BBGI 8-K
Beasley Broadcast Group Inc (BBGI)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): May 4, 2021
BEASLEY BROADCAST GROUP, INC.
(Exact name of registrant as specified in its charter)
| DELAWARE | 000-29253 | 65-0960915 | ||
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
3033 Riviera Drive, Suite 200, Naples, Florida 34103
(Address of Principal Executive Offices) (Zip Code)
Registrant’s telephone number, including area code: (239) 263-5000
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class |
Trading Symbol |
Name of Each Exchange on which Registered | ||
| Class A Common Stock, par value $0.001 per share |
BBGI | Nasdaq Global Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
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. ☐
| ITEM 2.02 | RESULTS OF OPERATIONS AND FINANCIAL CONDITION |
On May 4, 2021, Beasley Broadcast Group, Inc. issued a press release announcing its financial results for the fiscal quarter ended March 31, 2021. A copy of the press release is furnished as Exhibit 99.1 to this report.
In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
| ITEM 9.01 | FINANCIAL STATEMENTS AND EXHIBITS |
| (d) | Exhibits |
The following exhibit is furnished with this report pursuant to Item 2.02:
| Exhibit Number |
Description | |
| 99.1 | Press Release dated May 4, 2021 issued by Beasley Broadcast Group, Inc. | |
2
SIGNATURE
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 hereunto duly authorized.
| BEASLEY BROADCAST GROUP, INC. | ||||||
| Date: May 4, 2021 | By: | /s/ Marie Tedesco | ||||
| Marie Tedesco | ||||||
| Chief Financial Officer | ||||||
3
Exhibit 99.1
|
Conference Call and Webcast Today, May 4, 2021 at 11:00 a.m. ET 334-323-0501, conference ID 7158599 or www.bbgi.com
Replay information provided below
|
| News Announcement | For Immediate Release | |
| CONTACT: | ||
| B. Caroline Beasley | Joseph Jaffoni, Jennifer Neuman | |
| Chief Executive Officer | JCIR | |
| Beasley Broadcast Group, Inc. | 212/835-8500 or [email protected] | |
| 239/263-5000 or [email protected] | ||
BEASLEY BROADCAST GROUP REPORTS FIRST QUARTER NET REVENUE OF $48.2 MILLION
NAPLES, Florida, May 4, 2021 – Beasley Broadcast Group, Inc. (Nasdaq: BBGI) (“Beasley” or the “Company”), a multi-platform media company, today announced operating results for the three-month period ended March 31, 2021.
Summary of First Quarter Results
| In millions, except per share data |
Three Months Ended March 31, |
|||||||
| 2021 | 2020 | |||||||
| Net revenue |
$ | 48.2 | $ | 57.7 | ||||
| Operating loss |
$ | (2.5 | ) | $ | (7.1 | ) | ||
| Net loss attributable to BBGI stockholders 1 |
$ | (10.6 | ) | $ | (8.8 | ) | ||
| Net loss per diluted share 1 |
$ | (0.36 | ) | $ | (0.32 | ) | ||
| Station operating income (SOI - non-GAAP) |
$ | 5.2 | $ | 6.7 | ||||
| 1 | Operating loss, net loss attributable to BBGI stockholders and net loss per diluted share reflect $1.1 million in other operating expenses in the three months ended March 31, 2021. Net loss attributable to BBGI stockholders and net loss per diluted share reflect a $5.0 million loss on extinguishment of long-term debt in the three months ended March 31, 2021. Operating loss, net loss attributable to BBGI stockholders and net loss per diluted share reflect $6.8 million of non-cash impairment losses in the three months ended March 31, 2020. |
Net revenue during the three months ended March 31, 2021 reflects a year-over-year decrease in commercial advertising revenue and a lack of non-traditional revenue (“NTR”) and event revenue primarily related to the impact of the COVID-19 pandemic, in addition to lower cyclical political advertising revenue, partially offset by a year-over-year increase in digital revenue.
