Beasley Broadcast(US:BBGI)2020-02-18 17:50Financial Data and Key Metrics Changes - Fourth quarter revenue decreased 4.6% year-over-year to $72.1 million, primarily due to a decline in political revenue [6][10] - Full year 2019 revenue increased 1.6% on an actual basis, with a decrease of 1.1% on a same-station basis [8][10] - Fourth quarter free cash flow increased to $20.7 million compared to $8.6 million in the prior year [17] - Full year 2019 free cash flow increased to $33.5 million from $25.5 million in the prior year [18] Business Line Data and Key Metrics Changes - Digital revenues rose 44% year-over-year in Q4, accounting for 9.2% of total revenue, up from 6.1% in the same quarter last year [7][20] - Consumer services remained the largest revenue category at around 26% of total revenue, with a 4% year-over-year increase [12] - Retail category declined 8% year-over-year, while auto category increased by 2% driven by Boston, Detroit, and Philadelphia clusters [12] Market Data and Key Metrics Changes - Revenue increases were realized in six markets: Augusta, Charlotte, Detroit, Philadelphia, and Wilmington [10] - Las Vegas saw the biggest decline due to high political revenue booked in 2018 [10] Company Strategy and Development Direction - The company is focused on diversifying revenue and cash flow, particularly through investments in esports and digital initiatives [4][20] - The acquisition of the Houston Outlaws is part of the strategy to expand in the esports space [4][21] - The company aims to capture a 30% revenue share in each market while delivering valuable synergies [5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing digital growth initiatives, expecting continued solid growth in 2020 [20][21] - The company anticipates EBITDA margins to grow throughout the year as digital revenue exceeds investment costs [28] Other Important Information - Corporate G&A expenses increased due to investments in building out the digital platform [13] - Total outstanding debt at December 31, 2019, was $263.5 million, with a leverage ratio of 5.02x [16] Q&A Session Summary Question: Are you seeing any political dollars from Bloomberg and can you quantify it? - The company has about $1 million in political revenue booked, with at least half coming from Bloomberg [25] Question: Where do you expect leverage to sit at the end of the year? - The company projects leverage to be around 4.2x at the end of 2020 [26] Question: How should we think about operating expense trends for 2020 given all the investment spend? - EBITDA margins are expected to be flat in the first quarter, with growth anticipated for the rest of the year as digital revenue increases [27][28]