock and will consider all reasonable available options to regain compliance with the Minimum Bid Price Requirement, which may include seeking stockholder approval to effect a reverse stock split. There can be no assurance that we will regain compliance with the Minimum Bid Price Requirement by October 7, 2024, maintain compliance with the other Nasdaq listing requirements or be successful in appealing any delisting determination.
If we are delisted from Nasdaq but obtain a substitute listing for the Common Stock, it will likely be on a market with less liquidity, and therefore experience potentially more price volatility than experienced on Nasdaq. Stockholders may not be able to sell their shares of the Common Stock on any such substitute market in the quantities, at the times, or at the prices that could potentially be available on a more liquid trading market. As a result of these factors, if the Common Stock is delisted from Nasdaq, the value and liquidity of the Common Stock would likely be significantly adversely affected.
19
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
Repurchases of Equity Securities
The following table presents information with respect to purchases we made of our Common Stock during the three months ended June 30, 2024.
Period |
|
Total Number of Shares Purchased |
|
|
Average Price Paid per Share |
|
|
Total Number of Shares Purchased as Part of Publicly Announced Program |
|
|
Approximate Dollar Value of Shares |
|
||||
April 1 – 30, 2024 |
|
|
- |
|
|
$ |
- |
|
|
|
- |
|
|
|
- |
|
May 1 – 31, 2024 |
|
|
7,416 |
|
|
$ |
0.67 |
|
|
|
- |
|
|
|
- |
|
June 1 – 30, 2024 |
|
|
30,505 |
|
|
$ |
0.65 |
|
|
|
- |
|
|
|
- |
|
Total |
|
|
37,921 |
|
|
|
|
|
|
|
|
|
|
|||
On March 27, 2007, our board of directors approved the Beasley Broadcast Group, Inc. 2007 Equity Incentive Award Plan (the “2007 Plan”). The original 10-year term of the 2007 Plan ended on March 27, 2017. Our stockholders approved an amendment to the 2007 Plan at the Annual Meeting of Stockholders on June 8, 2017 to, among other things, extend the term of the 2007 Plan until March 27, 2027. The 2007 Plan permits us to purchase sufficient shares to fund withholding taxes in connection with the vesting of restricted stock units. All shares purchased during the three months ended June 30, 2024 were purchased to fund withholding taxes in connection with the vesting of restricted stock units.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
ITEM 5. OTHER INFORMATION.
During the three months ended June 30, 2024,
trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.
Employment Agreement of Bruce G. Beasley
On August 14, 2024, Bruce G. Beasley was appointed as Vice Chair of the Board of Directors (the “Board”) of the Company. Mr. Bruce Beasley will continue in his role as President of the Company.
In connection with his appointment as Vice Chair, the Company entered into an amended and restated employment agreement with Mr. Bruce Beasley, effective as of August 14, 2024 (the “Employment Agreement”), which amends and restates his prior employment agreement with the Company, dated as of September 20, 2021, with the following changes:
20
The foregoing summary of the Employment Agreement does not purport to be complete and is qualified by reference to the full text of the Employment Agreement, which is filed as Exhibit 10.1 hereto and incorporated herein by reference.
Employment Agreements of Caroline Beasley and Brian E. Beasley
On August 14, 2024, each of Caroline Beasley, the Company’s Chief Executive Officer, and Brian E. Beasley, the Company’s Chief Operating Officer, entered into a letter agreement with the Company (each, a “Letter Agreement”) pursuant to which each agreed to extend the term of her or his respective employment agreement with the Company for an additional three-year term expiring on July 1, 2027. In connection with such extension, a portion of the cash severance payable under the applicable employment agreement was revised such that, upon a Qualifying Termination, each of Ms. Caroline Beasley and Mr. Brian Beasley will be entitled to receive, in addition to any other amounts provided under their respective employment agreements, her or his annual base salary (as such term is defined in the applicable employment agreement) until July 1, 2027 or for one year, whichever is greater.
The foregoing summary of the Letter Agreements does not purport to be complete and is qualified by reference to the full text of the Letter Agreements, which are filed as Exhibit 10.2 and Exhibit 10.3 hereto and incorporated herein by reference.
