Beasley Broadcast Group, Inc.

Good morning and welcome to Beasley Broadcast Group first quarter 2025 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 factors section of our most recent annual report on Form 10-K as supplemented by our quarterly report on Form 10-Q. Today's webcast will also contain a discussion of certain non-GAAP financial measures within the meaning of item 10 of 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 remind listeners that following its completion, The 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, Alana, and good morning, everyone. We appreciate you joining us to review our first quarter results. Following a transformative 2024, we entered this year with a clear set of priorities. Number one, accelerate digital growth. Number two, improve revenue quality. And number three, execute with discipline. In Q4, we remain focused on those priorities. scaling high margin digital products, deepening our advertiser relationships, and continuing to invest in areas that drive long-term value. In Q1, total net revenue was $48.9 million, while total operating expenses were $45.2 million. While top-line softness was felt industry-wide, Our ability to preserve EBITDA profitability through efficient cost management highlights the foundational improvements we've made and the ongoing impact of our margin-focused operating strategy. We were especially encouraged by the progress in our digital segment. Digital revenue accounted for 22% of total revenue, and digital segment operating income grew meaningfully. from 100,000 in Q124 to 1.9 million in Q125. This performance highlights the impact of our digital product margin optimization and the growing demand for digital first solutions. We believe this momentum validates our long-term strategy and positions us to drive further gains in market share, operating efficiency, and margin expansion across the digital portfolio. At the same time, we took proactive steps to manage through broader economic headlines. We continued executing our cost reduction plan, realigning resources across the company, and improving internal workflows to maximize efficiency and support growth in high return categories, including sports, which is a high return category, that has developed to be core to our broader strategy. We see meaningful opportunity to grow this vertical both on air and digitally. We currently maintain flagship relationships with five major professional teams in Boston and Philadelphia, in addition to relationships with several major universities across the nation. In April, We expanded this footprint with a landmark multi-year partnership in Detroit through a new flagship agreement with University of Michigan Athletics and Learfield's Michigan Sports Properties. Starting this fall, we'll bring Michigan football, men's basketball, and men's hockey to the FM dial on 94.7 WCSX with select women's basketball games airing on 105.1 The Bounce. This partnership is more than just game coverage. It includes weekly coaches shows, player interviews, and digital exclusives, fully integrated across our own air, online, and own site platforms. It represents the next chapter in our omnichannel sports strategy, bringing advertisers and fans into a seven-day-a-week engagement model. As we continue investing, and high-impact content, proprietary digital products, and platform-spanning opportunities like sports, we remain equally committed to disciplined execution and long-term financial performance. With that, I'll turn it over to Lauren for a closer look at our first quarter results.

Thanks, Caroline, and good morning, everyone. As mentioned, total net revenue for the first quarter was $48.9 million. down 10.1% on an as reported basis, but down 8.5% on a same station basis. As a reminder, we report our pacing data on a same station basis. With that in mind, this result modestly exceeded the trend of a 10% year over year decline we reported in our Q4 earnings call, reflecting early progress in stabilizing revenue trends amid continued market volatility. As we received a number of investor questions following our Q4 earnings release on our same-station performance, we have added those reconciliation tables back to our release and will continue to provide details of reported versus same-station performance. The first quarter reflected the ongoing challenges of a cautious advertising environment with softness across most major categories. Overall demand remained under pressure, and year-over-year declines were consistent with broader industry trends. With that context, I'll walk through performance by category, beginning with consumer services. Consumer services remained our largest revenue category in Q1, accounting for 30% of total revenue. While dollars from the category declined 15% year-over-year, there were bright spots within consumer services, including legal and HVAC in particular. Legal has continued to build momentum, growing nearly 5% year over year. A key driver of this success has been the expanded deployment of QVisual billboards and sponsorships, which deliver synchronized in-car messaging during on-air commercials. When an advertiser's spot aired, a matching visual appears on the car's dashboard as a full visual ad on HD radio or as a dynamic text messaging on standard radio displays. This real-time ad synchronization dramatically enhances brand visibility and drives deeper audience engagement. Law firms in particular have been highly responsive to this format, recognizing the power of having their brand front and center at precisely the moment of message delivery. As a result, Q has helped us secure incremental spend from existing accounts while accelerating new business wins. Reinforcing legal is one of our most stable and scalable verticals. We also saw meaningful growth in HVAC, growing 12% year-over-year. Our focus on targeted outreach and digital integration resulted in several new advertiser wins. This category is becoming an increasingly dependable contributor and we believe we have additional upside as we expand our footprint and refine campaign offerings for the remainder of the year. Shifting to automotive, overall category revenue declined slightly in Q1, with domestic softness outweighing strength in foreign auto. Foreign auto was up 7.5% for the quarter, down from the plus 15% year-over-year growth we saw in Q4, primarily due to advertiser caution tied to potential tariffs on imported