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 | ||
Class A |
Large accelerated filer |
☐ |
Accelerated filer |
☐ | |||
Non-accelerated filer |
☐ |
Smaller reporting company |
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Emerging growth company |
Page No. |
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PART I |
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FINANCIAL INFORMATION |
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Item 1. |
3 |
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7 |
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Item 2. |
13 |
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Item 3. |
19 |
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Item 4. |
19 |
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OTHER INFORMATION |
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Item 1. |
20 |
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Item 1A. |
20 |
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Item 2. |
20 |
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Item 3. |
20 |
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Item 4. |
20 |
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Item 5. |
20 |
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Item 6. |
21 |
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22 |
December 31, 2020 |
September 30, 2021 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
$ | $ | ||||||
Accounts receivable, less allowance for doubtful accounts of $ |
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Prepaid expenses |
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Other current assets |
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Total current assets |
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Property and equipment, net |
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Operating lease right-of-use |
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Finance lease right-of-use |
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FCC licenses |
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Goodwill |
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Other intangibles, net |
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Other assets |
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Total assets |
$ | $ | ||||||
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LIABILITIES AND EQUITY |
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Current liabilities: |
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Accounts payable |
$ | $ | ||||||
Operating lease liabilities |
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Finance lease liabilities |
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Other current liabilities |
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Total current liabilities |
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Due to related parties |
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Long-term debt, net of unamortized debt issuance costs |
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Operating lease liabilities |
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Finance lease liabilities |
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Deferred tax liabilities |
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Other long-term liabilities |
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Total liabilities |
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Commitments and contingencies |
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Stockholders’ equity: |
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Preferred stock, $ |
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Class A common stock, $ |
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Class B common stock, $ |
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Additional paid-in capital |
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Treasury stock, Class A common stock; |
( |
) | ( |
) | ||||
Retained earnings |
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Accumulated other comprehensive loss |
( |
) | ( |
) | ||||
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Total stockholders’ equity |
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Noncontrolling interests |
( |
) | ||||||
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Total equity |
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Total liabilities and equity |
$ | $ | ||||||
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|
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Three Months Ended September 30, |
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2020 |
2021 |
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Net revenue |
$ | $ | ||||||
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|
|
|
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Operating expenses: |
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Operating expenses (including stock-based compensation of $ |
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Corporate expenses (including stock-based compensation of $ |
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Depreciation and amortization |
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Other operating expense |
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Total operating expenses |
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|
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Operating income |
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Non-operating income (expense): |
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Interest expense |
( |
) | ( |
) | ||||
Other income (expense), 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 |
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|
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|
|
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Net loss attributable to BBGI stockholders |
