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Operator: Good morning, and welcome to Beasley Broadcast Group First Quarter 2026 Earnings 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 report 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 on the company’s website.

I would also remind listeners that following its completion, a replay of today’s call can be accessed for 5 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 section of the site. At this time, I would like to turn the conference over to your host, Beasley Broadcast Group’s CEO, Caroline Beasley.

Caroline Beasley: Good morning, everyone, and thank you for joining us. I want to begin by grounding this conversation and how we are thinking about Beasley over the long term. Our strategy is centered on 3 clear objectives: number one, stabilizing and rebuilding our core revenue base, particularly in local direct; number two, scaling a higher-margin, more controllable digital business; and three, strengthening our balance sheet through disciplined deleveraging. Everything we are doing operationally and financially is aligned to these priorities. This is not about short-term fixes, but rather about building a more resilient business with a higher quality earnings profile over time. With that context, I want to spend a few minutes on the most important development since our last call, which is the progress we’ve made on our capital structure and liquidity.

Over the past several months, we’ve taken meaningful and deliberate steps to improve our financial position. During the quarter, we completed the sale of our Fort Myers assets, generating approximately $18 million of proceeds following the prior sale of WPBB for approximately $8 million last year. On May 1, we executed a comprehensive second lien restructuring, exchanging approximately $184 million of existing notes into approximately $98 million of new PIK notes. In addition, we repurchased approximately $16 million of first lien notes and entered into a new $35 million asset-based credit facility. These actions are foundational. The second lien restructuring meaningfully reduces our near-term interest burden and provides greater flexibility as we continue to execute the business.

The repurchase of first lien notes reflects our commitment to reducing debt and the ABL provides us with working capital flexibility and liquidity support, allowing us to manage through near-term volatility while maintaining focus on execution. Importantly, we view these actions as the beginning of a broader deleveraging strategy, not the end. As we look ahead to the remainder of ’26, our approach is anchored in 3 areas. First, we’re focused on expanding EBITDA through revenue recovery, digital growth and improved margin conversion. Second, we will continue to evaluate portfolio optimization opportunities, including potential asset sales or other strategic transactions. And third, we remain disciplined in our liquidity and capital allocation decisions with a clear focus on continuing to deleverage over time.

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Our objective is straightforward: to strengthen the balance sheet while improving the underlying earnings power of the business. Now turning briefly to the quarter. Q1 reflects a business that is in transition. We delivered $41.3 million (sic) [ $42.6 million ] of revenue, down 6.7% year-over-year, SOI of $1.7 million (sic) [ $7.7 million ] and adjusted EBITDA of $600,000 (sic) [ $400,000 ], all on a same-station basis. These results reflect continued pressure in legacy revenue streams, particularly local and national agency as well as uneven pace of recovery across our markets. At the same time, there are important positive signs. Digital continues to scale, increasing 18% in first quarter on a same-station basis. Our cost structure is meaningfully improved, and we are seeing clear evidence that where digital is working, revenue stabilizes, such as in our Tampa and Boston clusters.

And with that, I’ll turn it over to Kevin to address revenue and operations.

Kevin LeGrett: Thank you, Caroline. I’ll start with a simple observation. The quarter was challenging, but it was also clarifying. We now have a very clear understanding of where the business is performing, where it is underperforming and what needs to change. 12 weeks into my tenure at Beasley Media, my message to this group is direct. This is a portfolio in transition with identifiable, fixable problems, not a structural failure of the business. We have mobilized a market-by-market intervention plan and have clear performance fruits, as Caroline pointed out, in the Tampa and Boston markets where we are executing with urgency, delivering budgets and market share growth. What we are managing today is not a single issue across the company, but rather a portfolio with different operating dynamics.

That distinction matters because it means the solution is not a broad one-size-fits-all approach. It requires targeted execution and market-specific strategies. At the center of our strategy is a very simple focus. We are laser-focused on helping our clients achieve their advertising and marketing goals. What we consistently see is that the best outcomes are delivered when our digital and audio products are used together. When deployed in tandem, they maximize reach, improve engagement and frequency and ultimately drive a more efficient return on advertising spend. This is not theoretical. It shows up in campaign performance and in client retention. As a result, we are intentionally shifting toward integrated bundled solutions and outcome-based selling.

This represents a meaningful evolution of how we go to market. Digital remains the most important growth driver in the business. But just as important as growth is the quality of that growth. We are prioritizing owned and operated products, direct client relationships and higher-value solutions while deliberately moving away from lower-margin revenue streams. This shift positions us for stronger margin conversion over time. We are also operating with a clear benchmark. At the market level, we believe digital should represent at least 35% of our total revenue. Across the enterprise, we’re not there yet, but we’re making steady progress and remain confident in that trajectory. In parallel, we have implemented a much more disciplined operating framework across the organization.

