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Cuts at Beasley Detroit

Discussion pertaining to Detroit, Ann Arbor, Port Huron, and SW Ontario
non-anon bob
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Re: Cuts at Beasley Detroit

Post by non-anon bob » Thu Jan 02, 2020 11:17 am

Donielle Flynn is hosting the CSX midday shift today. Don't know if she's been given the full-time shift permanently. Best of Luck to her!


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Re: Cuts at Beasley Detroit

Post by CK-722 » Thu Jan 02, 2020 1:47 pm

What station was Anne Carlini on in Flint? Was it WCZN/WLQB or WWCK? It was before WWMN, where Linda Lanci, Stacey DuFord, etc. worked. According to a short term coworker, she left 3217 Lapeer Rd. in 1977. Did she then go to WCWA and/or WIOT Toledo with coowned Reams Broadcasting?


Is THAT where they got the idea for the 486-SX?

Same (x, y, z), different (t)

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Ben Zonia
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Re: Cuts at Beasley Detroit

Post by Ben Zonia » Thu Jan 02, 2020 2:31 pm

Non competes can be absolutely ridiculous. Since Canadian stations and US translators and IBOC have all but blotted out nearby FM stations, and AM is buzzed out by electrical interference, even Terry Knapp/Terry Knight, Bob Burchett/Robert R. Morgan, etc. alternate names are unnecessary. I talked to a onetime owner of stations recently who had to agree to a 600 mile radius noncompete agreement when he sold his stations. No doubt these are often drawn up by lawyers who don't understand radio, but come on!


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audiophile
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Re: Cuts at Beasley Detroit

Post by audiophile » Wed Apr 01, 2020 6:31 am

MWmetalhead wrote:
Wed Jan 01, 2020 6:37 pm
On the surface, Beasley doesn't appear to be in terrible financial shape. 95% of their long term debt is not scheduled to mature until 2023 and operating profit margins YTD in 2019 appear to be a bit better than the same period last year.

The problem is this - the Company's First Lien Leverage Ratio covenant under its Credit Agreement with its lender syndicate tightens from 5.75x (in effect thru 12-31-19) to 5.25x effective 3-31-20. Commercial banks generally like First LIen Leverage to be no greater than 3.5x, but because radio is a declining business that was given far too much debt financing in the 2000s, in most cases commercial lenders have no choice but to grant unusually lenient financial ratio covenants.

Beasley is very coy about where its First Lien Leverage Ratio actually stands. I see zero reference to EBITDA or Adjusted EBITDA in the company's Form 10K and Form 10Q filings. The coyness suggests they are worried about lack of covenant headroom.

My back-of-envelope calculation, assuming unrestricted cash is allowed to be netted against 1st lien debt for ratio determination purposes, is somewhere around ~5.75x (imagine that!) based on YTD 9-30-19 performance. This leaves virtually NO wiggle room relative to the 5.75x covenant test at YE 2019. That said, the Credit Agreement probably allows some bullshit non-GAAP add backs that make the actual covenant measurement better, probably closer to 5.25x. Still, that leaves very little comfort when one considers the fact the covenant will, in fact, tighten to 5.25x upon issuance of 3-31-20's financial statements.

$13.5 million for WDMK and the Praise Network may or may not have been a reasonable price depending on tower lease arrangements, programming covenants, and a number of other things. The company financed $10 million of that purchase price with Revolver borrowings. At best, this was a Leverage Ratio neutral acquisition, as I doubt unlevered cash flow is much more than $2 million a year from those assets.

Beasley's stock is priced at $3 per share and has a 6% dividend yield. As long as Beasley remains in covenant compliance, shareholders are in decent shape. However, if Beasley trips its First Lien Leverage Ratio covenant, the first thing Lenders will probably require is suspension of shareholder dividends. That bad news would likely cause the share price to tumble. The next thing they'll require is increased pricing, either in the form of an increased interest rate, an amendment fee, or both. The final thing they'll require is greater restrictions with respect to permitted investments.

Unlevered cash flow does look better YTD in 2019 than in 2018. If cash flows were to remain stable into perpetuity, the senior secured lenders could probably expect full repayment within ten years. However, radio is a declining industry. A ten year repayment horizon is unappealing based on "status quo" cash flows.

