Beasley Broadcast Group Inc. (NASDAQ:BBGI) Q4 2018 Earnings Conference Call Transcript

Feb 11, 2019 • 11:00 am ET

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Beasley Broadcast Group Inc. (NASDAQ:BBGI) Q4 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good morning, and welcome to the Beasley Broadcast Group Fourth Quarter 2018 Conference 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 reports on Form 10-K.

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 the 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, 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 or Press Room section of the site.

At this time, I would like to turn the conference over to your host, Beasley Broadcast Group's Chief Executive Officer, Caroline Beasley. Please go ahead.

Executive
Caroline Beasley

Thank you, Sandy, and good morning, everyone. Thank you for joining us to review our solid 2018 fourth quarter operating results. In a moment, I'll review the quarterly highlights, after which our CFO, Marie Tedesco, will provide more detail of the fourth quarter results. I'd ask you to please refer to today's earnings release for details on the stations included in actual results for 2018 and 2017.

So, we ended 2018 strongly, as we increased the actual fourth quarter revenue by 29.1%. The revenue growth was broad-based with increases at 10 of our 13 clusters, and we also benefited from our September 2018 acquisition of XTU, the December 2017 Boston station swap and approximately $3.9 million of fourth quarter gross political revenue.

The revenue increase for the quarter on a pro forma basis was an equally impressive 9.9%, and excluding political revenue, pro forma revenue rose 5.1%, which demonstrates the strength of core advertising in our markets during the quarter. Our strongest revenue performing clusters for the quarter were Philadelphia, Boston, Las Vegas and Tampa.

Actual reported fourth quarter SOI rose 37.2% to $20.6 million, as we increased our margins to 27.3% from 25.7% in the year-ago quarter. We achieved a strong SOI growth despite the increase in quarterly station operating expenses, as a result of the XTU acquisition and operations of BG.

I'm delighted to report that the integration of XTU have exceeded our internal projections and expectations, as the station posted impressive fourth quarter growth with station revenues growing 13.8% and SOI increasing north of 30%. The return of this heritage country station is a great complement to our existing Philly cluster, and has strengthened our competitive revenue position in the market, as our Philly cluster grew fourth quarter revenue 14.6% on a pro forma basis. The addition of XTU has quickly moved us closer to our