Naples-based Beasley Broadcast weathers economic storm by focusing on what it can control
Naples-based radio operator Beasley Broadcast Group is navigating through challenging economic times by focusing on what it can control.
That includes corporate expenses.
In announcing its third-quarter results, the company shared that it has made $10 million in permanent expense reductions. Roughly half of the savings came from cuts to its headcount, said Caroline Beasley, the company's CEO.
"We continue to experience increased volatility in national spot advertising, which accounted for approximately 15% of our third-quarter net revenues. The ongoing strength of our digital and local audio advertising revenues is helping us to partially offset these declines," she said.
Previous coverage:
Beasley Broadcast sees revenue surge in third quarter but reports loss
Naples-based Beasley Broadcast Group finished strong in 2021
Beasley sees revenue rise but swings to a loss, hit by higher interest rates
Beasley Broadcast Group's ongoing digital transformation
Amid economic uncertainty, the company's ongoing digital transformation and revenue diversification strategies continue to pay off.
In the third quarter, net revenue rose 1.5% over the year to $63.8 million, primarily reflecting an uptick in digital revenue.
An increase in political advertising for the mid-term elections contributed to the overall gain in revenue.
In the third quarter, the company earned $500,000, or 2 cents a share. That compared to a loss of $1.6 million, or 6 cents a share, a year ago, which was primarily blamed on one-time charges related to the early extinguishment of long-term debt.
The latest results beat Wall Street's expectations.
On average, analysts predicted a loss of 3 cents a share on revenue of $63.52 million, according to Yahoo Finance.
Shares rose on the positive news.
Expounding on the results, Beasley said: "Digital remains a key component of our revenue diversification strategy. Digital revenue increased 23.1% year-over-year representing 16.0% of total third-quarter revenues, while our digital margin improved."
The company continues to benefit from the acquisition of a small "white label" digital marketing agency it acquired in late June.
"In both the second and third quarters, digital revenue accounted for a larger share of our revenue than national advertising, and we expect this revenue source to continue offsetting national spot weakness in the coming quarters," Beasley said.
In the third quarter, the company saw a slight decrease in its audio — or traditional — revenue related to the softness of national advertising. However, local advertising continued to gain strength, contributing to a $12.3 million increase in station operating income.
Corporate expenses rose by $1.2 million in the quarter, primarily due to investments in the company's digital business and a hike in severance pay, related to the reduction of headcount.
At quarter end, Beasley had $32.8 million of cash — or cash equivalents — on hand.
"We intend to keep our cash on the balance sheet in order to maintain our strong liquidity position, given the uncertain economic environment," Beasley said.
The third-quarter results, she said, "demonstrate the strength and relevance of our industry-leading audio and digital content, as well as our teams’ extraordinary efforts to serve our listeners, customers and communities through challenging circumstances."
"While we cannot control how the economic situation evolves in the coming months, we have already taken decisive steps to mitigate the impact of near-term headwinds and drive continued progress against our long-term growth strategy," Beasley said. "Looking ahead, we will continue to focus on maximizing our growth opportunities, managing our expenses and capital structure, serving our audiences and advertisers and delivering results for our stockholders.”
While shares rose Monday due to the stronger-than-expected quarterly performance, they've lost more than 58% of their value over the past year. That compares to the S&P 500's decline of less than 20%.
Founded in 1961, Beasley Broadcast owns and operates 61 AM and FM stations in 14 large- and mid-size markets across the country, including Naples-Fort Myers.
The company's stations reach about 20 million listeners weekly over the air, online and on smart devices, and millions regularly engage with the company’s brands and personalities through digital platforms, from Facebook to Twitter.
This article originally appeared on Naples Daily News: Beasley Broadcast Group beats Wall Street's expectations in third quarter