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| Beasley Broadcast Group, 5/4/21 | page 2 |
Beasley reported an operating loss of $2.5 million in the first quarter of 2021 compared to an operating loss of $7.1 million in the first quarter of 2020, which included a $6.8 million non-cash impairment charge in the first quarter of 2020 resulting from the impact of the COVID-19 pandemic. In addition, the first quarter of 2021 had lower corporate and operating expenses, partially offset by higher depreciation and amortization expense, and $1.1 million in other operating expenses.
Beasley reported a net loss attributable to BBGI stockholders of $10.6 million, or $0.36 per diluted share, in the three months ended March 31, 2021, compared to a net loss attributable to BBGI stockholders of $8.8 million, or $0.32 per diluted share, in the three months ended March 31, 2020. The year-over-year increase is primarily due to lower revenue, higher interest expense and the loss on extinguishment of long-term debt resulting from the issuance of secured notes on February 2, 2021 and the use of proceeds to repay existing debt.
SOI decreased $1.5 million in the first quarter of 2021 compared to the first quarter of 2020. The year-over-year decrease is primarily attributable to lower commercial advertising revenue and the lack of NTR and event revenue in the first quarter of 2021 related to the impact of the COVID-19 pandemic, as well as the year-over-year decline in political revenue.
Please refer to the “Calculation of SOI” and “Reconciliation of Net Loss to SOI” tables at the end of this announcement for a discussion regarding SOI calculations.
Commenting on the financial results, Caroline Beasley, Chief Executive Officer, said, “Beasley reported 2021 first quarter financial results consistent with the expectations we outlined when we reported the 2020 fourth quarter, as our strong revenue growth in the first two months of the comparable 2020 period, prior to the onset of the pandemic, created a difficult year-over-year comparison. Though we continued to experience challenges related to the COVID-19 pandemic during the first quarter, I am pleased to report that we began to see a strong recovery. As a result, we expect Beasley to return to top-line revenue growth beginning in the second quarter of 2021.
“During the first quarter, we continued to advance our digital transformation and revenue diversification initiatives across the Company. In this regard, Beasley generated digital revenue growth of approximately 10% on a year-over-year basis, with digital accounting for approximately 12% of total first quarter revenue, compared to 9.3% of total revenue in the prior year period. Consumer demand for digital audio content remains strong and with our ongoing emphasis on digital innovation, Beasley continues attracting new business by successfully targeting the sale of non-radio products to non-radio advertisers. With the continued strong growth of our digital business, Beasley will report digital revenue as a separate segment going forward. We believe this milestone represents an important inflection point in the ongoing evolution of our operating model and clearly highlights the value of our revenue diversification strategies.
“The actions we have taken over the last year to realign our cost structure and improve efficiencies across the organization drove a year-over-year reduction in first quarter operating and corporate expenses of 15.6% and 13.5%, respectively. We believe our ability to extract meaningful expense savings out of the business provided us with the ability to make strategic investments in our commercial sales infrastructure, which will enable us to maintain our market competitiveness so we are best positioned to deliver on our revenue goals as we move deeper into the recovery phase of the pandemic.
| Beasley Broadcast Group, 5/4/21 | page 3 |
“In addition to our expense reduction and revenue diversification initiatives, Beasley also remained committed to enhancing financial flexibility through capital structure improvements. In the first quarter, we completed our offering of $300.0 million in aggregate principal amount of 8.625% senior secured notes due 2026. The net proceeds of the offering were used to repay in full existing indebtedness under the Company’s senior secured credit facilities and other debt, with the remaining proceeds added to our balance sheet for general corporate purposes. In addition, and due to future economic uncertainty, in early February we applied for and were subsequently approved for a $10 million Paycheck Protection Program loan. Together, these transactions improve our liquidity profile, while providing growth capital to support the continued investment in our business.