$ | ( |
) | ( |
) | |||
|
|
|
|
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Net loss attributable to BBGI stockholders per Class A and Class B common share: |
||||||||
Basic and diluted |
$ | ( |
) | $ | ( |
) | ||
Weighted average shares outstanding: |
||||||||
Basic |
||||||||
Diluted |
Nine Months Ended September 30, |
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2020 |
2021 |
|||||||
Net revenue |
$ | $ | ||||||
|
|
|
|
|||||
Operating expenses: |
||||||||
Operating expenses (including stock-based compensation of $ |
||||||||
Corporate expenses (including stock-based compensation of $ |
||||||||
Depreciation and amortization |
||||||||
Impairment losses |
||||||||
Gain on disposition |
( |
) | ||||||
Other operating (income) expense, net |
( |
) | ||||||
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|
|
|
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Total operating expenses |
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|
|
|
|
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Operating income (loss) |
( |
) | ||||||
Non-operating income (expense): |
||||||||
Interest expense |
( |
) | ( |
) | ||||
Loss on extinguishment of long-term debt |
( |
) | ( |
) | ||||
Other income, net |
||||||||
|
|
|
|
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Loss before income taxes |
( |
) | ( |
) | ||||
Income tax benefit |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Loss before equity in earnings of unconsolidated affiliates |
( |
) | ( |
) | ||||
Equity in earnings of unconsolidated affiliates, net of tax |
( |
) | ( |
) | ||||
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|
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Net loss |
( |
) | ( |
) | ||||
Earnings attributable to noncontrolling interest |
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|
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Net loss attributable to BBGI stockholders |
$ | ( |
) | ( |
) | |||
|
|
|
|
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Net loss attributable to BBGI stockholders per Class A and Class B common share: |
||||||||
Basic and diluted |
$ | ( |
) | $ | ( |
) | ||
Dividends declared per common share |
$ | $ | ||||||
Weighted average shares outstanding: |
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Basic |
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Diluted |
Nine Months Ended September 30, |
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2020 |
2021 |
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Cash flows from operating activities: |
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Net loss |
$ |
( |
) | $ | ( |
) | ||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
||||||||
Stock-based compensation |
||||||||
Provision for bad debts |
( |
) | ||||||
Depreciation and amortization |
||||||||
Impairment losses |
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Non-cash interest expense |
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Gain on disposition |
( |
) | ||||||
Amortization of loan fees |
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Loss on extinguishment of long-term debt |
||||||||
Deferred income taxes |
( |
) | ( |
) | ||||
Equity in earnings of unconsolidated affiliates |
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Change in operating assets and liabilities: |
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Accounts receivable |
||||||||
Prepaid expenses |
( |
) | ( |
) | ||||
Other assets |
( |
) | ||||||
Accounts payable |
( |
) | ||||||
Other liabilities |
( |
) | ||||||
Other operating activities |
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|
|
|
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Net cash provided by (used in) operating activities |
( |
) | ||||||
|
|
|
|
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Cash flows from investing activities: |
||||||||
Capital expenditures |
( |
) | ( |
) | ||||
Proceeds from dispositions |
||||||||
Proceeds from life insurance |
||||||||
Payments for investments |
( |
) | ||||||
|
|
|
|
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Net cash used in investing activities |
( |
) | ( |
) | ||||
|
|
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|
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Cash flows from financing activities: |
||||||||
Issuance of debt |
||||||||
Payments on debt |
( |
) | ( |
) | ||||
Payment of debt issuance costs |
( |
) | ( |
) | ||||
Reduction of finance lease liabilities |
( |
) | ( |
) | ||||
Dividends paid |
( |
) | ||||||
Purchase of treasury stock |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net cash provided by financing activities |
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|
|
|
|
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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 |
$ | $ | ||||||
|
|
|
|
|||||
Class A common stock issued for debt repayment |
$ | $ | ||||||
|
|
|
|
Revenue growth rates |
( | |
Market revenue shares at maturity |
||
Operating income margins at maturity |
||
Discount rate |
December 31, 2020 |
September 30, 2021 |
|||||||
Secured notes |
$ | — | $ | |
||||
PPP loan |
— | |||||||
Credit facility - term loan |
— | |||||||
Credit facility - revolving credit facility |
— | |||||||
Promissory note |
— | |||||||
|
|
|
|
|||||
Less unamortized debt issuance costs |
( |
) | ( |
) | ||||
|
|
|
|
|||||
$ | |
$ | ||||||
|
|
|
|
Three months ended September 30, |
Nine months ended September 30, |
|||||||||||||||
2020 |
2021 |
2020 |
2021 |
|||||||||||||
Beginning balance |
$ | |
$ | |
$ | |
$ | |
||||||||
Issuance of common stock |
— | — | ||||||||||||||
Stock-based compensation |
||||||||||||||||
Acquisition of noncontrolling interest |
— | — | — | ( |
) | |||||||||||
Purchase of treasury stock |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Net loss |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Elimination of noncontrolling interest |