vehicles. This uncertainty emerged late in the quarter and weighed on both campaign planning and co-op spending. Domestic auto declined 5% despite early strength in January placements as broader market concerns and shifting inventory dynamics impacted budgets across several key accounts. While the category was down overall, we did see bright spots in markets like Boston and Tampa, where our team secured Tier 2 program commitments and developed new local partnerships. That said, given the macro environment and auto sector volatility, we expect these headwinds to continue into Q2, particularly on the national side. Altogether, national revenue, excluding political, declined 12.7%. driven in part by a broad pullback across all verticals, as well as continued softness in categories such as home improvement and healthcare. These results reflected heightened macroeconomic caution and ongoing pressure across agency channels. Local agency revenue declined 19.9% year over year, with all markets experiencing some level of contraction. That said, several of our markets limited local agency losses to the single digits, underscoring the strength of local relationships and effective sales execution. In contrast, local direct revenue increased by 0.3% year-over-year and now represents 55% of our total local business, a testament to the resilience of our direct advertiser base and the continued performance of our in-market sales team. This year-over-year growth, even in a challenging economic environment, reflects the enduring value of our local sales strategy and the strength of our client relationships. As with others in our industry, the majority of our overall revenue decline was concentrated in agency-driven business amplified by broader macroeconomic headwinds. Looking ahead, we are taking deliberate steps to deepen collaboration with our local agency partners, focus on streamlining the buying process, and offering multi-platform solutions that align with our clients' evolving needs. New business declined 19.5% in the quarter, largely due to agency churn and tough comparisons to Q1 2024, which included several one-time high-value campaigns in healthcare and sports betting, but now fall into a recurring base. Despite this, we saw positive year-over-year new business comps in some of our largest markets, including Boston, Tampa, Charlotte, and Philadelphia. Mid-macroeconomic challenges, we remained focused on value creation, with our sales team focused on building sustainable advertiser relationships and strengthening conversion across priority verticals. Now, turning to expenses. Total operating expenses for the quarter were $45.2 million, down nearly 4 million or 8.1% compared to the prior year. On a same station basis, operating expenses were down 2.6 million or 5.4% compared to the prior year. Audio operating expenses declined 5.3% or 5% on the same station basis, while digital operating expenses saw an 18.2% reduction or 6.8% reduction on the same station basis due to the divestiture of guaranteed digital and the outlaws. As a result, station operating income for the quarter was 3.7 million, compared to 5.1 million in Q1 2024. On an adjusted basis, excluding non-recurring and severance expenses and stock-based compensation, adjusted SOI was 4.6 million. The decline in SOI reflects the impact of lower revenues that outpaced our cost reductions despite strong underlying expense discipline. Corporate G&A expenses decreased 8.8% or $388,000 compared to the same quarter a year ago to $4 million. Excluding non-recurring severance costs and stock-based compensation, adjusted corporate G&A expenses declined approximately 20%. or $575,000 to $3.4 million. These results reflect our broader commitment to financial rigor and a sustained focus on aligning our expense base with current revenue trends. Operating income for the first quarter of 2025 was a loss of $2 million compared to a loss of $1.1 million in the prior year period The reported decline was primarily the result of a 5.5 million year-over-year reduction in net revenue, which outpaced the 4.6 million decrease in total operating expenses, corporate expenses, and depreciation and amortization. However, when excluding one-time charges, including severance, one-time costs related to our financial systems implementation and go-live, and expenses associated with our debt transaction, our adjusted operating loss was 0.6 million. On this basis, underlying operating performance improved by approximately 500,000 compared to the same period last year. This improvement underscores the continued impact of our cost containment efforts and highlights the operational progress we've made despite a softer revenue environment. Interest expense declined 2.2 million year over year from 5.6 million to 3.4 million. reflecting the benefit of debt reduction activities in Q4 2024. We ended Q1 2025 with total principal outstanding of $220 million. Adjusted EBITDA for the first quarter of 2025 was $1.1 million, up 28% from $0.9 million in the prior year period, despite a challenging revenue environment. This performance reflects the benefits of our strategic cost initiatives and disciplined operational execution. Adjusted EBITDA includes $0.1 million in non-cash stock-based compensation, $495,000 in non-recurring advisory expenses associated with our financial systems go live and the debt transaction, and $890,000 in one-time severance expenses. Excluding non-cash trade adjustments, property and franchise taxes, and pro forma cost savings, totaling $0.5 million altogether, EBITDA, as defined by our indenture, was even stronger at $1.7 million. Following our Q4 earnings call, we had a number of conversations with our lenders, and we have refocused our earnings release around adjusted EBITDA, as that continues to be the metric they are most interested in. While revenue declined by $5.5 million year-over-year due to broader market sockets, we believe our improved profitability profile positions us to capitalize on future top line recovery. Our proactive cost discipline, combined with investments in core growth areas, provides a strong foundation for margin expansion and sustainable long-term value creation. We ended the quarter with $12.2 million in cash on hand, down from $13.8 million at the end of fiscal year 2024. Capital expenditures were $800,000 in the quarter, compared to $900,000 in the prior year. And with that, let me turn it back to Caroline.