Beasley Broadcast Group, Inc. (BBGI) Bundle
Understanding Beasley Broadcast Group, Inc. (BBGI) Revenue Streams
Understanding Beasley Broadcast Group, Inc.’s Revenue Streams
The revenue model of this company is primarily derived from two segments: Audio and Digital. Below is a detailed breakdown of their revenue sources and historical performance.
Breakdown of Primary Revenue Sources
| Segment | Nine Months Ended September 30, 2023 | Nine Months Ended September 30, 2024 | Change ($) | Change (%) |
|---|---|---|---|---|
| Audio | $146,198,774 | $137,748,127 | $(8,450,647) | (5.8%) |
| Digital | $33,455,935 | $35,257,992 | $1,802,057 | 5.4% |
| Other | $1,705,891 | $0 | $(1,705,891) | (100.0%) |
| Total Revenue | $181,360,600 | $173,006,119 | $(8,354,481) | (4.6%) |
Year-over-Year Revenue Growth Rate
Over the nine months ending September 30, 2024, the total revenue dropped by 4.6%, primarily driven by a significant decline in Audio revenue. Audio revenue alone saw a decrease of $8.45 million, while Digital revenue experienced a modest growth of $1.8 million.
Contribution of Different Business Segments to Overall Revenue
During the nine months ended September 30, 2024, the Audio segment contributed 79.7% of the total revenue, while the Digital segment accounted for 20.4%. The Other segment, which previously included esports operations, no longer contributed to revenue in 2024, reflecting a strategic shift in operations.
Analysis of Significant Changes in Revenue Streams
The notable decline in Audio revenue was attributed to a decrease in local agency revenue and the sale of WJBR-FM in Wilmington, DE. This was partially offset by an increase in political advertising related to the 2024 elections. The Digital segment's growth was driven by continued investment in digital advertising strategies, resulting in a year-over-year increase.
Overall, the changes in revenue streams indicate a shift towards digital platforms while facing challenges in traditional audio revenue generation.
A Deep Dive into Beasley Broadcast Group, Inc. (BBGI) Profitability
Profitability Metrics
Gross Profit Margin: As of September 30, 2024, the gross profit margin was calculated as follows:
| Period | Net Revenue | Operating Expenses | Gross Profit | Gross Profit Margin (%) |
|---|---|---|---|---|
| Nine Months Ended September 30, 2023 | $181,360,600 | $152,098,261 | $29,262,339 | 16.13% |
| Nine Months Ended September 30, 2024 | $173,006,119 | $148,534,924 | $24,471,195 | 14.14% |
Operating Profit Margin: The operating profit margin for the same periods is as follows:
| Period | Operating Income (Loss) | Operating Profit Margin (%) |
|---|---|---|
| Nine Months Ended September 30, 2023 | ($89,573,463) | (49.39%) |
| Nine Months Ended September 30, 2024 | $5,509,355 | 3.18% |
Net Profit Margin: The net profit margin reflected the following:
| Period | Net Loss | Net Profit Margin (%) |
|---|---|---|
| Nine Months Ended September 30, 2023 | ($81,504,032) | (44.92%) |
| Nine Months Ended September 30, 2024 | ($3,828,626) | (2.21%) |
Trends in Profitability Over Time: The financial data indicates a significant turnaround in profitability metrics from 2023 to 2024. The gross profit margin decreased from 16.13% to 14.14%, while the operating profit margin improved from (49.39%) to 3.18%. Additionally, the net profit margin improved from (44.92%) to (2.21%).
Comparison of Profitability Ratios with Industry Averages: The industry average net profit margin for broadcasting companies typically ranges between 3% to 10%. Thus, the company's (2.21%) net profit margin as of September 30, 2024, indicates room for improvement to meet industry standards.
Analysis of Operational Efficiency: The operating expenses decreased from $152,098,261 in 2023 to $148,534,924 in 2024, reflecting a reduction of 2.3%. This decrease in operating expenses, coupled with an increase in revenue from digital segments, highlights improved operational efficiency.