“In summary, we believe our first quarter financial performance demonstrates that our digital transformation continues to gain momentum and our recent capital structure initiatives have positioned us to further leverage the highest growth areas of our business and capitalize on the many synergies between our broadcast, digital and e-sports divisions, which we believe will drive increased and more diversified cash flows in future periods. Looking ahead, our strategic priorities remain focused on delivering exceptional content and services to our listeners, advertisers, online users and esports fans, while diversifying our revenue, growing our cash flow and maintaining a solid and flexible balance sheet with liquidity at current or higher levels. We believe that this approach, positions Beasley well for near- and long-term success and the enhancement of stockholder value.”
Conference Call and Webcast Information
The Company will host a conference call and webcast today, May 4, 2021, at 11:00 a.m. ET to discuss its financial results and operations. To access the conference call, interested parties may dial 334-323-0501, conference ID 7158599 (domestic and international callers). Participants can also listen to a live webcast of the call at the Company’s website at www.bbgi.com. Please allow 15 minutes to register and download and install any necessary software. Following its completion, a replay of the webcast can be accessed for five days on the Company’s website, www.bbgi.com.
Questions from analysts, institutional investors and debt holders may be e-mailed to [email protected] at any time up until 9:00 a.m. ET on Tuesday, May 4, 2021. Management will answer as many questions as possible during the conference call and webcast (provided the questions are not addressed in their prepared remarks).
About Beasley Broadcast Group
Celebrating its 60th anniversary this year, the Company was founded in 1961 by George G. Beasley, who remains the Company’s Chairman of the Board. The Company owns and operates 62 stations (47 FM and 15 AM) in 15 large- and mid-size markets in the United States. Approximately 20 million consumers listen to the Company’s radio stations weekly over-the-air, online and on smartphones and tablets, and millions regularly engage with the Company’s brands and personalities through digital platforms such as Facebook, Twitter, text, apps and email. The Company recently acquired a majority interest in the Overwatch League’s Houston Outlaws esports team and owns BeasleyXP, a national esports content hub. For more information, please visit www.bbgi.com.
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| Beasley Broadcast Group, 5/4/21 | page 4 |
Definitions
Station Operating Income (SOI) consists of net revenue less station operating expenses. We define station operating expenses as cost of services and selling, general and administrative expenses.
Free Cash Flow (FCF) consists of SOI less corporate expenses, interest expense, current income tax expense and capital expenditures plus stock-based compensation expense, net proceeds from dispositions, amortization of debt issuance costs and interest income.
SOI and FCF are measures widely used in the radio broadcast industry. The Company recognizes that because SOI and FCF are not calculated in accordance with GAAP, they are not necessarily comparable to similarly titled measures employed by other companies. However, management believes that SOI and FCF provide meaningful information to investors because they are important measures of how effectively we operate our business (i.e., operate radio stations) and assist investors in comparing our operating performance with that of other radio companies.
Note Regarding Forward-Looking Statements
Statements in this release that are “forward-looking statements” are based upon current expectations and assumptions, and involve certain risks and uncertainties within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Words or expressions such as “intends,” “believes,” “expects,” “seek,” “we remain optimistic that” or variations of such words and similar expressions are intended to identify such forward-looking statements. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Key risks are described in the Company’s reports filed with the Securities and Exchange Commission (“SEC”) including its annual report on Form 10-K and quarterly reports on Form 10-Q. Readers should note that forward-looking statements are subject to change and to inherent risks and uncertainties and may be impacted by several factors, including:
| • | the effects of the COVID-19 pandemic, including its potential effects on the economic environment and our results of operations, liquidity and financial condition, and the increased risk of impairments of our Federal Communications Commission (“FCC”) licenses and/or goodwill, as well as any changes to federal, state or local government laws, regulations or orders in connection with the pandemic; |
| • | external economic forces that could have a material adverse impact on our advertising revenues and results of operations; |
| • | the ability of our radio stations to compete effectively in their respective markets for advertising revenues; |
| • | our ability to develop compelling and differentiated digital content, products and services; |
| • | audience acceptance of our content, particularly our radio programs; |
| • | our ability to respond to changes in technology, standards and services that affect the radio industry; |
| • | our dependence on federally issued licenses subject to extensive federal regulation; |
| • | actions by the FCC or new legislation affecting the radio industry; |
| • | our dependence on selected market clusters of radio stations for a material portion of our net revenue; |
| • | credit risk on our accounts receivable; |
| • | the risk that our FCC licenses and/or goodwill could become impaired; |
| • | our substantial debt levels and the potential effect of restrictive debt covenants on our operational flexibility and ability to pay dividends; |
| • | the potential effects of hurricanes on our corporate offices and radio stations; |
| • | the failure or destruction of the internet, satellite systems and transmitter facilities that we depend upon to distribute our programming; |
| • | disruptions or security breaches of our information technology infrastructure; |
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| Beasley Broadcast Group, 5/4/21 | page 5 |
| • | the loss of key personnel; |
| • | our ability to integrate acquired businesses and achieve fully the strategic and financial objectives related thereto and their impact on our financial condition and results of operations; |
| • | the fact that we are controlled by the Beasley family, which creates difficulties for any attempt to gain control of the Company; and |
| • | other economic, business, competitive, and regulatory factors affecting the businesses of the Company, including those set forth in the Company’s filings with the SEC. |
Our actual performance and results could differ materially because of these factors and other factors discussed in our SEC filings, including but not limited to our annual reports on Form 10-K or quarterly reports on Form 10-Q, copies of which can be obtained from the SEC, www.sec.gov, or our website, www.bbgi.com. All information in this release is as of May 4, 2021, and we undertake no obligation to update the information contained herein to actual results or changes to our expectations.
-tables follow-
| Beasley Broadcast Group, 5/4/21 | page 6 |
BEASLEY BROADCAST GROUP, INC.
Consolidated Statements of Operations (Unaudited)
| Three months ended March 31, |
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| 2021 | 2020 | |||||||
| Net revenue |
$ | 48,212,040 | $ | 57,650,426 | ||||
|
|
|
|
|
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| Operating expenses: |
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| Operating expenses (including stock-based compensation and excluding depreciation and amortization shown separately below) |
42,967,871 | 50,900,477 | ||||||
| Corporate expenses (including stock-based compensation) |
3,905,289 | 4,513,092 | ||||||
| Other operating expenses |
1,100,000 | — | ||||||
| Depreciation and amortization |
2,951,901 | 2,576,475 | ||||||
| Impairment losses |
— | 6,804,412 | ||||||
| Gain on dispositions |
(191,988 | ) | — | |||||
|
|
|
|
|
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| Total operating expenses |
50,733,073 | 64,794,456 | ||||||
| Operating loss |
(2,521,033 | ) | (7,144,030 | ) | ||||
| Non-operating income (expense): |
||||||||
| Interest expense |
(5,778,071 | ) | (4,184,811 | ) | ||||
| Loss on extinguishment of long term debt |
(4,996,731 | ) | — | |||||
| Other income (expense), net |
38,413 | 26,425 | ||||||
|
|
|
|
|
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| Loss before income taxes |
(13,257,422 | ) | (11,302,416 | ) | ||||
| Income tax benefit |
(2,602,886 | ) | (2,417,780 | ) | ||||
|
|
|
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|