Restricted Stock Unit Grants
In connection with entering into the Employment Agreement and the Letter Agreements, on August 14, 2024, Mr. Bruce Beasley, Ms. Caroline Beasley and Mr. Brian Beasley were each granted restricted stock units under the Company’s 2007 Equity Incentive Award Plan in the following amounts: Mr. Bruce Beasley (162,500), Ms. Caroline Beasley (450,000) and Mr. Brian Beasley (380,000). A portion of each award of restricted stock units was vested on the grant date, and the remainder will vest in equal installments on each of June 30, 2025, 2026 and 2027, subject to the executive’s continued service with the Company through each such vesting date and accelerated vesting of a pro-rata portion of the restricted stock units in the event of the executive’s termination due to death or disability.
21
ITEM 6. EXHIBITS.
Exhibit Number |
|
Description |
10.1* |
|
|
10.2* |
|
|
10.3* |
|
|
31.1 |
|
|
31.2 |
|
|
32.1** |
|
|
32.2** |
|
|
101.INS |
|
XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
101.SCH |
|
XBRL Taxonomy Extension Schema With Embedded Linkbase Document. |
104 |
|
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). |
* Indicates a management contract or compensatory plan or arrangement required to be filed as an exhibit to this report.
** This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is
not incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general
incorporation language in such filing.
22
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
BEASLEY BROADCAST GROUP, INC. |
|
|
|
Dated: August 14, 2024 |
|
/s/ Caroline Beasley |
|
|
Name: Caroline Beasley |
|
|
Title: Chief Executive Officer (principal executive officer) |
|
|
|
Dated: August 14, 2024 |
|
/s/ Marie Tedesco |
|
|
Name: Marie Tedesco |
|
|
Title: Chief Financial Officer (principal financial and accounting officer) |
23
Exhibit 10.1
AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT (“Agreement”) effective as of August 14, 2024 (the “Effective Date”), is made by and between Beasley Broadcast Group, Inc., a Delaware limited liability company (together with any successor thereto, the “Company”) and Bruce G. Beasley (the “Executive”).
WHEREAS, the Company and the Executive have entered into an Executive Employment Agreement, dated September 20, 2021 (the “Prior Employment Agreement”) and the Executive has been and is now employed by the Company;
WHEREAS, the Company desires to continue to assure itself of the services of the Executive and to continue to employ the Executive, and the Executive desires to continue to commit himself to serve the Company and to continue to be employed by the Company, on the terms herein provided; and
WHEREAS, the Company and the Executive desire to amend and restate the Prior Employment Agreement in its entirety with this Agreement effective as of the Effective Date;
NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and agreements set forth below the parties hereto agree as follows:
Notwithstanding the foregoing, the Executive expressly acknowledges and agrees that none of the changes to Executive’s terms and conditions of employment as provided for under this Agreement shall constitute “Good Reason”.
The Executive’s employment hereunder and the Term may be terminated by the Company or the Executive, as applicable, without any breach of this Agreement only under the following circumstances:
It is recognized and acknowledged by the Executive that a breach of the covenants contained in Sections 7 and 8 will cause irreparable damage to Company and its goodwill, the exact amount of which will be difficult or impossible to ascertain, and that the remedies at law for any such breach will be inadequate. Accordingly, the Executive agrees that in the event of a breach of any of the covenants contained in Sections 7 and 8, in addition to any other remedy which may be available at law or in equity, the Company will be entitled to seek specific performance and injunctive relief.
This Agreement shall be binding upon and inure to the benefit of the Company, the Executive and their respective successors, assigns, personnel and legal representatives, executors, administrators, heirs, distributees, devisees, and legatees, as applicable. The Company may assign its rights and obligations under this Agreement to any successor to all or substantially all of the business or the assets of the Company. The Executive may not assign the Executive’s rights or obligations under this Agreement other than the Executive’s rights to payments hereunder, which may only be assigned by will or the operation of the laws of descent and distribution.