Could Beasley elect Bankruptcy? It's a possibility that cannot be ruled out. However, their long-term debt situation isn't as severe as that of Cumulus or iFart pre-bankruptcy. I think it's much more likely that Beasley and their Lenders (virtually all of which already share in 1st liens against Beasley's assets) will come to an agreement to modify the existing Credit Agreement out of court.

What does this all mean?
1. Don't automatically expect Beasley's dividend to shareholders to continue over the long-term. It's an iffy proposition at best.
2. Expect additional Beasley expense cuts.
3. Will lenders push Beasley to sell its ownership stake in Quu, Inc. or Renegade Esports? Who the hell knows. (Lenders might actually like these ventures.)
4. Expect a modification to Beasley's existing Credit Agreement at some point in early 2020, unless political ad revenue gives cash flow a quick boost (which is certainly possible).
5. Do not expect any further radio station acquisitions by Beasley that involve usage of cash on hand or incurrence of new debt. Funding any such acquisition via a new equity issuance also seems like a stretch at this point.

If Beasley is able to keep the status quo Credit Agreement terms in place thanks to improving cash flows or if Lenders agree to loosen the First Lien Leverage Ratio without mandating reduced dividend payments to shareholders, we might actually see a share price rally in 2020.

In the meantime, look for additional waves of expense reductions at Beasley radio stations across the country.
MW we need a refresh on your opinion now...

They fired 67 employees nationwide... Plus 18 laid off.

I understand some layoffs, but 67 fired? I guess Carolyn B. believes never let a crisis go waste.

The company announced that 67 positions across the company have been eliminated. Another 18 full-timers and part-timers were furloughed and all remaining full-time employees will have their hours reduced from 40 to 36.


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MWmetalhead
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Re: Cuts at Beasley Detroit

Post by MWmetalhead » Wed Apr 01, 2020 7:01 am

There have been no SEC filings since February 21.

All I know is the Company was in compliance with its First Lien Leverage Ratio limit of 5.75x at YE 2019. The limit with which they must comply is 5.25x for March 31, 2020 (measured on a trailing four quarters basis).

The Company refuses to show the results of the the calculation in its SEC filings, which suggests to me they are dangerously close to a breach.

I have no idea if the First Lien Leverage Ratio calculation permits pro forma expense savings to be layered in. If the answer is "yes," that could indeed be the primary reason for the firings that were just announced. Another reason may be to simply preserve liquidity. Even if ads run, I suspect delinquency issues on outstanding accounts receivable will become a major problem.

With bricks & mortar shopping - especially car shopping - in the toilet and the primary election season ending a little earlier than some likely expected, unquestionably many if not all publicly traded radio companies will miss original forecast guidance for 2020. In some cases, the results will be ugly.

Plenty of companies are doing "defensive" draws on their lines of credit to hoard cash. Kohls and Macy's each just drew $1 billion. They are doing so to ensure a funding source exists for negative cash flow. When March 31 financial results are released, some companies may be in financial covenant default. When June 30 financial results are released, I bet a long list of companies will be in financial covenant default, unless they reach deals with their creditors beforehand to modify financial covenants. If you are in default, you cannot draw.

https://www.barrons.com/articles/compan ... 1584039814


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senpaisai
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Re: Cuts at Beasley Detroit

Post by senpaisai » Fri Apr 24, 2020 3:30 pm

Beasley snapped up Erickson on weekends but drops Carlini ...

One Anne was cheaper than the other, me thinks ...



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Re: Cuts at Beasley Detroit

Post by windsor » Fri Apr 24, 2020 5:05 pm

Donielle Flynn used to work at 102.7 the Bear when Uncle Ted was there.

Her and him got into quite the pissing match one morn. during a segway to her air shift. :lol


WLLZ needs to bring Sreaming Scott to Morning's on 106.7

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MWmetalhead
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Re: Cuts at Beasley Detroit

Post by MWmetalhead » Tue Jun 09, 2020 7:34 pm

Erin Vermeulen is on the way out at WCSX. Her contract is not being renewed. I guess being a female co-host in morning drive at WCSX = job unsecurity.

My guess is Donielle Flynn will step into the morning co-host chair, and potentially, will be asked to still handle a portion of the midday shift.

I just hope this means we aren't treated to more of that talentless jackass, Dahmer, in afternoons. :barf

It took forever, but Beasley finally is on the verge of tripping its First Lien Leverage Ratio financial covenant. The company expects to be in violation upon issuance of its June 30, 2020 financial statements.

