Beasley Broadcast Group, Inc. (NASDAQ:BBGI) Q3 2023 Earnings Call Transcript
Beasley Broadcast Group, Inc. (NASDAQ:BBGI) Q3 2023 Earnings Call Transcript November 1, 2023
Operator: Good morning and welcome to Beasley Broadcast Group's Third Quarter 2023 Conference Call. Before proceeding, I'd 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 despite in the Risk Factors 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 of Regulation S-K. 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'd also 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 and Press Room section of the site. At this time, I would like to turn the conference over to your host, Beasley Broadcast Group's CEO, Caroline Beasley. Please go ahead.
Caroline Beasley: Thank you very much, and good morning. Welcome to our third quarter conference call. Marie Tedesco, our CFO, is with me this morning. The third quarter saw continued softness in the advertising market with the cyclical offset of political, which led to a 5.8% revenue decline. However, excluding last year's political revenue of approximately $1.8 million revenue was down 3.2% or $2 million. And on a positive note, our quarterly digital revenue continued to show year-over-year growth and with our proactive expense management initiatives, we decreased our operating expenses by 2.7%, resulting in SOI of $10 million and EBITDA of $5.5 million or down $2.3 million and $1.7 million, respectively. While overall revenue decreased 5.8%, we saw increases in digital, which was up 9.1% and network increasing 35%.
Aerial view of broadcast segment of the media company at work.
With our consistent digital revenue growth and currently representing almost 19% of total revenue we are within a basis point of reaching the lower end of our goal of digital accounting for 20% to 30% of total revenue. The increases from digital and network were offset by challenges in National, which was down $2.6 million or 20% and down 8% excluding political. And local was also down 6%. The softness of the local side was a result of a soft local agency market, which was down 4.7% and local direct market, which was down 3.5%. As a result of this softness, we reprioritized our efforts mid-quarter with a renewed focus on developing mobile direct new business. And as a result, local new business grew 22%, $7.8 million, up from $6.4 million in the prior year.
In the sports betting category, we recorded $3.7 million in the third quarter down 2.6% from the prior year, with sports betting representing 6% of total revenue. Sports betting was driven by increased spending in Boston, which generated $1.9 million this quarter versus $325,000 in the prior year. We expect sports betting in Boston to increase in fourth quarter with increased Patriots, Celtics and Bruins games. These gains were offset by year-over-year decreases in Detroit and Philadelphia. Now breaking down the quarter's total revenue trends, July was down 4.8%, August was down 5.1% and September, showing a slight improvement declined 2.3%. September, excluding political, increased 2.1% or by $530,000, which reflected our focus on developing local direct business.
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