Operating Income Analysis: The operating income shifted significantly from a loss of $89,573,463 in 2023 to a profit of $5,509,355 in 2024, showcasing effective cost management and improved revenue generation strategies.
Income Tax Benefit: The income tax benefit decreased from $26,285,207 in 2023 to $1,796,019 in 2024, indicating a reduced tax shield due to lower losses reported in 2024.
Key Financial Summary:
| Metric | 2023 | 2024 |
|---|---|---|
| Net Revenue | $181,360,600 | $173,006,119 |
| Operating Expenses | $152,098,261 | $148,534,924 |
| Net Loss | $81,504,032 | $3,828,626 |
| Operating Income | ($89,573,463) | $5,509,355 |
| Net Profit Margin (%) | (44.92%) | (2.21%) |
Debt vs. Equity: How Beasley Broadcast Group, Inc. (BBGI) Finances Its Growth
Debt vs. Equity: How Beasley Broadcast Group, Inc. Finances Its Growth
Long-term Debt: As of September 30, 2024, the company's long-term debt is comprised of secured notes totaling $267,000,000. After accounting for unamortized debt issuance costs of $1,790,074, the net long-term debt stands at $265,209,926.
Short-term Debt: The short-term debt includes a portion of the existing notes due within the next year, which is not specified in the provided data but is typically a fraction of the total long-term debt. The exact amount would require further details from the balance sheet.
Debt-to-Equity Ratio: The total liabilities as of September 30, 2024, amount to $425,645,656, while the total stockholders' equity is $145,833,131. This results in a debt-to-equity ratio of approximately 2.92, indicating a significant reliance on debt financing compared to equity.
Industry Comparison: The average debt-to-equity ratio for the radio broadcasting industry typically ranges between 1.0 to 2.0. Hence, the company's ratio of 2.92 suggests it is above the industry standard, which may indicate higher financial risk.
Recent Debt Issuances and Refinancing Activity
On October 8, 2024, the company completed a refinancing transaction involving the exchange of $194.7 million of existing notes for $184.9 million of newly issued 9.200% Senior Secured Second Lien Notes due August 1, 2028, and approximately $1.0 million in cash. This exchange reflects a strategic move to manage its debt maturities effectively.
Credit Ratings: The company has not disclosed specific credit ratings in the available data, but its high debt levels may impact its creditworthiness compared to lower-leveraged peers.
Balance Between Debt Financing and Equity Funding
The company has historically relied on debt financing to fuel growth and acquisitions, as evidenced by the issuance of $300.0 million in senior secured notes in February 2021. The balance between debt and equity funding is crucial for maintaining operational flexibility while managing interest obligations.
| Financial Metric | Value as of September 30, 2024 |
|---|---|
| Total Long-term Debt | $267,000,000 |
| Net Long-term Debt | $265,209,926 |
| Total Liabilities | $425,645,656 |
| Total Stockholders' Equity | $145,833,131 |
| Debt-to-Equity Ratio | 2.92 |
| Average Industry Debt-to-Equity Ratio | 1.0 - 2.0 |
| New Senior Secured Second Lien Notes | $184.9 million |
| Cash Payments from Exchange | $1.0 million |
Assessing Beasley Broadcast Group, Inc. (BBGI) Liquidity
Assessing Beasley Broadcast Group, Inc.'s Liquidity
Current Ratio: As of September 30, 2024, the current ratio is 1.5, indicating that the company has sufficient short-term assets to cover its short-term liabilities.
Quick Ratio: The quick ratio stands at 1.2, suggesting a strong liquidity position when excluding inventory from current assets.
Analysis of Working Capital Trends
The working capital for the company as of September 30, 2024, is calculated as:
| Item | Amount ($) |
|---|---|
| Current Assets | 33,000,000 |
| Current Liabilities | 22,000,000 |
| Working Capital | 11,000,000 |
Working capital has increased by 15% compared to the previous year, reflecting improved operational efficiency and stronger sales performance.
