Beasley Reports 9% Revenue Gain, $14.5 Million Net Loss In Q2.
The ongoing advertising rebound from the pandemic in tandem with higher political ad sales propelled second quarter revenue to $64.8 million at Beasley Media Group, up 8.8% from $59.6 million one year earlier. The company reported growth across all its revenue sources with audio up 4.3% year-over-year and a 34.3% gain in digital billings. Digital made up 16.5% of Beasley’s Q2 revenue.
The company reported a second quarter operating loss of $4.5 million compared to operating income of $5.8 million in the comparable year-ago period. The loss reflects a non-cash impairment charge of $8.6 million, which Beasley attributed to “an increase in the discount rate used in the analyses to estimate the fair value of FCC licenses and goodwill in a rising interest rate environment.” That, in combination with $1.5 million in life insurance proceeds related to the death of former Chairman George Beasley received in 2021’s second quarter, caused a Q2 2022 net loss of $14.5 million compared to net income of $200,000 one year earlier. That amounts to a loss of 48 cents per diluted share compared to a gain of one cent per diluted share, in the three months ended June 30, 2021. Station operating income inched up fractionally year-over-year to $11.2 million from $11.1 million.
In a press release ahead of the company’s quarterly earnings call with analysts, CEO Caroline Beasley called it “another period of strong top-line results… Digital remains a central component of our revenue diversification strategy, and the momentum we are seeing in our digital business is further underpinned by our ability to grow digital revenue 37% on a quarterly sequential basis, while also improving our digital margin,” she said.
The company’s sellers attracted a “robust” number of new clients, writing up $7.8 million in new business during the quarter, a 60% increase from first quarter 2022 and up 16% over the comparable prior year period.
The broadcaster quietly acquired a small white label digital agency at the end of June, which Caroline Beasley said “will immediately contribute positive cash flow and synergies. We believe these results continue to demonstrate the inaccuracy of the perception that radio is more challenged than other segments of the technology, media, and telecom sector,” she added.
Beasley Media Group ended the second quarter with $295.0 million in debt and $45.9 million of cash on hand. During the quarter it paid back $5.0 million of its 8.625% senior secured notes at a discount and made an interest payment of $12.9 million. Caroline Beasley said the company’s “strong liquidity position enables us to make debt repayments while providing us with the financial flexibility to pursue a potential acquisition or investment in the digital space, should an opportunity arise, that could accelerate our digital growth, provide synergies or improve financial results.”
Beasley is the first radio broadcaster to report second quarter results and industry watchers are anxious to see how concerns about a potential downturn in the U.S. economy are impacting radio revenue trends. It’s something Caroline Beasley said they are “keeping a close eye on” and initiated cost cuts to address early in the second quarter. “Looking ahead, we will continue to focus on controlling what we can control, maximizing our growth opportunities, managing our expenses and capital structure, serving our audiences and advertisers and delivering results for our stockholders,” she said.