NAPLES, Fla., Aug. 04, 2020 (GLOBE NEWSWIRE) -- Beasley Broadcast Group, Inc. (Nasdaq: BBGI), a multi-platform media company, today announced operating results for the three- and six?month periods ended June 30, 2020.
Net revenue during the three months ended June 30, 2020 reflects a year-over-year decrease in commercial advertising, digital advertising and other revenue due to the impact of the COVID-19 pandemic, partially offset by growth in esports revenue and contributions from the August 2019 acquisition of WDMK-FM.
Beasley reported an operating loss of $17.6 million in the second quarter of 2020 compared to operating income of $10.7 million in the second quarter of 2019, largely reflecting the year-over-year decrease in Station Operating Income (SOI, a non-GAAP financial measure), in addition to higher depreciation and amortization, partially offset by lower corporate expenses.
Second quarter 2020 interest expense decreased 15.3% to $3.9 million compared to interest expense of $4.5 million in the prior year period, due to lower interest rates, which offset the increase in long-term debt outstanding.
Beasley reported a net loss of $18.2 million, or $0.63 per diluted share, in the three months ended June 30, 2020, compared to net income of $4.3 million, or $0.15 per diluted share, in the three months ended June 30, 2019. The year-over-year decrease was primarily due to the aforementioned year-over-year decline in net revenue related to the COVID-19 pandemic as well as a $2.8 million loss on the modification of Beasley’s long-term debt, resulting from an amendment to the credit agreement on June 30, 2020.
SOI decreased $28.9 million in the second quarter of 2020 compared to the second quarter of 2019. The year-over-year decrease is primarily attributable to the adverse impact of the COVID-19 pandemic on commercial and digital advertising revenues.
Please refer to the “Calculation of SOI” and “Reconciliation of Net Income (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, “While Beasley had a strong start to the year, a sharp decline in commercial advertising occurred in the second quarter with the onset of the COVID-19 pandemic. Beasley’s financial results for the three-month period ended June 30, 2020 reflect the economic pressures we experienced across our business as local and national advertisers adapted their media plans to meet the unique challenges of the pandemic. While we saw sequential month-over-month improvement in our commercial advertising revenue performance from April to May, and from May to June, our total net revenues for the second quarter decreased nearly 54%, which is in line with reported overall industry levels.
“To address the reduction in traditional advertising revenue that has occurred as a result of the pandemic, during the second quarter, we quickly implemented several changes across the Company, including reducing operating expenses and corporate overhead and realigning our Company-wide cost structure to preserve cash. As a result, Beasley’s second quarter total operating expenses declined by 12.7%, and year-to-date, we have taken approximately $26 million out of our cost structure. In addition to these actions, as part of our response, we have taken proactive steps to accelerate our digital transformation initiatives and revenue diversification strategies, and to become a leaner and more efficient organization, with the goal of growing our market leadership position across our stations, our digital operations, and our esports interests. We believe these steps will allow us to emerge from the pandemic as a stronger Company. In addition, during the second quarter, Beasley entered into an agreement to amend the financial covenants and other provisions under our credit agreement to support our liquidity and capital structure as we manage the business through the pandemic.
“Beasley continues to generate positive results from its digital and esports investments, which have been less impacted by the COVID-19 pandemic, with digital accounting for approximately 14% of total second quarter revenue, compared to 7.4% of total revenue in the prior year period. On the esports front, in addition to regular season play, in May the Houston Outlaws participated in the ‘Lone Star Showdown,’ an exclusive skills and team competition series versus the Dallas Fuel. This first-of-its-kind event was a tremendous success, and we remain focused on looking for new, innovative ways to monetize our esports content. Overall, we continue to be encouraged by the momentum and long-term growth trajectory of our digital and esports businesses.
“In closing, I am very proud of the work that our teams have done, and continue to do, to deliver high-quality, premium local content and critical safety information to our listeners across all traditional and digital media platforms during this challenging time for our country. Looking ahead, we are guardedly optimistic and remain focused on our strategic priorities of realizing synergy targets, reducing leverage, taking advantage of political and digital revenue opportunities, and benefiting from our esports investments and operations. While we expect that the pandemic will continue to impact our operations in the third quarter, we intend to continue to actively manage our business to best position the Company for the future, with the goal of delivering exceptional content and services to our listeners, advertisers, online users and esports fans, while creating new value for our shareholders.”
About Beasley Broadcast Group
Celebrating its 59th anniversary this year, Beasley Broadcast Group, Inc., (www.bbgi.com) was founded in 1961 by George G. Beasley who remains the Company’s Chairman of the Board. Beasley Broadcast Group owns and operates 64 stations (47 FM and 17 AM) in 15 large- and mid-size markets in the United States. Approximately 19 million consumers listen to Beasley 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. Beasley 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.
