Beasley Broadcast Group has reported first quarter net revenue of $57.7 million, essentially flat compared to Q1 a year ago. The figure was credited to strong political revenue, increases from digital ads and esports and the addition of WDMK/Detroit. However, net revenue increases were offset by losses in ad revenue and related financial impact of the COVID-19 pandemic. Net income fell from $1.4 million a year ago to a $8.8 million loss in the first quarter of 2020.
CEO Caroline Beasley said, “During the first quarter, the broadcast industry experienced a rapid deterioration in market conditions brought on by the onset of the COVID-19 pandemic, which resulted in a significant decline in commercial advertising revenue in March. Despite these challenges, first quarter net revenue was $57.7 million, primarily reflecting strong performance across our station clusters in seven markets during the months of January and February driven by robust political ad spending and contributions from WDMK-FM, as well as significant growth in digital and esports revenue. However, our top-line growth was not able to fully offset the acute challenges brought on by the COVID-19 pandemic during the three-month period, resulting in a year-over-year decline in first quarter SOI and Free Cash Flow.”
She added, “Since the nationwide COVID-19 outbreak, we implemented immediate actions to adapt our business to protect our employees and preserve liquidity in order to best position the company, our stations, our digital operations, and our esports interests for renewed long-term success. In this regard, we have quickly implemented several changes across the company including reducing operating expenses and corporate overhead, decreasing selling, general and administrative costs and realigning our company-wide cost structure to preserve cash.
“Beasley expects these actions to reduce total annual operating expenses by approximately $21 million compared to full year 2019 levels, to offset the reduction in traditional advertising revenue that has occurred as a result of the pandemic. Notably, while mandated stay at home orders severely impacted advertising revenue in March, April and May, we have seen recent increases in advertising activity in markets that have re-opened, with May advertising revenues ahead of April, and bookings for June, as of today, already exceeding May’s results.”