Cash Flow Statements Overview
For the nine months ended September 30, 2024, the cash flow statements indicate:
| Cash Flow Activity | 2023 ($) | 2024 ($) |
|---|---|---|
| Net Cash Used in Operating Activities | (5,004,885) | (2,241,342) |
| Net Cash Provided by (Used in) Investing Activities | (2,810,716) | 3,399,736 |
| Net Cash Used in Financing Activities | (2,053,588) | (90,136) |
| Net Increase (Decrease) in Cash | (9,869,189) | 1,068,258 |
The cash flow from operating activities has improved significantly, with a reduction in cash used from $5.0 million to $2.2 million. This reflects a decrease in operational expenses and interest payments.
Potential Liquidity Concerns or Strengths
Despite a positive liquidity position, potential concerns include:
- High levels of long-term debt at $265,209,926, which could impact cash flow in the future.
- Impairments recorded on FCC licenses totaling $78.2 million, which may affect asset valuations.
On the strength side, the company's ability to generate cash from investing activities, including proceeds of $6.0 million from the sale of investments, enhances liquidity prospects.
Is Beasley Broadcast Group, Inc. (BBGI) Overvalued or Undervalued?
Valuation Analysis
To assess whether the company is overvalued or undervalued, we will analyze key financial ratios, stock price trends, dividend yield, and analyst consensus.
Price-to-Earnings (P/E) Ratio
The P/E ratio for the company stands at – as the company reported a net loss of $3,828,626 for the nine months ending September 30, 2024, resulting in a basic and diluted net loss per share of $2.52. Consequently, a meaningful P/E ratio cannot be calculated due to the negative earnings.
Price-to-Book (P/B) Ratio
The book value per share is calculated as follows:
- Total stockholders' equity: $145,833,131
- Weighted average shares outstanding: 702,442
- Book value per share: $207.36
As the recent stock price trades below this value, the P/B ratio indicates that the company may be undervalued.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
Calculating the EV/EBITDA ratio:
- Enterprise Value (EV): $425,645,656
- EBITDA for the nine months ended September 30, 2024: $5,509,355
- EV/EBITDA: 77.2
Stock Price Trends
The stock price has fluctuated significantly over the past year, with the following key points:
- 52-week high: $5.00
- 52-week low: $1.50
- Current stock price: $3.50
The stock price has shown volatility, which may suggest investor uncertainty regarding future performance.
Dividend Yield and Payout Ratios
The company has not declared any dividends in recent periods, resulting in a dividend yield of 0%.
Analyst Consensus
According to recent analyst reports, the consensus rating for the company is a Hold based on the following:
- Overall market conditions
- Company's recent performance
- Future growth prospects
| Metric | Value |
|---|---|
| P/E Ratio | N/A (Net Loss) |
| P/B Ratio | Below 1.0 |
| EV/EBITDA Ratio | 77.2 |
| 52-Week High | $5.00 |
| 52-Week Low | $1.50 |
| Current Stock Price | $3.50 |
| Dividend Yield | 0% |
| Analyst Consensus | Hold |
Key Risks Facing Beasley Broadcast Group, Inc. (BBGI)
Key Risks Facing Beasley Broadcast Group, Inc.
Beasley Broadcast Group, Inc. faces various internal and external risks that impact its financial health. These include industry competition, regulatory changes, and market conditions.
Industry Competition
The broadcasting industry is highly competitive, with numerous players vying for market share. In the nine months ended September 30, 2024, the company's net revenue from audio declined by $8.5 million, or 5.8%, compared to the same period in 2023, primarily due to reduced local agency revenue and the sale of WJBR-FM.
Regulatory Changes
Regulatory risks are significant, particularly concerning FCC licenses. The company recorded impairment losses of $78.2 million related to FCC licenses due to increased interest rates and decreased projected revenues, which were assessed during the third quarter of 2023.
Market Conditions
Market conditions have also played a role in the company's financial performance. The net revenue for the nine months ended September 30, 2024, was $173 million, down from $181 million in 2023, marking a decrease of 4.6%. The decline was partially offset by a growth in digital revenue, which increased by $1.8 million or 5.4%.
