Beasley Media Group says it experienced a less severe revenue decline for third quarter 2020 as advertisers slowly returned to the airwaves in the summer months. Net revenues at the Naples, FL-based group fell 25% to $49.6 million from $66.1 million in the prior year. That’s a major improvement from second quarter, when billings tumbled 54%. Comparing quarter to quarter, Beasley’s revenues are up 63.4% from Q2 2020.
The company reported a net loss of $2.7 million, or 8 cents per share, compared to $3.0 million in net income, or 11 cents per share, one year earlier.
Massive losses in advertising due to business disruptions from the COVID-19 outbreak were once again the culprit, although Beasley says it saw some gains in digital, esports and political revenue and contributions from the August 2019 acquisition of WDMK Detroit from Urban One.
In a press release ahead of the company’s Tuesday morning earnings call, CEO Caroline Beasley said the company experienced a “strong recovery” in the quarter. “It is clear that the immediate actions we took to address the pandemic, including reducing station operating expenses, headcount reductions, furloughs, and negotiated discounts with landlords, service providers and partners have contributed to Beasley’s ability to rebound quickly,” she said. “This focus, combined with the resumption of advertising in key categories, the experience of our teams who have managed through previous economic challenges, the quality of our content, and the role we play in the communities we serve, have all contributed to our ability to turn the corner as evidenced by the positive [station operating income] recorded in the 2020 third quarter.”
Business improved each month in the quarter. July was up 8% over June, August was 24% better than July and September rose 22% over August.
Looking ahead to fourth quarter, the company reports net revenue for October increased in the low- to mid-single digits when compared to September and November is currently pacing down in the low teens.
Along with a return of advertising in key categories and the addition of much-needed political ad dollars, Caroline Beasley said the company continued to post positive results from its digital and esports investments, which have been less impacted by the pandemic. Third quarter digital revenue rose 1.8% year-over-year to $5.0 million and its new esports division generated $500,000 of revenue during the period. Digital revenue accounted for 10.1% of total third quarter revenue, up from 7.4% in the prior year period.
Like its publicly traded radio peers, Beasley made major cutbacks in headcounts and expenses to mitigate the economic wallop of the pandemic. That caused Q3 operating expenses to tumble by 15.9%. By year end, Beasley will have reduced its operating expenses by more than $32 million compared to its 2020 operating budget. A “meaningful portion” of the expense reductions will be recurring, as the company continues to make “fundamental changes to improve processes and efficiencies,” the CEO said.
“While the last several months have presented unprecedented challenges for ad-reliant businesses, I am extremely proud of the way our corporate and station level leaders and valued team members rose to the occasion and worked tirelessly to enable Beasley to return to positive cash flow in the third quarter,” Caroline Beasley said. “Looking ahead to the fourth quarter and 2021, we intend to continue our focus on growing our cash flow and maintaining a strong balance sheet with liquidity at current or higher levels. Growing ratings, diversifying revenue and delivering exceptional content and services to our listeners, advertisers, online users and esports fans will remain our focus.”