This Agreement shall be governed, construed, interpreted and enforced in accordance with the substantive laws of the State of Florida, without reference to the principles of conflicts of law of the State of Florida or any other jurisdiction, and where applicable, the laws of the United States. Executive agrees that any claim arising out of or relating to this Agreement shall be brought exclusively in the state or federal courts of competent jurisdiction for Collier County, Florida. Executive consents to the personal jurisdiction of such courts and thereby waives: (a) any objection to jurisdiction or venue; or (b) any defense claiming lack of jurisdiction or improper venue, in any action brought in such courts. Executive further acknowledges that Employee is executing this Agreement in the State of Florida.
The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.
Any notice, request, claim, demand, document and other communication hereunder to any party shall be effective upon receipt (or refusal of receipt) and shall be in writing and delivered personally or sent by overnight courier service or certified or registered mail, postage prepaid, as follows:
Beasley Broadcast Group, Inc.
3033 Riviera Drive, Suite 200
Naples, Florida 34103
Attn: Chief Executive Officer
With a copy to: Beasley Broadcast Group, Inc.
3033 Riviera Drive, Suite 200
Naples, Florida 34103
Attn: General Counsel
If to the Executive, to his at the address set forth below under his signature; or at any other address as any party shall have specified by notice in writing to the other parties.
This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same Agreement.
The terms of this Agreement are intended by the parties to be the final expression of their agreement with respect to the employment of the Executive by the Company and may not be contradicted by evidence of any prior or contemporaneous agreement. The parties further intend that this Agreement shall constitute the complete and exclusive statement of its terms and that no extrinsic evidence whatsoever may be introduced in any judicial, administrative, or other legal proceeding to vary the terms of this Agreement. The parties agree that this Agreement replaces and supersedes the Prior Employment Agreement in its entirety.
This Agreement may not be modified, amended, or terminated except by an instrument in writing, signed by the Executive and a duly authorized officer of the Company. By an instrument in writing similarly executed, the Executive or the Company may waive compliance by the other party or parties with any provision of this Agreement that such other party was or is obligated to comply with or perform, provided, however, that such waiver shall not operate as a waiver of, or estoppel with respect to, any other or subsequent failure. No failure to exercise and no delay in exercising any right, remedy, or power hereunder preclude any other or further exercise of any other right, remedy, or power provided herein or by law or in equity.
The parties hereto shall not voluntarily undertake or fail to undertake any action or course of action inconsistent with the provisions or essential intent of this Agreement. Furthermore, it is the intent of the parties hereto to act in a fair and reasonable manner with respect to the interpretation and application of the provisions of this Agreement.
Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration, conducted before a panel of three arbitrators in Collier County, Florida in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator’s award in any court having jurisdiction; provided, however, that the Company shall be entitled to seek a restraining order or injunction in any court of competent jurisdiction to prevent any continuation of any violation of the provisions of Sections 7 or 8 of this Agreement and the Executive hereby consents that such restraining order or injunction may be granted without the necessity of the Company’s posting any bond. The fees and expense of the arbitrator shall be borne by the Company. The prevailing party in any action or arbitration proceeding hereunder shall be entitled to recover its reasonable attorney’s fees and costs from the other party.
All compensation received by Executive shall be subject to the provisions of the Company’s Policy for Recovery of Erroneously Awarded Compensation and any other claw-back or recoupment policy implemented by the Company, including any policy intended to comply with applicable law, regulation or stock exchange rule.
.
The Company shall be entitled to withhold from any amounts payable under this Agreement, any federal, state, local or foreign withholding or other taxes or charges which the Company is required to withhold.
Notwithstanding anything to the contrary in this Agreement, if at the time of the Executive’s separation from service with the Company, the Executive is a “specified employee” as defined in Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), as determined by the Company in accordance with Section 409A of the Code, and the deferral of the commencement of any payments or benefits otherwise payable hereunder as a result of such separation from service is necessary in order to prevent any
accelerated or additional tax under Section 409A of the Code, then the Company will defer the commencement of the payment of any such payments or benefits hereunder (without any reduction in the payments or benefits ultimately paid or provided to the Executive) until the date that is at least six (6) months following the Executive’s separation from service with the Company (or the earliest date permitted under Section 409A of the Code), whereupon the Company will pay the Executive a lump-sum amount equal to the cumulative amounts that would have otherwise been previously paid to the Executive under this Agreement during the period in which such payments or benefits were deferred. Thereafter, payments will resume in accordance with this Agreement. For purposes of Section 409A of the Code, the Executive’s right to receive any installment payments under this Agreement, including each payment made after a “separation from service,” will be considered as a right to receive a series of separate payments.
