Beasley Broadcast Group, Inc.

Good morning and welcome to Beasley Broadcast Group first quarter 2024 earnings call. Before proceeding, I would like to emphasize that today's conference call and webcast will contain forward-looking statements about our future performance and results of operations that involve risks and uncertainties described in the risk factor section of our most recent annual report on Form 10-K, as supplemented by our quarterly reports on Form 10-Q. Today's webcast will also contain a discussion of certain non-GAAP financial measures within the meaning of item 10 on Regulation SK. A reconciliation of these non-GAAP measures with their most directly comparable financial measures calculated and presented in accordance with GAAP can be found in this morning's news announcement and on the company's website. I would also like to remind listeners that following its completion, a replay of today's call can be accessed for five days on the company's website, www.bbgi.com. You can also find a copy of today's press release on the investors or press room sections of the site. At this time, I would like to turn the conference over to your host, Beasley Broadcast Group CEO, Caroline Beasley. Please go ahead.

Thank you, Melissa, and good morning, everyone. Thank you for joining us to review our first quarter results. Marie Tedesco, our CFO, is with me this morning. Industry-wide ad softness led to a first quarter revenue decrease of 5.9%, which is slightly below the pacing we previewed at the time Q4 was reported. Perhaps more importantly, on a same station basis, meaning excluding revenue from WJVR, the outlaws in the March 23 home show in the year-ago period, first quarter revenue declined 3.1%, or $1.7 million. During the quarter, we generated $548,000 of net political revenue, and that compares to $19,000 in Q1-23. This exceeds our first quarter budget for political, and we continue to look forward to robust 24 political spend, as several of our markets are located in swing states. Operating expenses declined 2.8% or $1.4 million, reflecting the divestiture of WJBR and our eSports team. Same station expenses declined $23,000, which includes a headcount reduction from last year, offset by increased third-party digital COGS related to the increase in digital TPP revenue. As a result, our first quarter adjusted EBITDA with $731,000 compared to $2.6 million last year. Breaking down our first quarter revenue performance, over-the-air local spot was down 12.8% or $4.4 million, and same station, local was down 12% or $4.1 million. This was driven by a decline in agency business as local's IRAC was flat. We remain highly focused on developing new local direct business and our efforts paid off as our new business increased 53% or 2.9 million to 8.4 million for the first quarter. Local direct accounts for 57% of our total local business as we continue to shift from agency to direct. Now showing signs of stabilizing during the quarter national increased 100,000 or 1.1% year-over-year, and it declined just 4.9%, excluding political. Our digital bills continued as we delivered year-over-year 20% digital revenue growth in the quarter, and this is on a same-station basis. Digital revenue accounted for 20.1% of first quarter total revenue, again, out-billing national revenue. which was at 12.7% of total, and this is ex-political, as we've been successful in offsetting the national declines with growing digital revenue. We expect digital to account for between 20 and 25% of total revenue in 2024, driven by our content creation and the continued success and growth of digital services. Now, quickly touching on the sports betting category. we recorded $4.9 million in Q1, marking a 17% year-over-year increase, with sports betting revenue now accounting for 9% of total revenue in the quarter. And this was driven by both our Boston and our Charlotte cluster, following the recent approval of sports betting in North Carolina. So now I'm going to turn it over to Marie, and she's going to provide you a deeper dive into the quarter.

Marie? Thanks, Caroline, and good morning, everyone. As Caroline mentioned, first quarter net revenues decreased 5.9%, or $3.4 million, to $54.4 million. Augusta, Charlotte, Fayetteville, and our in-house agency, Digital Direct, recorded positive revenue growth year over year. The main driver of the revenue decline was related to the divested Wilmington station, one less Tampa home show, in the quarter and a decline in local agencies' stock business, which was somewhat upset by continued growth in digital revenue, up 10% year-over-year and 20% on the same station basis. Looking closer at the quarter, January increased 1.7%, February declined 2.1%, and March dropped 9.5%. However, on a same-station basis, excluding the divested Wilmington Station, Eastport, and the non-return of the March home show, January was up 3.4%, February down 0.4%, and March declined 6.1% year-over-year, and same-station revenue for the quarter declined 3.1%. Operating expenses for the quarter decreased 2.8% year-over-year, or by $1.4 million, and SOI declined $2 million to $5.1 million compared to first quarter 2023, primarily due to the divested Wilmington Station and esports team. Same station expenses dropped $23,000 driven by our previous 2023 headcount reduction and overall expense management, which was somewhat offset by increased cost of sales from third party expenses related to the shift in digital revenue. Same station SOI declined $1.7 million for the quarter to $5.4 million. Now looking at our revenue categories for the quarter, consumer services remained our largest revenue category at 31.9% of total revenue, with an increase of 5.3% year-over-year, including increased spend in legal and home improvements. Our second largest category was entertainment, which was up 1.8% in the quarter, accounting for 17% of total revenue. The largest entertainment spend increase came from Charlotte, where we are benefiting from a surge of sports betting ad revenue. We also had increases year over year in Boston, Detroit, Tampa, Fort Myers, Fayetteville, and Augusta. We continue to see declines in the Philadelphia market due to some sports betting dollars moving to new markets such as Charlotte. Retail landed in third place, representing 14.3% of the quarter, falling 8.4% year over year, mostly from Tampa and Detroit. The auto category saw revenues down 10.6% or $560,000 year-over-year, and the category accounted for 8.8% of our total first quarter revenue. However, three of our markets exceeded prior year in revenue growth, including Tampa, Charlotte, and Las Vegas. And on a positive note, we grew our share of auto dollars in Philadelphia, Charlotte, Detroit, and Las Vegas as the market spend decreased year-over-year. Consumer products came in fifth place at 6% of total first quarter revenue, up 20.7%, and telecoms landed in sixth place with 4.2% of total revenue. Corporate G&A expenses for the quarter decreased 1.7% or 75,000 compared to the same quarter a year ago to 4.4 million. The year-over-year decrease in corporate G&A is mostly related to a reduction in wages and legal fees. Non-cash stock-based compensation increased $21,000 to $131,000 in the quarter and we paid $84,000 in income taxes for the quarter. First quarter 2024 operating income decreased $1.4 million to a negative $1.1 million compared to $413,000 in the year-ago quarter, reflecting the year-over-year decline in revenue. Interest expense in first quarter decreased $1 million year-over-year to $5.6 million, reflecting debt reduction throughout 2023. We ended the quarter with a total debt of $267 million, and we made our semiannual interest payments on February 1, 2024. Adjusted EBITDA for fourth quarter was $731,000 compared to prior year adjusted EBITDA of $2.6 million. I will note that the cyclical pattern shows first quarter consistently being the lowest in profitability throughout the year. We ended the quarter with cash on hand of $27.8 million, up from $26.7 million at year end 2023. Our capital expenses for the quarter were $948,000 compared to prior year first quarter of $1.2 million. And looking into 2024, we expect our annual cap expense in the range of 4 to 5 million. And with that, I will turn it back to Caroline.