Good morning and welcome to Beasley Broadcast Group's Fourth Quarter 2020 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 Form 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..

Thank you, Casey. And good morning, everyone. Thank you for joining us to review our 2020 fourth quarter and full year operating results. Marie Tedesco, our CFO, is with me this morning. First, let me provide a quick update on our recent capital market activity and the success we had as a first time issuer in the high yield market.

On February 2, we closed on our oversubscribed $300 million bond offering, which allowed us to terminate our term loan B revolver and all subordinated notes. The bonds were issued at five years with a two year non-call at a coupon of 8.625%.

In addition to allowing Beasley to repay in full all prior indebtedness, the remaining net proceeds of $25 million were added to our balance sheet and can be used for general corporate purposes.

We believe this transaction improves our liquidity profile and provides capital as we continue to diversify our business, revenue and cash flows to higher growth areas.

With respect to Q4, it proved to be a very strong quarter as we generated more than three times the expected political revenue, which helped offset some advertiser hesitation as well as the increased restrictions we experienced in some of our markets beginning in November, which was more pronounced in December, and we are seeing it as we go into 2021 as well.

Overall, we recorded approximately $10.2 million of political revenue in the fourth quarter, with approximately $6.9 million in October. Strong political markets for us were Charlotte, Detroit, Augusta and Fayetteville, with quarterly sequential revenue growth in the third and fourth quarters.

We continue to see improvement in weekly ads with monthly sequential revenue increases in October and November when excluding political. December revenues were down slightly due to one less Patriots game and the just mentioned tightening restrictions in several of our markets.

Despite the pandemic and related restrictions, we generated year-over-year revenue increases in six of our markets, which resulted in overall 4Q revenues down 5%, which is a substantial improvement when comparing to second and third quarters. .

Thanks, Caroline. I will start with a review of the fourth quarter results followed by a review of our balance sheet. Fourth quarter net revenues decreased just 5% or $3.6 million to $68.5 million, which includes $732,000 from our Esports team, the Outlaws and the Renegades.

We generated $10.2 million in net political revenue compared to $500,000 in the prior year. Breaking down the quarter, October increased 9.1% year-over-year, with approximately $6.9 million of political. November was down 8.2%.

And in December, we saw a 15.9% decrease year-over-year, primarily due to one less Patriots game played compared to 2019 as well as tightened restrictions in some of our markets due to COVID-19 surge and second wave in some of those markets.

Despite the headwinds, we grew revenue year-over-year at our Atlanta, Augusta, Detroit, Fayetteville, Tampa and Wilmington clusters. .

Thank you, Marie. To provide further color on fourth quarter revenue, spot revenue, including political, was down just 2.6%, with national increasing 45%, and that does include $10.2 million of net political revenue and local was down 20.6%.

While October political had a significant impact on the quarter, it's important to mention that excluding political, we still saw a sequential increase in both October over September and November over October.

Digital revenue continues to grow and the digital expansion is a priority as the digital direct sales team is laser focused on driving net new digital revenue and targeting to sell of non-radio products to non-radio advertisers.

Esports continues to be a growing and popular facet of our company, given the sports, COVID-proof online play format, and its increasingly massive appeal to younger consumers. Our Esports offerings have enormous appeal to the Gen Y and Gen Z demos who makes up the majority of gamers.

And with respect to our property, the Outlaws ranked as the league's fourth most popular team in terms of fan viewership, social media followers and merchandise sales. And we look forward to building on our first year successes and leveraging our learnings going forward. Now moving on to 2021, first quarter is currently pacing down about 18%.

And breaking that down, January was down 21.5%, with Feb and March pacing down approximately 16% and 15% respectively. We do expect Feb and March pacing to improve as we get further into the month and the quarters, as this has been a consistent trend over the past several months.

And as a reminder, last year's first quarter had a strong start with both Jan and Feb up 7% over 2019 and that was followed by March's decline due to COVID. So, to recap fourth quarter, our 5% decline in revenue is a significant improvement from the 54% decline in second quarter and 25% decline in third quarter.

The revenue improvement combined with the operating expense reduction of $8.1 million allowed us to post positive SOI and positive EBITDA for the quarter. And of special note, our SOI less corporate expense and EBITDA were all greater in fourth quarter of 2020 compared to the same quarter in 2019.

Looking ahead, the first quarter and into 2021, our focus will include growing our free cash flow and maintaining a strong balance sheet with liquidity at the current level or higher. And while we no longer will be under a leverage covenant, reducing our net leverage continues to be a priority.

And we're working towards returning to our pre COVID-19 level of mid-4 times. .

Thank you, Caroline.

And we have received just a couple of questions, with the first one asking to discuss live events and NTR business and when will we see a return to those?.

We're excited about the potential opportunity of live events and NTR returning. This business actually accounted for more than 5% of our revenue pre COVID. However, we do expect this revenue to come back, hopefully, by the end of this year and going into 2022 as the states start opening up and we're able to host events. .

And we were also asked to dive into Esports and review any growth opportunities in this sector. .

Given where we are today, we have great assets across our Esports space. These are complementary Esports assets and they are somewhat COVID proof as we saw last year. We do believe that this space, combined with our traditional assets and learnings, actually allowed us to make lemonade out of lemons last year.

And we look forward to applying some of these same principles in 2021. But that being said, I do want to focus on digital today because that is our focus in 2021. We are looking to attract non-radio clients to generate added revenue.

And as we said in the past, our internal target is to have 20% of our revenue come in from digital and potentially a larger number longer-term. So, with that, thank you. .

Thank you. And that concludes the two questions that we had from this morning. .

All right. Well, thank you very much for your time today. And should you have any questions, please feel free to reach out to Marie or myself. I hope you have a great day. .

Ladies and gentlemen, this concludes today's call. Thank you for your participation and you may now disconnect your phone lines. .