Good morning and welcome to Beasley Broadcast Group's First Quarter 2018 Conference Call.

Before proceeding, I would like to emphasize that today's conference call and webcast will contain forward-looking statements about our future performance and results of operations that involve risks and uncertainties described in the Risk Factors section of our most recent Annual Report on Form 10-K as supplemented by our Quarterly Reports on 10-Q.

Today's webcast will also contain a discussion of certain non-GAAP financial measures within the meaning of Item 10 of Regulation S-K.

A reconciliation of these non-GAAP measures with their most directly comparable financial measures calculated and presented in accordance with GAAP can be found in this morning's news announcement and on the company's website.

I would also like to remind listeners that following its completion, a replay of today's call can be accessed for five days on the Company's website www.bbgi.com.You can also find a copy of today's press release on the Investors or Press Room sections of the site.

At this time, I would like to turn the conference over to your host, Beasley Broadcast Group's CEO, Caroline Beasley. Please go ahead..

Thank you, Don, and good morning, everyone. Thank you for joining us for our 2018 first quarter operating results. Marie Tedesco, our CFO is with me this morning.

First I am happy, and I am sure you are that our reporting and comparison presentations are a lot easier in Q1, as we lapped the acquisitions and divestiture transactions completed in late '16 and early '17.

As discussed on our previous call and given our focus on growing free cash flow, we are reporting actual results as at the end of the day we believe investors like us are more interested in our ability to grow free cash flow over the long term and that is where we are devoting our energy.

However, the 2018 first quarter includes the December 2017 Boston asset swaps, where we exchanged Magic for the Sports Hub. With this transaction we secured the radio broadcast rates for the markets permanent sports teams such as the New England Patriots' and the Boston Bruins.

The addition of this great sticky programming further diversified our market revenue from a music formatted clusters to one with marquee content that is unique and features some of the most popular sports franchises in the country.

As you would expect, it was a busy quarter with the Patriots and Super Bowl which contributed to the first quarter's revenue growth. In fact we also saw a Super Bowl revenue benefit at our Philly sports station [WPEN] even though we gotten hold the broadcast rights.

On the foot side we experienced some ad placement slow in our Northeast markets due to several major storms in the first quarter as businesses and schools were closed and people were asked to stay home. Looking at the first quarter, we generated a 2.6% increase in revenue.

This is primarily a result of the Boston station swap which was somewhat offset by the divestiture of our Coastal Carolina clusters that was included for the full 2017 first quarter. National revenues also continue to remain challenged across several of our markets which in some cases was offset by our success and driving local revenue.

The overall expense increase was mainly driven by Beasley which was partially offset by the ongoing expense management disciplines we are deploying across our market. First quarter SOI would have been flat when excluding the SOI contribution from the Coastal Carolina market station divestitures from last year's results.

Overall we believe our strategic activity related to the Greater Media transaction and other announced acquisition swaps and divestitures had strengthened our platform.

Moreover we continue to execute well on our immigration strategy focused on strong local programming to support our goals and ratings and market leadership, while implementing our operating and expense management disciplines.

Now before I turn the call over to Marie for a deeper review of the quarter, I’d like to address the covers of the iHeart and Cumulus bankruptcies and what they mean for some of the other operators. Remember that in addition to their difficulties, CBS Radio changed hands by last year and we expect those stations to improve under Intercom ownership.

From our perspective its business as usual on one hand as we continue to be differentiated with great stations, great brands, great local programming and solid ratings with upside from our ongoing integration and synergy realization successes and our leverage is modest and addressable.

On the other hand we have to believe that with the leading company suffering the way that they've had, that it hasn't have an impact on the industry at large.

So we're waiting for these companies to get healthier as we are likely to see an industry where leaders better advocate for their product, its reach and it effectiveness which we hope elevates the value of our inventory and creates a more rationalized market for advertising. So with that I’m going to turn it over to Marie..

Thanks Caroline. Let’s with the review of the first quarter operating results, and then I will review some balance sheet items.

Net revenue increased 2.6% or $1.4 million to $55.2 million and station operating expenses for the quarter rose 3.6% or $1.6 million, resulting in a 1.5% decline in station operating income to $9.6 million compared to $9.8 million in the year ago period.

Again the net revenue and SOIs for the year ago period includes the Coastal Carolina cluster which we sold and WMJX-FM in Boston which was swapped for WBZ-FM. The increase in station operating expenses reflects the Boston asset swap which as a sports station format generally cares higher expenses.

In addition, during the quarter we incurred additional expenses related to the Patriots competing in the Super Bowl. These increases were partially offset by expense reductions at our Tampa, Charlotte, Detroit, Fort Myers and Augusta clusters, as well as the absence of expenses from divested Costal Carolina cluster.

On a category basis, consumer services remained our largest revenue category in first quarter of 2018 and was up high single-digits in the quarter. This was followed by retail which was down low single digit but rebounded somewhat from a tough fourth quarter and then entertainment as third, up mid single digit.

Auto which is typically our third largest category also rebounded from a tough fourth quarter to low to mid single digit decline. We are seeing positive moments in the automotive category primarily in our Boston, Tampa, Las Vegas, and Seattle market.

Corporate G&A expenses increased by 100,000 during the quarter to $3.3 million primarily reflecting our expanded scale and an increase in corporate staff. In addition, non-cash stock based compensation increased 347,000 for the quarter to 465,000 and we paid approximately 200,000 in cash taxes for the quarter.

Total first quarter interest expense decreased approximately $1.2 million year-over-year to $3.6 million reflecting the November 2017 refinancing of our senior debt which reduced our interest rate by 200 basis points.