This Agreement is intended to be written, administered, interpreted and construed in a manner such that no payment or benefits provided under the Agreement become subject to (a) the gross income inclusion set forth within Code Section 409A(a)(1)(A) or (b) the interest and additional tax set forth within Code Section 409A(a)(1)(B) (together, referred to herein as the “Section 409A Penalties”), including, where appropriate, the construction of defined terms to have meanings that would not cause the imposition of Section 409A Penalties. In no event shall the Company be required to provide a tax gross-up payment to Executive with respect to Section 409A Penalties.
Notwithstanding anything to the contrary in this Agreement, in-kind benefits and reimbursements provided under this Agreement during any calendar year shall not affect in-kind benefits or reimbursements to be provided in any other calendar year, other than an arrangement providing for the reimbursement of medical expenses referred to in Section 105(b) of the Code, and are not subject to liquidation or exchange for another benefit. Notwithstanding anything to the contrary in this Agreement, reimbursement requests must be timely submitted by the Executive and, if timely submitted, reimbursement payments shall be promptly made to the Executive following such submission, but in no event later than December 31st of the calendar year following the calendar year in which the expense was incurred. In no event shall the Executive be entitled to any reimbursement payments after December 31st of the calendar year following the calendar year in which the expense was incurred. This paragraph shall only apply to in-kind benefits and reimbursements that would result in taxable compensation income to the Executive.
Additionally, in the event that following the date hereof the Company or the Executive reasonably determines that any compensation or benefits payable under this Agreement may be subject to Section 409A of the Code, the Company and the Executive shall work together to adopt such amendments to this Agreement or adopt other policies or procedures (including amendments, policies and procedures with retroactive effect), or take any other commercially reasonable actions necessary or appropriate to (x) exempt the compensation and benefits payable under this Agreement from Section 409A of the Code and/or preserve the intended tax treatment of the compensation and benefits provided with respect to this Agreement or (y) comply with the requirements of Section 409A of the Code and related Department of Treasury guidance.
Company hereby indemnifies, holds harmless and agrees to defend Executive from and against any and all losses, claims, demands, damages, costs, expenses and liabilities including without limitation, reasonable attorneys’ fees and disbursements incurred in connection therewith as set forth in the By-laws of the Company.
The obligations, covenants, rights and remedies of the Parties under Sections 6 through 11, 13 and 18 through 23 shall expressly extend beyond and survive termination of this Agreement and the Term.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties have executed this Agreement on the date and year first above written.
Beasley Broadcast Group, Inc.
