As third quarter earnings season gets underway, prepare for a new C-suite message in heavy rotation: Things are getting better, but we’re not out of the woods yet. Beasley Media Group cut its second quarter revenue decline by more than half in Q3 to 25% from 54% in Q2, year over year. “We continue to see a vast improvement,” CEO Caroline Beasley told analysts. “We started each month with more dollars on the books than where we ended the previous month.”
Beasley’s earnings call foreshadowed what will almost certainly be radio’s richest political ad bounty ever. The Naples, FL-based broadcaster reeled in more than twice the amount of election ad revenue that it budgeted for. With $3 million on the books for the three months ended Sept. 30, political was the company’s fourth largest ad category, accounting for nearly one in every 10 ad dollars spent. And it was the only category to show year-over-year growth.
Consumer services, which made up 27% of the company’s revenue in the quarter, tumbled 21%. Retail, its second biggest vertical with 16% of billings, fell 25.5%. Auto, once radio’s top category, downshifted to third place while plummeting 34% and making up only 12% of revenue. Auto advertising took the biggest hits in Boston, Charlotte, Fayetteville and Las Vegas. After political in fourth place was telecom/utilities with 6.3% of revenues, down. 21% Consumer products came in sixth, plunging 46% to make up 6% of ad dollars.
All told, spot revenue dipped 28% with local down 34%, national decreasing 11% and digital up 1.8%. Digital, the bright spot of Q3, grew 8.7% year-to-date.
Beasley made big bets on esports, buying up the Houston Outlaws and the Detroit Renegades, and the division put about half a million dollars on the books during the quarter. Caroline Beasley suggested the company has more up its sleeve in the space, giving investors a “more to come” heads-up for fourth quarter.
In another COVID-era mantra being repeated in the radio industry, Beasley said its focus is on growing cash flow and maintaining a strong balance sheet. The company’s lenders have issued a hall pass on loan covenants until September 2021 and Beasley is trying to get its leverage ratio down to four-times from the current mid-four-times level. Caroline Beasley also took a bow on the call for a strong ratings performance in the quarter, boasting that they currently have one or more of the top three stations among persons 25-54 in 11 of their 13 rated markets.
Net revenues for the quarter fell 25% to $49.6 million from $66.1 million in the prior year. Comparing quarter to quarter, Beasley’s revenues are up 63.4% from Q2 2020.
The company reported a net loss of $2.7 million, or 8 cents per share, compared to $3.0 million in net income, or 11 cents per share, one year earlier.
Like its publicly traded radio peers, Beasley made major cutbacks in headcounts and expenses to mitigate the economic wallop of the pandemic. That caused Q3 operating expenses to tumble by 15.9%. By year-end, Beasley will have reduced its operating expenses by more than $32 million compared to its 2020 operating budget. A “meaningful portion” of the expense reductions will be recurring, as the company continues to make “fundamental changes to improve processes and efficiencies,” the CEO said.