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| Loss before equity in earnings of unconsolidated affiliates |
(10,654,536 | ) | (8,884,636 | ) | ||||
| Equity in earnings of unconsolidated affiliates, net of tax |
(30,105 | ) | (61,527 | ) | ||||
|
|
|
|
|
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| Net loss |
(10,684,641 | ) | (8,946,163 | ) | ||||
| Earnings attributable to noncontrolling interest |
129,249 | 109,602 | ||||||
|
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|
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| Net loss attributable to BBGI stockholders |
$ | (10,555,392 | ) | $ | (8,836,561 | ) | ||
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| Basic and diluted net loss per share |
$ | (0.36 | ) | $ | (0.32 | ) | ||
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| Basic common shares outstanding |
29,302,799 | 27,947,577 | ||||||
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| Diluted common shares outstanding |
29,302,799 | 27,947,577 | ||||||
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Selected Balance Sheet Data - Unaudited
(in thousands)
| March 31, 2021 |
December 31, 2020 |
|||||||
| Cash and cash equivalents |
$ | 56,211 | $ | 20,759 | ||||
| Working capital |
64,216 | 37,065 | ||||||
| Total assets |
762,099 | 738,614 | ||||||
| Long term debt, net of unamortized debt issuance costs |
302,649 | 258,345 | ||||||
| Stockholders’ equity |
$ | 252,740 | $ | 267,727 | ||||
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| Beasley Broadcast Group, 5/4/21 | page 7 |
Selected Statement of Cash Flows Data – Unaudited
| Three months ended March 31, |
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| 2021 | 2020 | |||||||
| Net cash provided by operating activities |
$ | 2,354,007 | $ | 1,953,723 | ||||
| Net cash used in investing activities |
(666,768 | ) | (4,193,430 | ) | ||||
| Net cash provided by financing activities |
33,763,934 | 2,070,737 | ||||||
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| Net increase (decrease) in cash and cash equivalents |
$ | 35,451,173 | $ | (168,970 | ) | |||
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Calculation of SOI – Unaudited
| Three months ended March 31, |
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| 2021 | 2020 | |||||||
| Net revenue |
$ | 48,212,040 | $ | 57,650,426 | ||||
| Operating expenses |
(42,967,871 | ) | (50,900,477 | ) | ||||
|
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|
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| SOI |
$ | 5,244,169 | $ | 6,749,949 | ||||
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Reconciliation of Net Loss Attributable to BBGI Stockholders to SOI
| Three months ended March 31, |
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| 2021 | 2020 | |||||||
| Net loss attributable to BBGI stockholders |
(10,555,392 | ) | $ | (8,836,561 | ) | |||
| Corporate expenses |
3,905,289 | 4,513,092 | ||||||
| Other operating expenses |
1,100,000 | — | ||||||
| Depreciation and amortization |
2,951,901 | 2,576,475 | ||||||
| Impairment losses |
— | 6,804,412 | ||||||
| Gain on dispositions |
(191,988 | ) | — | |||||
| Interest expense |
5,778,071 | 4,184,811 | ||||||
| Loss on extinguishment of long-term debt |
4,996,731 | — | ||||||
| Other income (expense), net |
(38,413 | ) | (26,425 | ) | ||||
| Income tax benefit |
(2,602,886 | ) | (2,417,780 | ) | ||||
| Equity in earnings of unconsolidated affiliates, net of tax |
30,105 | 61,527 | ||||||
| Earnings attributable to noncontrolling interest |
(129,249 | ) | (109,602 | ) | ||||
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| SOI |
$ | 5,244,169 | $ | 6,749,949 | ||||
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Reconciliation of Net Revenue to FCF
| Three months ended March 31, |
||||||||
| 2021 | 2020 | |||||||
| Net revenue |
$ | 48,212,040 | $ | 57,650,426 | ||||
| Operating expenses |
(42,967,871 | ) | (50,900,477 | ) | ||||
| Corporate expenses |
(3,905,289 | ) | (4,513,092 | ) | ||||
| Net proceeds from dispositions |
362,500 | — | ||||||
| Stock-based compensation expense |
520,801 | 266,439 | ||||||
| Interest expense |
(5,778,071 | ) | (4,184,811 | ) | ||||
| Amortization of debt issuance costs |
411,363 | 483,983 | ||||||
| Interest income |
2,589 | 15,947 | ||||||
| Current income tax expense |
— | — | ||||||
| Capital expenditures |
(1,029,268 | ) | (3,443,430 | ) | ||||
|
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| FCF |
$ | (4,171,206 | ) | $ | (4,625,015 | ) | ||
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