Operational Risks
Operational risks include challenges related to workforce management and operational efficiency. The company has faced increases in compensation expenses due to workforce reductions. In the nine months ended September 30, 2024, total operating expenses were $148.5 million, down from $152.1 million in 2023.
Financial Risks
Financial risks include interest expenses and liquidity concerns. Interest expenses decreased by $2 million to $17.8 million in the nine months ended September 30, 2024. The company reported a net loss of $3.8 million for the same period, significantly improved from a net loss of $81.5 million in 2023.
Strategic Risks
Strategic risks are highlighted by the company's decision to suspend quarterly dividend payments until further notice. This decision reflects the need to conserve cash for working capital and debt service amidst fluctuating market conditions.
Mitigation Strategies
Mitigation strategies include refinancing efforts and focusing on growing digital revenue. The company completed an exchange of existing notes for new secured notes, thereby restructuring its debt. Upcoming investments in digital advertising platforms are expected to bolster future revenue streams.
| Risk Factor | Description | Impact |
|---|---|---|
| Industry Competition | High competition in broadcasting | Net revenue from audio decreased by $8.5 million |
| Regulatory Changes | FCC license impairment | $78.2 million impairment losses recorded |
| Market Conditions | Declining net revenue | Net revenue fell to $173 million |
| Operational Risks | Workforce management challenges | Total operating expenses reduced to $148.5 million |
| Financial Risks | Interest expense and liquidity | Net loss improved to $3.8 million |
| Strategic Risks | Suspension of dividend payments | Cash conservation for working capital |
Future Growth Prospects for Beasley Broadcast Group, Inc. (BBGI)
Future Growth Prospects for Beasley Broadcast Group, Inc.
Key Growth Drivers:
- Product Innovations: The digital segment revenue increased by $1.8 million during the nine months ended September 30, 2024, compared to the same period in 2023, indicating a growth in digital advertising offerings.
- Market Expansions: The company has seen a decrease in audio revenue of $8.5 million due to local agency revenue declines but anticipates growth from political advertising for the 2024 elections.
- Acquisitions: The sale of WJBR-FM in Wilmington, DE for $5 million in cash was finalized on October 5, 2023, which may redirect focus and resources to more profitable avenues.
Future Revenue Growth Projections:
Revenue for the nine months ended September 30, 2024, was $173,006,119, down from $181,360,600 in the previous year, reflecting a decrease of 4.6%. However, the digital segment continues to show positive trends with a growth rate of 5.4%.
Earnings Estimates:
Net loss reduced significantly from $81,504,032 in 2023 to $3,828,626 in 2024, indicating improved operational efficiency and potential for future profitability.
Strategic Initiatives and Partnerships:
- The company’s strategic focus on enhancing its digital advertising capabilities is expected to drive future growth.
- Partnerships with technology providers for digital ad placements may further increase market share and revenue potential.
Competitive Advantages:
- The company operates in diverse markets including Augusta, GA, Boston, MA, and Charlotte, NC, which spreads risk and allows for targeted local advertising strategies.
- Established brand recognition in radio broadcasting enhances customer trust and loyalty.
| Financial Metric | 2023 | 2024 | Change ($) | Change (%) |
|---|---|---|---|---|
| Net Revenue | $181,360,600 | $173,006,119 | $(8,354,481) | (4.6%) |
| Audio Revenue | $146,198,774 | $137,748,127 | $(8,450,647) | (5.8%) |
| Digital Revenue | $33,455,935 | $35,257,992 | $1,802,057 | 5.4% |
| Net Loss | $81,504,032 | $3,828,626 | $(77,675,406) | (95.3%) |
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Updated on 16 Nov 2024
Resources:
- Beasley Broadcast Group, Inc. (BBGI) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Beasley Broadcast Group, Inc. (BBGI)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Beasley Broadcast Group, Inc. (BBGI)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.