Several things could happen moving forward:
- First Lien lenders (basically, a syndicate of commercial banks) could agree to waive the violation or loosen the covenant before the violation is even reported, or
- First lien lenders could grant what is known as a Forbearance Agreement, which means the default isn't waived but the lenders will abstain from enforcement of rights (i.e. foreclosure, sweeping of cash on deposit, or other collateral enforcement actions) to provide time for the company to develop a restructuring strategy, or
- No relief is granted and the Company files Chapter 11.

Shareholders can kiss their dividend "bye bye."

Shares of BBGI, remarkably, have rebounded 100% from their COVID-19 low point and were nearly flat today, but still are well below their February highpoint of ~$4 per share.


Rock 95.5 in Chicago is the worst sounding major market rock station in the history of corporate radio.

Mega Hertz
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Re: Cuts at Beasley Detroit

Post by Mega Hertz » Wed Jun 10, 2020 9:06 pm

Pull the same thing JJ and Joanne have at OMC.


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non-anon bob
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Re: Cuts at Beasley Detroit

Post by non-anon bob » Thu Jun 18, 2020 8:11 am

If the cheapskates at Beasley keep chopping jobs, they'll get rid of Producer Ryan too. At that point, Big Jim's House will become "Jim's Tiki Hut!"


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Re: Cuts at Beasley Detroit

Post by Deleted User 15342 » Thu Jun 18, 2020 8:16 am

The personalities at 94.7 are boring. Big Jim puts me to sleep and the afternoon and evening guys suck. But yet this station gets good numbers go figure.



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Re: Cuts at Beasley Detroit

Post by MWmetalhead » Sat Jul 04, 2020 9:44 am

Quietly on June 30, Beasley and a syndicate of lenders led by U.S. Bank quietly executed a Second Amendment to Credit Agreement:
On June 30, 2020, Beasley Mezzanine Holdings, LLC (the “Borrower”), a wholly owned subsidiary of Beasley Broadcast Group, Inc. (the “Company”), entered into Amendment No. 2 to Credit Agreement (the “Amendment”), which amends the Credit Agreement, dated as of November 17, 2017, by and among the Company, the Borrower, the other guarantors party thereto, U.S. Bank, National Association (“U.S. Bank”), as administrative agent and collateral agent, and the other lenders party thereto (as previously amended, the “Credit Agreement”).

The Amendment modifies the Credit Agreement to, among other things:
(i) increase the interest rate applicable to the term loans and revolving credit facility by 25 basis points per annum,
(ii) add fees of 300 basis points payable on December 31, 2021 and 150 basis points payable on December 31, 2022, if the credit agreement is not refinanced prior to such time,
(iii) impose additional reporting requirements,
(iv) revise the Excess Cash Flow prepayment requirement such that when the Total Leverage Ratio is greater than 4.5x, 75% of Excess Cash Flow must be prepaid, with such prepayment amounts stepping down to 50%, 25% and 0% upon achievement of certain Total Leverage Ratio milestones, and
(v) reduce the flexibility to incur certain additional indebtedness, liens and investments and make certain restricted payments, subject to the achievement of certain leverage based milestones.

Additionally, the Amendment modified the financial covenant to remove the (existing) maximum First Lien Leverage Ratio previously tested quarterly through the fiscal quarter ended March 31, 2020. In its place, the Amendment added:
(i) a minimum liquidity covenant of $8.5 million, which will be tested every other week until the Total Leverage Ratio is less than 5.0x,
(ii) a minimum EBITDA covenant, which will be tested monthly beginning October 31, 2020 through June 30, 2021 and
(iii) a (new) maximum First Lien Leverage Ratio covenant, which will be tested quarterly beginning with the fiscal quarter ending September 30, 2021.

The Amendment also modifies the definition of Consolidated EBITDA to remove certain add-backs with respect to the calculation of Consolidated EBITDA and EBITDA for financial covenants and other similar calculations and reduces the amount of cash that can be netted for the calculation of the First Lien Leverage Ratio for purposes of testing the First Lien Leverage Ratio financial covenant, when applicable.

