QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State of Incorporation) |
(I.R.S. Employer Identification Number) |
Title of Each Class |
Trading Symbol |
Name of Each Exchange on which Registered | ||
Large accelerated filer |
☐ |
Accelerated filer |
☐ | |||
☐ | Smaller reporting company | |||||
Emerging growth company |
December 31, 2021 |
March 31, 2022 |
|||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | $ | ||||||
Accounts receivable, less allowance for doubtful accounts of $ |
||||||||
Prepaid expenses |
||||||||
Other current assets |
||||||||
Total current assets |
||||||||
Property and equipment, net |
||||||||
Operating lease right-of-use |
||||||||
Finance lease right-of-use |
||||||||
FCC licenses |
||||||||
Goodwill |
||||||||
Other intangibles, net |
||||||||
Other assets |
||||||||
Total assets |
$ | $ | ||||||
LIABILITIES AND EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | $ | ||||||
Operating lease liabilities |
||||||||
Finance lease liabilities |
||||||||
Other current liabilities |
||||||||
Total current liabilities |
||||||||
Due to related parties |
||||||||
Long-term debt, net of unamortized debt issuance costs |
||||||||
Operating lease liabilities |
||||||||
Deferred tax liabilities |
||||||||
Other long-term liabilities |
||||||||
Total liabilities |
||||||||
Commitments and contingencies |
||||||||
Stockholders’ equity: |
||||||||
Preferred stock, $ |
||||||||
Class A common stock, $ |
||||||||
Class B common stock, $ |
||||||||
Additional paid-in capital |
||||||||
Treasury stock, Class A common stock; |
( |
) | ( |
) | ||||
Retained earnings |
||||||||
Accumulated other comprehensive loss |
( |
) | ( |
) | ||||
Total stockholders’ equity |
||||||||
Total liabilities and stockholders’ equity |
$ | $ | ||||||
Three Months Ended March 31, |
||||||||
2021 |
2022 |
|||||||
Net revenue |
$ | $ | ||||||
|
|
|
|
|||||
Operating expenses: |
||||||||
Operating expenses (including stock-based compensation of $ |
||||||||
Corporate expenses (including stock-based compensation of $ |
||||||||
Depreciation and amortization |
||||||||
Impairment loss |
||||||||
Gain on disposition |
( |
) | ||||||
Other operating expense s |
||||||||
|
|
|
|
|||||
Total operating expenses |
||||||||
|
|
|
|
|||||
Operating loss |
( |
) | ( |
) | ||||
Non-operating income (expense): |
||||||||
Interest expense |
( |
) | ( |
) | ||||
Loss on extinguishment of long-term debt |
( |
) | ||||||
Other income, net |
||||||||
|
|
|
|
|||||
Loss before income taxes |
( |
) | ( |
) | ||||
Income tax benefit |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Loss before equity in earnings of unconsolidated affiliates |
( |
) | ( |
) | ||||
Equity in earnings of unconsolidated affiliates, net of tax |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net loss |
( |
) | ( |
) | ||||
Earnings attributable to noncontrolling interest |
||||||||
|
|
|
|
|||||
Net loss attributable to BBGI stockholders |
$ | ( |
) | ( |
) | |||
|
|
|
|
|||||
Net loss attributable to BBGI stockholders per Class A and Class B common share: |
||||||||
Basic and diluted |
$ | ( |
) | $ | ( |
) | ||
Weighted average shares outstanding: |
||||||||
Basic and diluted |
Three Months Ended March 31, |
||||||||
2021 |
2022 |
|||||||
Cash flows from operating activities: |
||||||||
Net loss |
$ | ( |
) | $ | ( |
) | ||
Adjustments to reconcile net loss to net cash provided by operating activities: |
||||||||
Stock-based compensation |
||||||||
Provision for bad debts |
( |
) | ||||||
Depreciation and amortization |
||||||||
Impairment loss |
— | |||||||
Gain on disposition |
( |
) | ||||||
Amortization of loan fees |
||||||||
Loss on extinguishment of long-term debt |
||||||||
Deferred income taxes |
( |
) | ( |
) | ||||
Equity in earnings of unconsolidated affiliates |
||||||||
Change in operating assets and liabilities: |
||||||||
Accounts receivable |
