Flat Revenue Can’t Save Beasley From Big Q1 Loss


With Friday’s Closing Bell on Wall Street, Beasley Media Group released its Q1 2020 financial results. What Beasley experienced is hardly a surprise: a significant net loss was seen due to COVID-19 related fiscal challenges.

Yet, revenue was flat year-over-year.

For the three months ending March 31, Beasley saw net revenue come in at $57.65 million — just a hair below the $57.69 million seen in Q1 2019.

However, Beasley swung to a net loss of $8.8 million (-$0.32 per diluted share), from net income of $1.4 million ($0.05) in Q1 2019.

Station Operating Income, a popular non-GAAP measure with radio broadcasting companies, dipped to $6.7 million from $10.2 million.

Then, there’s the Free Cash Flow. It tumbled to -$4.63 million, from -$214,287 in Q1 2019.

While the results are largely negative, that net revenue result is a large positive: strong political advertising revenue, an increase in digital advertising and esports revenue, and contributions from the August 2019 acquisition of WDMK-FM in Detroit all played a role.

Yet, commercial advertising revenue and other revenue related to the impact of the COVID-19 pandemic decreased significantly.

As such, Beasley is taking a $6.8 million non-cash impairment charge resulting from the impact of the COVID-19 pandemic.

“Our top-line growth was not able to fully offset the acute challenges brought on by the COVID-19 pandemic during the three-month period, resulting in a year-over-year decline in first quarter SOI and Free Cash Flow,” Beasley CEO Caroline Beasley explained.

However, there’s some positive visibility for Beasley’s investors.

“While mandated stay at home orders severely impacted advertising revenue in March, April, and May, we have seen recent increases in advertising activity in markets that have re-opened, with May advertising revenues ahead of April, and bookings for June, as of today, already exceeding May’s results,” Caroline Beasley said.

That will help eat away at the $267 million of total outstanding debt Beasley has. It grew in Q1 as the company drew $7.5 million against its revolver and used cash from operations to make scheduled debt repayments of approximately $3 million.

Shoring up dollars also saw Beasley’s Board of Directors suspended future quarterly dividends “until the significant uncertainty of the current situation has passed and it is determined that resumption of dividend payments is in the best interest of the company’s shareholders.”

Caroline Beasley continued, “We believe our strong local radio and digital platform and competitive positions in our markets, combined with the experience of our team and the actions we are taking to reduce costs and support our balance sheet and liquidity position, will be key factors in our ability to recover from this crisis.”

That said, Beasley this week extended its wage cuts and furloughs implemented in April, when 67 full-time positions were eliminated altogether. “No one could have ever anticipated that several of our markets would not begin the first phase of the reopening process until June,” Caroline Beasley said in a company-wide memo distributed this week. “As a result, we must continue to adapt to the new financial environment we are facing within each of our individual markets.”

Some employees may return sooner, based upon the needs of the company on a market to market basis. Caroline Beasley will personally continue to forego 20% of her compensation until the end of the year. Performance based bonuses for Q3 and Q4 will be reduced, and the 10% wage cuts will be extended for salaried full-time employees as well as the 10% reduction in hours for full-time hourly employees.

Everything Beasley had to say was via prepared comments tied to the release of the Q1 numbers. The company will not be hosting a conference in connection with the release of its first quarter earnings.

BBGI finished Friday’s trading at $2.18, off 7 cents.