— | — | — | |||||||||||||
Cash dividends |
— | — | ( |
) | — | |||||||||||
Noncontrolling interest created in consolidation |
— | — | — | |||||||||||||
Ending balance |
$ | $ | $ | $ | ||||||||||||
Three months ended September 30, |
Nine months ended September 30, |
|||||||||||||||
2020 |
2021 |
2020 |
2021 |
|||||||||||||
Audio |
$ | |
$ | |
$ | |
$ | |
||||||||
Digital |
||||||||||||||||
Other |
||||||||||||||||
$ | $ | $ | $ | |||||||||||||
December 31, 2020 |
September 30, 2021 |
|||||||
Deferred revenue |
$ | |
$ | |
Three months ended September 30, |
Nine months ended September 30, |
|||||||||||||||
2020 |
2021 |
2020 |
2021 |
|||||||||||||
Losses on receivables |
$ | |
$ | |
$ | |
$ | |
December 31, 2020 |
September 30, 2021 |
|||||||
Trade sales receivable |
$ | |
$ | |
||||
Trade sales payable |
Three months ended September 30, |
Nine months ended September 30, |
|||||||||||||||
2020 |
2021 |
2020 |
2021 |
|||||||||||||
Trade sales revenue |
$ | |
$ | |
$ | |
$ | |
Units |
Weighted- Average Grant-Date Fair Value |
|||||||
Unvested as of July 1, 2021 |
$ | |
||||||
Granted |
||||||||
Vested |
||||||||
Forfeited |
||||||||
Unvested as of September 30, 2021 |
$ | |||||||
Shares |
Weighted- Average Grant-Date Fair Value |
|||||||
Unvested as of July 1, 2021 |
$ | |
||||||
Vested |
( |
) | ||||||
Forfeited |
||||||||
Unvested as of September 30, 2021 |
$ | |||||||
Three months ended September 30, |
Nine months ended September 30, |
|||||||||||||||
2020 |
2021 |
2020 |
2021 |
|||||||||||||
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 |
||||||||||||||||||||
Operating income (loss) |
$ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||
Audio |
Digital |
Other |
Corporate |
Total |
||||||||||||||||
Net revenue |
$ | $ | $ | $ | $ | |||||||||||||||
Operating expenses |
||||||||||||||||||||
Corporate expenses |
||||||||||||||||||||
Depreciation and amortization |
||||||||||||||||||||
Gain on disposition |
( |
) | ( |
) | ||||||||||||||||
Other operating (income) expense, net |
( |
) | ( |
) | ||||||||||||||||
Operating income (loss) |
$ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | |||||||||
Audio |
Digital |
Other |
Corporate |
Total |
||||||||||||||||
Capital expenditures |
$ | $ | $ | $ | $ | |||||||||||||||
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, as well as any changes to federal, state or local government laws, regulations or orders in connection with the pandemic; |
• | 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; |
• | 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 requires assumptions to be made that were uncertain at the time the estimate was made; and |
• | changes in the estimate or different estimates that could have been selected could have a material impact on our results of operations or financial condition. |
Three Months ended September 30, |
Change |
|||||||||||||||
2020 |
2021 |
$ |
% |
|||||||||||||
Net revenue |
$ | 49,649,659 | $ | 62,902,935 | $ | 13,253,276 | 26.7 | % | ||||||||
Operating expenses |
41,589,490 | 51,186,064 | 9,596,574 | 23.1 | ||||||||||||
Corporate expenses |
3,712,816 | 3,980,815 | 267,999 | 7.2 | ||||||||||||
Other operating expense |
600,000 | — | (600,000 | ) | (100.0 | ) | ||||||||||
Interest expense |
4,544,235 | 7,021,577 | 2,477,342 | 54.5 | ||||||||||||
Income tax benefit |
(1,031,166 | ) | (515,380 | ) | 515,786 | 50.0 | ||||||||||
Net loss |
(2,724,774 | ) | (1,620,323 | ) | 1,104,451 | 40.5 |
Nine Months ended September 30, |
Change |
|||||||||||||||
2020 |
2021 |
$ |
% |
|||||||||||||
Net revenue |
$ | 137,683,217 | $ | 170,689,680 | $ | 33,006,463 | 24.0 | % | ||||||||
Operating expenses |
133,868,282 | 142,648,355 | 8,780,073 | 6.6 | ||||||||||||
Corporate expenses |
11,950,672 | 11,843,958 | (106,714 | ) | (0.9 | ) | ||||||||||
Impairment losses |
6,804,412 | — | (6,804,412 | ) | (100.0 | ) | ||||||||||
Other operating (income) expense, net |
600,000 | (400,000 | ) | (1,000,000 | ) | (166.7 | ) | |||||||||
Interest expense |
12,580,706 | 19,665,017 | 7,084,311 | 56.3 | ||||||||||||
Loss on extinguishment of long-term debt |
2,798,789 | 4,996,731 | 2,197,942 | 78.5 | ||||||||||||
Income tax benefit |
(9,490,892 | ) | (4,417,660 | ) | 5,073,232 | 53.5 | ||||||||||
Net loss |
(29,838,734 | ) | (12,117,270 | ) | 17,721,464 | 59.4 |
• | internally generated cash flow; |
• | additional borrowings or notes offerings, to the extent permitted under the Indenture governing our Notes; and |
• | additional equity offerings. |
Nine Months ended September 30, |
||||||||
2020 |
2021 |
|||||||
Net cash provided by (used in) operating activities |
$ | 800,567 | $ | (5,977,001) | ||||
Net cash used in investing activities |
(7,996,619 | ) | (342,250 | ) | ||||
Net cash provided by financing activities |
4,040,306 | 33,701,577 | ||||||
|
|
|
|
|||||
Net increase (decrease) in cash and cash equivalents |
$ | (3,155,746 | ) | $ | 27,382,326 | |||
|
|
|
|
ITEM 3. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. |
ITEM 4. |
CONTROLS AND PROCEDURES. |
ITEM 1. |
LEGAL PROCEEDINGS. |
ITEM 1A. |
RISK FACTORS. |
ITEM 2. |
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. |
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 |
||||||||||||
July 1 – 31, 2021 |
— | — | — | — | ||||||||||||
August 1 – 31, 2021 |
— | — | — | — | ||||||||||||
September 1 – 30, 2021 |
1,875 | $ | 2.56 | — | — | |||||||||||
|
|
|||||||||||||||
Total |
1,875 | |||||||||||||||
|
|
ITEM 3. |
DEFAULTS UPON SENIOR SECURITIES. |
ITEM 4. |
MINE SAFETY DISCLOSURES. |
ITEM 5. |
OTHER INFORMATION. |
ITEM 6. |
EXHIBITS. |
BEASLEY BROADCAST GROUP, INC. | ||||||
Dated: November 5, 2021 | /s/ Caroline Beasley | |||||
Name: Caroline Beasley | ||||||
Title: Chief Executive Officer (principal executive officer) | ||||||
Dated: November 5, 2021 | /s/ Marie Tedesco | |||||
Name: Marie Tedesco | ||||||
Title: Chief Financial Officer (principal financial and accounting officer) |