It also reflects a year-over-year reduction in borrowings as we applied proceeds from the Coastal Carolina divestiture plus cash from operations to voluntarily reduce our borrowings. We ended the quarter with cash on hand of $13.2 million and reflecting the recently completed refinancing of our credit facility and the WBC transaction.

Our total outstanding debt as of March 31, 2018 was $222 million compared to $225 million at December 31, 2017. Our LTM consolidated operating cash flow as defined in the credit agreement was $49.9 million, resulting in a leverage ratio of 4.45 times as of March 31, 2018. This compares to 4.32 as of December 31, 2017.

Our credit agreement allows the company to receive the benefit of up to $20 million of our total cash on hand in calculating net leverage though reflecting our balance sheet cash, net leverage at March 31, 2018 was 4.18 times compared to a maximum leverage covenant of 6.25 and that compares with 4.05 times on the same basis at December 31, 2017.

The company spends $1.2 million in CapEx for the first quarter compared to $1 million in the first quarter of 2017. And with that, I will now turn it back to Caroline..

Thank you, Marie. So the highlight of today's report is our free cash flow growth both in the first quarter and on a trailing 12 month basis. Before the first quarter, our free cash flow rose 79.9%, while on a trailing 12 month basis it increased 27.5%.

This growth highlights the benefits of our recent strategic transactions and expanded scale combined with our initiative to manage the capital structure and reduce borrowing cost and our overall disciplined approach to excess management and the benefits of tax reform.

Our ongoing diversification and commitment to local content, innovation and growth has positioned us to capitalize on the many opportunities to serve listeners and businesses in our market.

With our growing free cash flow profile, we have invested in our broadcast and technology platforms while pursuing selective, accretive acquisitions and station swaps. At the same time, we're effectively managing our capital structure, leverage and returning capital to shareholders.

Our quarterly and trailing 12 month free cash flow growth highlight the efficacy of this approach which we believe is a proven formula for building long term shareholder value. We continue to innovate to enhance the value of our platform for our listeners.

As an example, we are now featuring the total of 124 podcast, we had approximately 3 million downloads in the last 30 days. In addition, our lifeline initiative is already up to 31 enabled podcast. Also we're on track to launch phase two of our mobile apps towards the middle of the year which will create a better experience for our listeners.

Overall, audio consumption is growing and while there is more competition for listeners, radio share remains stable. Radio continues to be the number one reach medium with 93% of the U.S. population tuning in weekly and as a result, we remain confident in our industry and in Beasley's growing broadcast in digital platforms.

As a matter of fact, I'd say that the level of excitement for the industry at last month NAB show was higher than I can remember in years. With two of the industry's biggest operators about to get healthier, we're looking at an industry that is far more aligned than it's been in the past.

NAB is hard at work on several innovated initiative that will allow broadcasters to best serve their communities, strengthening our businesses and capitalize on even more new digital opportunities. Now as of today, Q2 revenue is pacing flat and looking deeper into 2018 we are starting to see a few political buys in some markets.

More specifically on Q2 pacing's, April was up, May is flat currently and June is currently pacing down.

Finally we intend to remain opportunistic about identifying, structuring and completing, additional strategic accretive acquisitions and investment will be ready with the appropriate capital structures and experience while we continue to build our platform.

So on behalf of our Beasley's best team, we'd like to thank you for participating in the call today and I'm going to turn it over to Marie as we have had a few questions that have come in..

Thanks Caroline, and that is correct we've got a few questions here. I'll take care of some of them and I'm going to have Caroline address a few of them. First question that I got, we received at one and about our CapEx outlook.

I did review our CapEx spend for the quarter and our intent is to spend somewhere around $5 million to $6 million in CapEx for the full year of 2018. We also received a question regarding our leverage target, and as we have mentioned before, our leverage target remains to be below four times.

We were also asked about our Super Bowl expenses in Boston from the Patriot and looking at both the Super Bowl and the playoffs, we had approximately between 700,000 and 800,000 in expenses related to those games.

And of course this affected our margin in Boston going into second quarter, we expect that margin to increase until we start entering the football season again.

Another question that we got is - what is our outlook on M&A?.

So Marie I think we just mentioned that in the comments that at a rate we are always on to look out for strategic acquisitions that will be accretive for our shareholders and complementary to our platform.

We would like to see an opportunity with any acquisitions to be able to de-lever quickly and if it’s the right acquisition, we are able to meet this guidelines then we would stretch our leverage to 5 times or lower..

Thank you. And we also received a question to touch on our political revenue expectation in 2018. And we expect our political revenue to be somewhere around $2 million to $3 million which is in line and consistent with prior year and non-election years.

Another question that we got, was to touch a little bit on the comments of the last quarter's ad placement in Boston.

Caroline?.

Yes, so last quarter and the fourth quarter ad placement was pretty much at a stand field because of all the disruption that was going on in the marketplace.

And the question is, where do we see that today? We see today that local is holding its own, national is coming back, it's still day on year-over-year however it is not down as much as it was in first quarter.

And then to follow that on another question was just local versus national trends and I think that that's sustained local versus national as we're seeing in Boston local, pretty much holding its own and National is staying on year-over-year..

And the last question I have was to touch on if we are looking at hedging any of our current senior debts and that is something that we are looking into just to see what our options are. And those are the questions we received..

Okay, well thank you again for participating on the call today. And if you have any questions please feel free to call Marie or myself. All right, bye..

This does conclude today's conference. Thank you for your participation. You may now disconnect..