||||||||
Prepaid expenses |
( |
) | ||||||
Other assets |
||||||||
Accounts payable |
( |
) | ||||||
Other liabilities |
( |
) | ||||||
Other operating activities |
( |
) | ||||||
|
|
|
|
|||||
Net cash provided by operating activities |
||||||||
|
|
|
|
|||||
Cash flows from investing activities: |
||||||||
Capital expenditures |
( |
) | ( |
) | ||||
Proceeds from dispositions |
||||||||
|
|
|
|
|||||
Net cash used in investing activities |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Cash flows from financing activities: |
||||||||
Issuance of debt |
||||||||
Payments on debt |
( |
) | ||||||
Payment of debt issuance costs |
( |
) | ||||||
Reduction of finance lease liabilities |
( |
) | ( |
) | ||||
Purchase of treasury stock |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net cash provided by (used in) financing activities |
( |
) | ||||||
|
|
|
|
|||||
Net increase (decrease) in cash and cash equivalents |
( |
) | ||||||
Cash and cash equivalents at beginning of period |
||||||||
|
|
|
|
|||||
Cash and cash equivalents at end of period |
$ | $ | ||||||
|
|
|
|
|||||
Cash paid for interest |
$ | $ | ||||||
|
|
|
|
|||||
Cash paid for income taxes |
$ | $ | ||||||
|
|
|
|
|||||
Supplemental disclosure of non-cash investing and financing activities: |
||||||||
Acquisition of noncontrolling interest |
$ | $ | ||||||
|
|
|
|
|||||
Extinguishment of trade sales payable |
$ | $ | ||||||
|
|
|
|
|||||
Class A common stock returned to treasury stock |
$ | $ | ||||||
|
|
|
|
December 31, 2021 |
March 31, 2022 |
|||||||
Secured notes |
$ | $ | ||||||
Less unamortized debt issuance costs |
( |
) | ( |
) | ||||
$ | $ | |||||||
Three months ended March 3 1 , |
||||||||
2021 |
2022 |
|||||||
Beginning balance |
$ | $ | ||||||
Stock-based compensation |
||||||||
Acquisition of noncontrolling interest |
( |
) | — | |||||
Purchase of treasury stock |
( |
) | ( |
) | ||||
Net loss |
( |
) | ( |
) | ||||
Elimination of noncontrolling interest |
— | |||||||
Ending balance |
$ | $ | ||||||
Three months ended March 31, |
||||||||
2021 |
2022 |
|||||||
Audio |
$ | $ | ||||||
Digital |
||||||||
Other |
||||||||
$ | $ | |||||||
December 31, 2021 |
March 31, 2022 |
|||||||
Deferred revenue |
$ | $ |
Three months ended March 31, |
||||||||
2021 |
2022 |
|||||||
Losses on receivables |
$ | $ |
December 31, 2021 |
March 31, 2022 |
|||||||
Trade sales receivable |
$ | $ | ||||||
Trade sales payable |
Three months ended March 31, |
||||||||
2021 |
2022 |
|||||||
Trade sales revenue |
$ | $ |
Units |
Weighted- Average Grant-Date Fair Value |
|||||||
Unvested as of January 1, 2022 |
$ | |||||||
Granted |
||||||||
Vested |
( |
) | ||||||
Forfeited |
( |
) | ||||||
Unvested as of March 31, 2022 |
$ | |||||||
Three months ended March 31, |
||||||||
2021 |
2022 |
|||||||
Net loss attributable to BBGI stockholders |
$ | ( |
) | $ | ( |
) | ||
Weighted-average shares outstanding: |
||||||||
Basic |
||||||||
Effect of dilutive restricted stock units and restricted stock |
||||||||
Diluted |
||||||||
Net loss attributable to BBGI stockholders per Class A and Class B common share – basic and diluted |
$ | ( |
) | $ | ( |
) | ||
Audio |
Digital |
Other |
Corporate |
Total |
||||||||||||||||
Net revenue |
$ | $ | $ | $ | — | $ | ||||||||||||||
Operating expenses |
— | |||||||||||||||||||
Corporate expenses |
— | — | — | |||||||||||||||||
Depreciation and amortization |
||||||||||||||||||||
Impairment loss |
— | — | — | |||||||||||||||||
Operating income (loss) |
$ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||||||
Audio |
Digital |
Other |
Corporate |
Total |
||||||||||||||||
Capital expenditures |
$ |
$ |
$ |
$ |
$ |
Audio |
Digital |
Other |
Corporate |
Total |
||||||||||||||||
Net revenue |
$ | $ | $ | $ | — | $ | ||||||||||||||
Operating expenses |
— | |||||||||||||||||||
Corporate expenses |
— | — | — | |||||||||||||||||