This includes full CRM adoption, weekly revenue committee reviews and standardized pipeline visibility. This allows us to manage the business with greater and more significant precision, particularly around pipeline health, sales velocity and conversion rates. New business remains a key area of focus. We are addressing this by strengthening our market leadership, adding hunter-focused sales talent, leveraging AI tools in prospecting and across the sales funnel in addition to implementing more structured onboarding and training programs. These actions are designed to rebuild the revenue base in a sustainable way. At a broader level, we are transforming how we go to market. We are moving from an inventory-based selling model to an outcome-based model that emphasizes integrated campaigns, measurable performance and deeper alignment with client objectives.

I do want to be transparent on cadence. We did not see the level of revenue improvement in April that we would have liked, and we expect near-term conditions to remain challenging. Beasley operates in markets where mainstream advertisers, local automotive, health care, home services and restaurants are absorbing real economic pressure generated from the macroeconomic challenges and geopolitical disruptions. Our focus of controlling what we can control, local direct selling, attribution-led ROI proof and integrated bundles is a purpose built for this environment. We are building repeatable operating discipline and manage against leading indicators that drive long-term performance. These are the inputs that when consistently executed across all markets in over 12 months, produce the outcomes this group cares about, sustainable revenue growth, margin expansion and EBITDA recovery.

12 weeks in, my conviction is stronger than the day I walked in. This is a turnaround business, but it is a turnaround business with a clear playbook, real proof points and operational discipline to execute. In the core, scaling what works and holding every leadership team accountable to data-driven discipline. And with that, I’ll turn it over to Ilana to go through a deeper look at our numbers.

Ilana Goldstein: Thanks, Kevin. For the first quarter, net revenue was $41.3 million (sic) [ $46.2 million ], down 13% year-over-year. Total expenses, including $42.6 million in operating expenses and $3.5 million in corporate expenses were $45.7 million, down roughly 7% or $3.6 million versus prior year period, and SOI was $418,000 compared to $3.7 million in the same period last year. From a segment perspective, local revenue remained the largest component of the business and continues to be the primary driver of overall performance. Local trends were mixed with resilience in service-based categories, offset by weakness in discretionary and agency influence spend. Importantly, we are seeing divergence at the market level where markets with stronger digital adoption and a higher mix of local direct revenue are demonstrating greater stability relative to those with heavier exposure to national and agency-driven demand.

National revenue declined year-over-year, totaling approximately $5.1 million in the quarter compared to $6.6 million in the prior year period, reflecting continued pressure in national advertising budgets. While still down, we are beginning to see early signs of stabilization in national pacing, including political revenue of $108,000 for the quarter. Digital revenue continues to be the most important area of growth and strategic focus. Total digital revenue was approximately $10.7 million in the quarter, representing over 25% of total company revenue. Within that, we continue to see a meaningful shift in mix towards higher-quality revenue streams. Owned and operated digital grew approximately 26% year-over-year, while lower-margin third-party programmatic revenue declined.

This mix shift is intentional and reflects our focus on building a more durable, higher-margin digital business over time. O&O now accounts for roughly 65% of our total digital revenue, representing a shift from prior year period of 49% of total digital revenue. From a market perspective, digital performance remains uneven but directionally encouraging. As Kevin mentioned, Tampa and Boston continue to lead in digital adoption and momentum with strong performance in O&O products. More broadly, markets with stronger digital penetration are demonstrating greater revenue stability, reinforcing the role of digital and offsetting legacy declines. Digital is no longer just a growth driver. It is the foundation for stabilizing and rebuilding the earnings profile of the business.

Overall, the category and segment performance in the quarter reinforces 2 key points. First, advertiser demand is still present, particularly in local service-based categories where ROI and attribution are clear. Second, the composition of our revenue is evolving with digital and specifically higher-margin O&O digital products becoming an increasingly important driver of both growth and long-term profitability. Continuing with category performance, we saw strength in several areas. Consumer services was one of the largest contributors to growth in the quarter, increasing approximately $1.7 million or 13.8% year-over-year. We also saw continued strength in categories such as legal and health care. Home improvement and construction-related categories also performed exceptionally well with increases of nearly $2 million combined.

These categories continue to benefit from local demand and align well with our strategy of focusing on direct advertisers. Offsetting this strength, we experienced declines in several more discretionary and nationally driven categories. Entertainment declined approximately $2 million year-over-year, while gaming was down approximately $1.4 million. Automotive, which remains an important category for the industry, also declined roughly $1 million. We also saw pressure in restaurant, food and certain retail-related categories, reflecting broader macroeconomic caution and reduced spend for national and agency-driven advertisers. On the expense side, we have made meaningful progress on cost discipline over the past 18 months. However, Q1 expenses were elevated relative to the plan, driven by higher selling expenses, hard costs, promotional spending, bad debt and increase in software and contract services.

