Good morning, and welcome to Beasley Broadcast Group Second Quarter 2023 Conference Call. Now I will turn the call over to your host. Please go ahead.

Thank you, operator. Good morning, everyone. 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. 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 sections of our website. At this time, it's my pleasure to turn the conference over to your host, Beasley Broadcast Group's CEO, Caroline Beasley. Please go ahead, Carolyn.

Thank you, Joe. Good morning, everyone, and thank you for joining us to review our 2023 second quarter operating results. Marie Tedesco, our CFO, is with me this morning. I'm pleased to present yet another successful quarter with significant improvements in both SOI and EBITDA and continued double-digit growth of digital revenue, reflecting our proactive initiatives to reduce expenses and permanently reduce headcount in 2022, we delivered a quarter where expenses were down 4.3% year-over-year, resulting in quarterly SOI growth of 8.5% and EBITDA growth of 16.8%. Overall, revenue decreased 2.1%. And while we saw double-digit increases in both digital, which was up 14.8% and network, which was up 32%. These were offset by softness in both national and local spot advertising. As in recent quarters, National remains challenged and for the quarter was down 11%. There was also softness on the local side with local spot down 3%, and this was a result of a soft local agency market with the local direct market being relatively flat. Looking more closely at the year-over-year comp, second quarter '22 had 2 events in our Tampa market, which did not return in second quarter '23 as well as company-wide political revenue of approximately $513,000 net of agency commission. Excluding those events and political revenue from the previous year, our revenue would have been flat year-over-year. Now moving to the sports betting category. We recorded $3.4 million in the quarter. That's up 9.7% from the prior year, and sports betting represented 5.4% of total revenue for the quarter. Our growth in sports betting came from a surge in spending in Boston, which generated $1.5 million this quarter versus $170,000 in the prior year second quarter. We expect sports betting in Boston to remain strong in both third and fourth quarters as we begin…

Thanks, Carolyn, and good morning, everyone. I will review our second quarter results and provide an update of our balance sheet. Second quarter net revenue decreased 2.1% or $1.3 million to $63.5 million, which includes $700,000 from our esports team. Excluding a political revenue decrease of $490,000 and two, nonrecurring events of $840,000, our revenue would have been flat year-over-year. We generated positive revenue growth in 5 of our markets, including double-digit growth in Wilmington and mid- to high single-digit growth in Boston, Charlotte, Las Vegas and Fort Myers. Digital revenue for the quarter grew 14.8% to $12.3 million and now represent 19.4% of total revenue for the quarter as we continue to grow this revenue stream and diversify our revenue sources. Moving to our revenue category for second quarter. Consumer services remained our largest revenue category at 31% of our total revenue. This category declined [0.5%] year-over-year during the quarter. We have the largest increase coming from legal and the largest decrease coming from medical. Our second largest category was retail, which fell 8.3% year-over-year and accounted for 17% of total revenue. Entertainment number 3 represents around 14% of 2Q total revenue and decreased 1% year-over-year. The entertainment category includes sports betting, which generated $3.4 million for the quarter. Auto, our fourth largest category saw revenues up 7% year-over-year, and the category accounted for 9.1% of total revenue. We saw increases in auto in more than half of our markets, including double-digit growth in Boston and an almost 10% growth in Philadelphia. We have seen improvements in this revenue category and expect that, that will continue to improve throughout the year as there have been reports on inventory levels of millions of vehicles. And sixth spot was Telecom down 7.5%, representing 4.4% of total revenue. Corporate G&A expenses for…

Thank you, Marie. So I'm pleased with our second quarter performance in an environment where we've had some headwinds. We continue to show growth in our digital business, partially offsetting the decline in spot. Our content strategy initiated midyear 2022 helped drive 14.8% growth in our digital revenue for the quarter. So we're very excited about this opportunity as we continue through the balance of '23 and into next year. Notably, our multi-platform local content strategy continued to drive tremendous audience growth in the second quarter, and our owned and operated audience monthly reach is now almost $29 million. That compares to $25 million during the same period in 2022. Again, this is a 14% overall monthly audience increase from last year. Our radio brands continue to maintain dominant positions in Nielsen, where our market share grew by 3% in our large PPM markets with the key demographic of adults 25-54. And we maintained the highest average PPM cluster share when compared to the other major broadcasters. And overall, including both PPM and [indiscernible] markets, our average share grew by 6% year-over-year with adults 25-54. However, like other recent quarters, the largest audience growth was seen on our digital O&O asset with unique users increasing by 62% from Q2 '22 to Q2 '23. This audience growth led to a 59% increase of sellable digital impressions for the same period. Digital now accounts for 44% of our total monthly audience. That's up 2 points from last quarter, and we expect this trend to continue. Now moving on to esports. We now have moved into the second half of the 2023 Overwatch League season, with the team presently ranked number 2 in the world. We now have our eyes set on the October playoffs and grand finals, which will be played October…

Yes, I will do as Carolyn said, we received a few questions that we would like to address. And the first question is, could you give an update on your esports investment?

Sure. So esports, we continue to make progress in this area and building our overall audience and also with a focus on winning price dollars, as I mentioned earlier in the script. However, some of you may have read, there are some questions with [OL] and we are currently looking at all of our options with the Overwatch League, and we should have an update sometime in fourth quarter on this.

Great. Also the next question, could you talk about your refinancing process of your bonds that are coming due in February of 2026. And I will take that. And yes, we are -- we certainly have our eye on this day, and we are hyper focused on continuing to reduce our debt and reduce our leverage. We will be exploring all options regarding our refinance well in advance of our bonds due date. And the last question is, would you consider divesting noncore assets?

Yes. We discussed this last quarter, and that is something that we will consider doing.

Great. All right. Thank you very much for your time today. And should you have any questions, feel free to reach out to either Marie or myself. Hope you all have a great day. Thank you.