Depreciation and amortization |
||||||||||||||||||||
Gain on disposition |
( |
) | — | — | — | ( |
) | |||||||||||||
Other operating expense s |
— | — | ||||||||||||||||||
Operating income (loss) |
$ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||||||
Audio |
Digital |
Other |
Corporate |
Total |
||||||||||||||||
Capital expenditures |
$ |
$ |
— |
$ |
$ |
$ |
Audio |
Digital |
Other |
Corporate |
Total |
||||||||||||||||
Property and equipment, net |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
FCC licenses |
— | — | — | |||||||||||||||||
Goodwill |
— | — | ||||||||||||||||||
Other intangibles, net |
— |
Audio |
Digital |
Other |
Corporate |
Total |
||||||||||||||||
Property and equipment, net |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
FCC licenses |
— | — | — | |||||||||||||||||
Goodwill |
— | — | ||||||||||||||||||
Other intangibles, net |
— |
• |
the effects of the COVID-19 pandemic, including its potential effects on the economic environment and the Company’s results of operations, liquidity and financial condition, and the increased risk of impairments of the Company’s Federal Communications Commission (“FCC”) licenses and/or goodwill; |
• |
external economic forces that could have a material adverse impact on the Company’s advertising revenues and results of operations; |
• |
the ability of the Company’s radio stations to compete effectively in their respective markets for advertising revenues; |
• |
the ability of the Company to develop compelling and differentiated digital content, products and services; |
• |
audience acceptance of the Company’s content, particularly its radio programs; |
• |
the ability of the Company to respond to changes in technology, standards and services that affect the radio industry; |
• |
the Company’s dependence on federally issued licenses subject to extensive federal regulation; |
• |
actions by the FCC or new legislation affecting the radio industry; |
• |
increases to royalties the Company pays to copyright owners or the adoption of legislation requiring royalties to be paid to record labels and recording artists; |
• |
the Company’s dependence on selected market clusters of radio stations for a material portion of its net revenue; |
• | credit risk on the Company’s accounts receivable; |
• | the risk that the Company’s FCC licenses and/or goodwill could become impaired; |
• | the Company’s substantial debt levels and the potential effect of restrictive debt covenants on the Company’s operational flexibility and ability to pay dividends; |
• | the potential effects of hurricanes on the Company’s corporate offices and radio stations; |
• | the failure or destruction of the internet, satellite systems and transmitter facilities that the Company depends upon to distribute its programming; |
• | disruptions or security breaches of the Company’s information technology infrastructure; |
• | the loss of key personnel; |
• | the Company’s ability to integrate acquired businesses and achieve fully the strategic and financial objectives related thereto and their impact on the Company’s financial condition and results of operations; |
• | the fact that the Company is 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. |
• | a radio station’s audience share in the demographic groups targeted by advertisers as measured principally by periodic reports issued by Nielsen Audio; |
• | the number of radio stations, as well as other forms of media, in the market competing for the attention of the same demographic groups; |
• | the supply of, and demand for, radio advertising time; and |
• | the size of the market. |
• | it involves a significant level of estimation uncertainty; and |
• | changes in the estimate or different estimates that could have been selected have had or are reasonably likely to have a material impact on our results of operations or financial condition. |