Also, as a condition to entering into the Amendment, George Beasley, the Company’s Chairman, provided a $5 million loan to the Company that will accrue payment-in-kind interest at 6% per annum with no cash payments due until the loan’s maturity in December 2023. Mr. Beasley and GGB Family Limited Partnership will also each enter into standby letters of credit in combined aggregate face amount of $5 million in favor of U.S. Bank for the benefit of the Company as a source of backup liquidity that may be drawn by U.S. Bank in the event that the Company fails to maintain the Minimum Liquidity Amount.

This description of the Amendment does not purport to be complete and is subject in all respects to the full text of the Amendment, filed with this Current Report on Form 8-K as Exhibit 10.1 and incorporated herein by reference.
The full Amendment No. 2 to Credit Agreement can be read here:
https://www.sec.gov/Archives/edgar/data ... dex101.htm

A review of Section 7.06 reveals the following with regard to payment of dividends on common shares (I've removed the redline against the prior Conforming Credit Agreement to only display the provision as it now reads):

On and after the Amendment No. 2 Effective Date, so long as no Event of Default shall have occurred and be continuing or would result therefrom and after giving effect to such Restricted Payments the Borrower is in pro forma compliance with Section 7.10 as then in effect, the Borrower may make regularly scheduled common stock dividends or distributions; provided that the aggregate amount of such dividends or distributions under this Section 7.06(k) shall not exceed in any fiscal year (x) if on a Pro Forma Basis giving effect thereto as if such Restricted Payment had been made at the beginning of the Test Period most recently-ended and recomputed as of the last day of the most recently ended fiscal quarter of Holdings for which financial statements required by Section 6.01(a) or (b) have been delivered, (x) the Total Leverage Ratio is greater than 4.0:1.00, $0 and (y) otherwise the Total Leverage Ratio is less than or equal to 4.00:1.00, $7,500,000.

The above legal speak means the Company is currently barred from paying any dividends on its common stock, until such time the ratio of Total Leverage (i.e. Net Debt to EBITDA) falls below 4.0x.

So, my prediction that common shareholder dividend payments would be going "bye-bye" is 100% confirmed.

The Company's leverage ratio currently sits between 5.0x and 6.0x, so they have quite a bit of work to do on improving the bottom line (at least the EBITDA line) before common dividend payments to shareholders resume.

The stock price hasn't dipped much if at all over the past week, so the current share price must already have baked in the likelihood of dividend payments being terminated for the foreseeable future.


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Re: Cuts at Beasley Detroit

Post by MWmetalhead » Sat Jul 04, 2020 9:57 am

Here are the new financial covenant requirements:

First Lien Leverage Ratio permitted limits
September 30, 2021 through December 31, 2021: 6.50:1.00
March 31, 2022: 6.00:1.00
June 30, 2022: 5.75:1.00
September 30, 2022: 5.25:1.00

Minimum EBITDA
Test Period Ending October 31, 2020: $5,920,000
November 30, 2020: $4,560,000
December 31, 2020: $2,240,000
January 31, 2021: ($575,000)
February 28, 2021: $1,700,000
March 31, 20201: $340,000
April 30, 2021: $1,537,000
May 31, 2021: $1,827,000
June 30, 2021: $330,000

MW's remarks: The above covenant levels are truly bizarre!!! Each of the above test points is measured on a trailing four quarters basis, and as you can see, there is big variability in covenant levels one month to the next, even though only the oldest month is being dropped (vs. prior calculation) and one new month is being added. I can only guess that these covenant levels are tied to budgeted figures - after providing a headroom variance of some sort - furnished by BBGI to U.S. Bank.

Minimum Liquidity
Commencing with the Amendment No. 2 Effective Date until the date on which the Total Leverage Ratio for any Test Period is less than 5.00:1.00, as of the last Business Day of each of the second and fourth calendar weeks of each calendar month (each, a “Minimum Liquidity Test Date”), Holdings, the Borrower and their Restricted Subsidiaries shall maintain minimum Liquidity of not less than $8,500,000.


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Re: Cuts at Beasley Detroit

Post by Mega Hertz » Sat Jul 04, 2020 10:07 am

MW... I'm gonna need that in English, bud. What's the end result and what's it mean for the company moving forward?


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Re: Cuts at Beasley Detroit

Post by Deleted User 15342 » Sat Jul 04, 2020 10:12 am

Mega Hertz wrote:
Sat Jul 04, 2020 10:07 am
MW... I'm gonna need that in English, bud. What's the end result and what's it mean for the company moving forward?
I agree, I’m stupid when it comes to all this financial stuff.



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