By: /s/ Caroline Beasley
Name: Caroline Beasley
Title: Chief Executive Officer
THE EXECUTIVE
/s/ Bruce G. Beasley
Name: Bruce G. Beasley
Exhibit A
General Release and Waiver
For and in consideration of the payments and other benefits due to Bruce G. Beasley (the “Executive”) pursuant to Section 6 of the Executive Employment Agreement, effective as of August 8, 2024 (the “Employment Agreement”), by and between Beasley Broadcast Group, Inc. (the “Company”) and the Executive, and for other good and valuable consideration, the Executive hereby, for the Executive, the Executive’s spouse and child or children (if any), the Executive’s heirs, beneficiaries, devisees, executors, administrators, attorneys, personal representatives, successors and assigns, forever releases and discharges the Company, and any of its divisions, affiliates, subsidiaries, parents, branches, predecessors, successors, assigns, and, with respect to such entities, their officers, directors, trustees, employees, agents, shareholders, administrators, general or limited partners, representatives, attorneys, insurers and fiduciaries, past, present and future (the “Released Parties”) from, and covenants not to sue for, any and all claims of any kind arising out of, or related to, Executive’s employment with the Company, its affiliates and subsidiaries (collectively, with the Company, the “Affiliated Entities”) or the Executive’s separation from employment with the Affiliated Entities, which the Executive now has or may have against the Released Parties, whether known or unknown to the Executive, by reason of facts which have occurred on or prior to the date that the Executive has signed this Release. Such released claims include, without limitation, any and all claims relating to the foregoing under federal, state or local laws pertaining to employment, including, without limitation, Florida Civil Rights Act, Fla. Stat. Sec. 760.01 et. seq., the Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. Section 2000e et.seq., the Fair Labor Standards Act, as amended, 29 U.S.C. Section 201et. seq., the Americans with Disabilities Act, as amended, 42 U.S.C. Section 12101 et. seq. the Reconstruction Era Civil Rights Act, as amended, 42 U.S.C. Section 1981 et. seq., the Rehabilitation Act of 1973, as amended, 29 U.S.C. Section 701 et. seq., the Family and Medical Leave Act of 1992, 29 U.S.C. Section 2601 et.seq., and any and all state or local laws regarding employment discrimination and/or federal, state or local laws of any type or description regarding employment, including but not limited to any claims arising from or derivative of the Executive’s employment with the Affiliated Entities, as well as any and all such claims under state contract or tort law.
The Executive has read this Release carefully, acknowledges that the Executive has been given at least twenty-one (21) days to consider all of its terms (and the parties agree that such time period to review this Release shall not be extended upon any material or immaterial changes to this Release) and has been advised to consult with an attorney and any other advisors of the Executive’s choice prior to executing this Release, and the Executive fully understands that by signing below the Executive is voluntarily giving up any right which the Executive may have to sue or bring any other claims against the Released Parties, including any rights and claims under the Age Discrimination in Employment Act. The Executive understands and acknowledges that the consideration given for this Release is in addition to anything of value to which the Executive was already entitled. The Executive also understands that the Executive has a period of seven (7) days after signing this Release within which to revoke Executive’s agreement, and that neither the Company nor any other person is obligated to make any payments or provide any other benefits to the Executive pursuant to the Employment Agreement until the eighth (8th) day after the Executive’s signing of this Release without the Executive’s signature having been revoked other than any accrued obligations or other benefits payable pursuant to the terms of the Company’s normal payroll practices or employee benefit plans. Finally, the Executive has not been forced or pressured in any manner whatsoever to sign this Release, and the Executive agrees to all of its terms voluntarily. The Executive is advised that nothing in this Release prevents or precludes the Executive from challenging or seeking a determination in good faith of the validity of this waiver under the Age Discrimination in Employment Act, nor does it impose any condition precedent, penalties, or costs for doing so, unless specifically authorized by Federal law.
Notwithstanding anything else herein to the contrary, this Release shall not affect: (i) the Company’s obligations under Section 6 of the Employment Agreement or under any compensation or employee benefit plan, program or arrangement (including, without limitation, obligations to the Executive under any stock option, stock award or agreements or obligations under any pension, deferred compensation or retention plan) provided by the Affiliated Entities where the Executive’s compensation or benefits are intended to continue or the Executive is to be provided with compensation or benefits, in accordance with the express written terms of such plan, program or arrangement, beyond the date of the Executive’s termination; or (ii) rights to indemnification, contribution or liability insurance coverage the Executive may have under the by-laws of the Company or applicable law. Furthermore, this Release does not release claims that cannot be released as a matter of law, and nothing in this Release prohibits the Executive from reporting possible violations of Federal law or regulation to any United States governmental agency or entity in accordance with the provisions of and rules promulgated under Section 21F of the Securities Exchange Act of 1934 or Section 806 of the Sarbanes-Oxley Act of 2002, or any other whistleblower protection provisions of State or Federal law or regulation (including the right to receive an award for information provided to any such government agencies).