Station operating income was $418,000 for the quarter, as previously mentioned, down from $3.7 million in the prior year period. The decline in SOI was largely driven by our declines in revenue, although partially offset by the aforementioned expense cut that occurred throughout ’25. Adjusted for $150,000 in severance and roughly $10,000 in stock-based compensation, SOI would have been $560,000 for the quarter. Corporate expenses were $3.5 million for the quarter, down from $4 million in the prior year period. However, this includes over $700,000 in nonrecurring fees related to our restructuring and asset sales. So excluding that, corporate expenses would have been $2.8 million. Adjusted EBITDA for the quarter was approximately negative $375,000 compared to $1.1 million in the prior year quarter.

The decline was primarily driven by lower revenue, partially offset by structural cost reductions implemented over the past 18 months. Below the EBITDA line, cash interest expense for the quarter was approximately $3.3 million, relatively flat versus the prior year period. Total capital expenditures for the quarter were $700,000. Turning to the balance sheet. We ended the quarter with approximately $218 million of total debt after paying down nearly $15 million in debt from the proceeds of our Fort Myers transaction, and we ended the quarter with approximately $16.4 million (sic) [ $6.4 million ] in cash. As we have discussed, addressing our capital structure has been a central focus for the company. Our debt profile has changed meaningfully since the close of the quarter in result of our restructuring on May 1, as Caroline mentioned earlier.

As we look ahead, our financial priorities are closely aligned with our operating strategy. At a high level, our guiding principle is simple. Revenue growth must translate into SOI improvement. That is the standard we are holding the organization to. With that, I’ll turn it back to Caroline.

Caroline Beasley: Thank you, Ilana. So to summarize, while the traditional business is in transition, the direction is clear. The digital strategy is working. The cost structure is meaningfully improved and the balance sheet is stronger today than it was at the beginning of the year. What we are focused on now is execution consistency and ensuring that the progress we’re seeing in parts of the portfolio become repeatable across the entire company. Before I close, I want to briefly address near-term pacing. And based on what we are seeing today, we expect second quarter revenue to be down in the mid- to high single digits on a same-station basis. April ended the month down approximately 2% after entering the month down 10%, which shows significant end-month adds.

May and June are currently pacing consistent as to how we entered April. That outlook reflects continued pressure on both a macro and micro level. And on the macro level, consumers are feeling the strain of high gas and food prices and general concern in overall economic conditions impacting both national and local revenue. In addition, internally and on a micro level, the operational changes we’ve implemented will take time to fully translate into revenue and SOI. We view this as a timing dynamic, not a change in trajectory. The leading indicators in the business, including digital mix, pipeline visibility and the sales process discipline are moving in the right direction. As those continue to build, we expect to see improved revenue stability and importantly, better conversion into profitability.

We’re equally focused on diligently managing our capital structure. The actions we’ve taken on the balance sheet, including the second lien restructuring, first lien repurchases and the establishment of the ABL have materially improved our liquidity profile. We’re managing the business with a clear focus on liquidity, cash generation and cost control, and we believe we are appropriately positioned to navigate the current environment while continuing to execute our plan. We’re focused on 3 things: first, continuing to improve EBITDA through a combination of revenue stabilization, digital growth and stronger margin conversion. While the revenue environment is seeing early signs of stabilization, we continue to take decisive actions to align our cost structure with current market conditions and improve long-term profitability.

In early May, we executed additional expense reduction initiatives including an early retirement offering that is expected to generate nearly $2 million in annualized savings. In addition, we implemented approximately $5 million in further annualized cost reduction focused on streamlining operations, reducing overhead and improving organizational efficiency. These actions build on the broader cost optimization efforts we’ve already undertaken over the past year and reflect our continued commitment to disciplined expense management and cash flow improvement. Second, we’re actively evaluating additional liability management opportunities, including further debt reduction as well as potential refinancings over time as the business stabilizes. And third, we’re maintaining flexibility through portfolio optimization where selective asset sales or strategic transactions can accelerate deleveraging and strengthen the overall capital structure.

Importantly, we are approaching this from a position of control. We’re not reliant on a single action or outcome. We have multiple levers available to us, and we are prioritizing those that create the most durable long-term value. And as we move through 2026, we would encourage you to focus on 4 key areas within our company: one, continued growth in digital revenue and mix; number two, improvement in local direct sales execution; number three, stronger conversion from revenue to SOI; and number four, ongoing progress on deleveraging. This is a transformation that is a controlled, data-driven transformation with clear proof points and a defined path forward. So I’d like to thank you all for your time today, and we did not receive any questions.

So with that, if you have any follow-up questions, please feel free to reach out to any of us on the call today. Thank you very much.

Operator: Once again, ladies and gentlemen, that does conclude today’s conference. Thank you for your participation. You may now disconnect.

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