Beasley Broadcast Group took $26 million out of its cost structure to overcome pandemic challenges.
NAPLES — Citing a sharp decline in advertising, Naples-based Beasley Broadcast Group reported an operating loss of $17.6 million in the second quarter, down from operating income of $10.7 million in the 2019 second quarter.
The company, which owns and operates 64 radio stations in 15 large- and mid-size U.S. markets, also reported a net loss of $18.2 million, or $0.63 per diluted share, in the quarter. That’s off from net income of $4.3 million, or $0.15 per diluted share, in the 2019 second quarter, according to a statement. In addition to the steep drop in ad sales, the company took a $2.8 million loss on the modification of long-term debt, resulting from an amendment to the credit agreement on June 30, the release adds.
“While Beasley had a strong start to the year, a sharp decline in commercial advertising occurred in the second quarter with the onset of the COVID-19 pandemic,” Beasley Broadcast CEO Caroline Beasley says in the result. “Beasley’s financial results…reflect the economic pressures we experienced across our business as local and national advertisers adapted their media plans to meet the unique challenges of the pandemic. While we saw sequential month-over-month improvement in our commercial advertising revenue performance from April to May, and from May to June, our total net revenues for the second quarter decreased nearly 54%, which is in line with reported overall industry levels.”
The company has taken some steps toward overcoming the pandemic-led challenges, including reducing operating expenses and corporate overhead and realigning its cost structure company-wide to preserve cash. As a result, the company’s second quarter total operating expenses declined by 12.7%, and year-to-date, according to the release, it’s taken about $26 million out of its cost structure. The company previously announced it eliminated 67 positions and furloughed 18 employees. It also reduced executive's salaries.
Another positive sign comes from its digital and esports investments. Digital business accounted for some 14% of total second quarter revenue, compared to 7.4% of total revenue in the prior year period, the release states. “Overall, we continue to be encouraged by the momentum and long-term growth trajectory of our digital and esports businesses,” Beasley says in the release.
“Looking ahead, we are guardedly optimistic and remain focused on our strategic priorities of realizing synergy targets, reducing leverage, taking advantage of political and digital revenue opportunities, and benefiting from our esports investments and operations,” Beasley adds in the statement. “While we expect that the pandemic will continue to impact our operations in the third quarter, we intend to continue to actively manage our business to best position the company for the future, with the goal of delivering exceptional content and services to our listeners, advertisers, online users and esports fans, while creating new value for our shareholders.”