Sections 11, 13 and 18 of the Employment Agreement shall also apply to this Release. This Release is final and binding and may not be changed or modified except in a writing signed by both parties. In the event that any provision or any portion of any provision hereof becomes or is declared by a court of competent jurisdiction or arbitrator to be illegal, unenforceable, or void, this Release shall continue in full force and effect without said provision or portion of provision.
Date August 14, 2024 |
BRUCE G. BEASLEY /s/ Bruce G. Beasley |
Date August 14, 2024 |
BEASLEY BROADCAST GROUP, INC. /s/ Caroline Beasley |
Exhibit 10.2
Caroline Beasley
August 14, 2024
RE: Employment Agreement Renewal
Dear Caroline:
Reference is made to that certain Executive Employment Agreement (the “Employment Agreement”), dated as of September 20, 2021, by and between you and Beasley Broadcast Group, Inc. (the “Company”).
The initial term of the Employment Agreement expired on July 1, 2024. Notwithstanding Section 2(b) of the Employment Agreement, this letter serves as mutual agreement between you and the Company that the term of the Employment Agreement be extended for an additional three-year period expiring on July 1, 2027 (such additional three-year term, the “Initial Term” for purposes of the Employment Agreement); provided that, for purposes of Section 4(a) of the Employment Agreement, the Initial Term will be deemed to have expired and you will continue to receive the Annual Base Salary and Base Rate of Pay (as such terms are defined in the Employment Agreement) set forth in the second sentence of such Section 4(a).
Please acknowledge your agreement with the terms of this letter by signing below and returning a signed copy of this letter to the Company within five (5) days of the date of this letter.
Sincerely,
Beasley Broadcast Group, Inc.
By: /s/ Marie Tedesco
Name: Marie Tedesco
Title: Chief Financial Officer and Executive Vice President
AGREED AND ACCEPTED:
/s/ Caroline Beasley
Caroline Beasley
Exhibit 10.3
Brian E. Beasley
August 14, 2024
RE: Employment Agreement Renewal
Dear Brian:
Reference is made to that certain Executive Employment Agreement (the “Employment Agreement”), dated as of September 20, 2021, by and between you and Beasley Broadcast Group, Inc. (the “Company”).
The initial term of the Employment Agreement expired on July 1, 2024. Notwithstanding Section 2(b) of the Employment Agreement, this letter serves as mutual agreement between you and the Company that the term of the Employment Agreement be extended for an additional three-year period expiring on July 1, 2027 (such additional three-year term, the “Initial Term” for purposes of the Employment Agreement); provided that, for purposes of Section 4(a) of the Employment Agreement, the Initial Term will be deemed to have expired and you will continue to receive the Annual Base Salary and Base Rate of Pay (as such terms are defined in the Employment Agreement) set forth in the third sentence of such Section 4(a).
Please acknowledge your agreement with the terms of this letter by signing below and returning a signed copy of this letter to the Company within five (5) days of the date of this letter.
Sincerely,
Beasley Broadcast Group, Inc.
By: /s/ Caroline Beasley
Name: Caroline Beasley
Title: Chief Executive Officer
AGREED AND ACCEPTED:
/s/ Brian E. Beasley
Brian E. Beasley
Exhibit 31.1
Certification of Chief Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Caroline Beasley, certify that:
Dated: August 14, 2024 |
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/s/ Caroline Beasley |
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Title: Chief Executive Officer |
Exhibit 31.2
Certification of Chief Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Marie Tedesco, certify that:
Dated: August 14, 2024 |
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/s/ Marie Tedesco |
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Title: Chief Financial Officer |
Exhibit 32.1
Certification of Chief Executive Officer
Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Beasley Broadcast Group, Inc. (the “Company”) hereby certifies to such officer’s knowledge that:
Dated: August 14, 2024 |
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/s/ Caroline Beasley |
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Caroline Beasley |
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Chief Executive Officer |
The foregoing certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. § 1350, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
Exhibit 32.2
Certification of Chief Financial Officer
Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Beasley Broadcast Group, Inc. (the “Company”) hereby certifies to such officer’s knowledge that:
Dated: August 14, 2024 |
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/s/ Marie Tedesco |
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Marie Tedesco |
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Chief Financial Officer |
The foregoing certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. § 1350, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.