Three Months ended March 31, |
Change |
|||||||||||||||
2021 |
2022 |
$ |
% |
|||||||||||||
Net revenue |
$ | 48,212,040 | $ | 55,720,268 | $ | 7,508,228 | 15.6 | % | ||||||||
Operating expenses |
42,967,871 | 49,830,436 | 6,862,565 | 16.0 | ||||||||||||
Corporate expenses |
3,905,289 | 4,233,460 | 328,171 | 8.4 | ||||||||||||
Impairment loss |
— | 1,857,226 | 1,857,226 | — | ||||||||||||
Other operating expenses |
1,100,000 | — | (1,100,000 | ) | (100.0 | ) | ||||||||||
Interest expense |
5,778,071 | 6,849,037 | 1,070,966 | 18.5 | ||||||||||||
Loss on extinguishment of long-term debt |
4,996,731 | — | (4,996,731 | ) | (100.0 | ) | ||||||||||
Income tax benefit |
2,602,886 | 5,849,318 | 3,246,432 | 124.7 | ||||||||||||
Net loss |
10,684,641 | 3,738,945 | (6,945,696 | ) | (65.0 | ) |
Three Months ended March 31, |
Change |
|||||||||||||||
2021 |
2022 |
$ |
% |
|||||||||||||
Net revenue |
||||||||||||||||
Audio |
$ | 41,729,602 | $ | 47,365,145 | $ | 5,635,543 | 13.5 | % | ||||||||
Digital |
5,763,728 | 7,808,250 | 2,044,522 | 35.5 | ||||||||||||
Other |
718,710 | 546,873 | (171,837 | ) | (23.9 | ) | ||||||||||
|
|
|
|
|
|
|||||||||||
$ | 48,212,040 | $ | 55,720,268 | $ | 7,508,228 | 15.6 | ||||||||||
|
|
|
|
|
|
|||||||||||
Operating expenses |
||||||||||||||||
Audio |
$ | 34,735,469 | $ | 40,683,812 | $ | 5,948,343 | 17.1 | % | ||||||||
Digital |
7,257,915 | 8,401,763 | 1,143,848 | 15.8 | ||||||||||||
Other |
974,487 | 744,861 | (229,626 | ) | (23.6 | ) | ||||||||||
|
|
|
|
|
|
|||||||||||
$ | 42,967,871 | $ | 49,830,436 | $ | 6,862,565 | 16.0 | ||||||||||
|
|
|
|
|
|
• | internally generated cash flow; |
• | additional borrowings or notes offerings, to the extent permitted under the Indenture governing our Notes; and |
• | additional equity offerings. |
Three Months ended March 31, |
||||||||
2021 |
2022 |
|||||||
Net cash provided by operating activities |
$ | 2,354,007 | $ | 735,374 | ||||
Net cash used in investing activities |
(666,768 | ) | (1,375,775 | ) | ||||
Net cash provided by (used in) financing activities |
33,763,934 | (31,544 | ) | |||||
|
|
|
|
|||||
Net increase (decrease) in cash and cash equivalents |
$ | 35,451,173 | $ | (671,945 | ) | |||
|
|
|
|
ITEM 3. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. |
ITEM 4. |
CONTROLS AND PROCEDURES. |
Period |
Total Number of Shares Purchased |
Average Price Paid per Share |
Total Number of Shares Purchased as Part of Publicly Announced Program |
Approximate Dollar Value of Shares That May Yet Be Purchased Under the Program |
||||||||||||
January 1 – 31, 2022 |
4,400 | $ | 1.85 | — | — | |||||||||||
February 1 – 28, 2022 |
— | — | — | — | ||||||||||||
March 1 – 31, 2022 |
11,807 | 1.82 | — | — | ||||||||||||
|
|
|||||||||||||||
Total |
16,207 | |||||||||||||||
|
|
Exhibit Number |
Description | |
31.1 | Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) (17 CFR 240.15d-14(a)). | |
31.2 | Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) (17 CFR 240.15d-14(a)). | |
32.1 | Certification of Chief Executive Officer pursuant to Rule 13a-14(b)/15d-14(b) (17 CFR 240.15d-14(b)) and 18 U.S.C. Section 1350. | |
32.2 | Certification of Chief Financial Officer pursuant to Rule 13a-14(b)/15d-14(b) (17 CFR 240.15d-14(b)) and 18 U.S.C. Section 1350. | |
101.INS | XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |
101.SCH | XBRL Taxonomy Extension Schema Document. | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document. | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. | |
104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
BEASLEY BROADCAST GROUP, INC. | ||||
Dated: May 9, 2022 | /s/ Caroline Beasley | |||
Name: | Caroline Beasley | |||
Title: | Chief Executive Officer (principal executive officer) | |||
Dated: May 9, 2022 | /s/ Marie Tedesco | |||
Name: | Marie Tedesco | |||
Title: | Chief Financial Officer (principal financial and accounting officer) |