BEASLEY BROADCAST GROUP, INC. ITEM 8.01 OTHER EVENTS.
On
Due to circumstances related to the COVID-19 pandemic,
The Company intends to file its Quarterly Report no later than
The effects of the COVID-19 pandemic have limited the ability of the Company's employees to conduct normal business activities, including the preparation and review of the Quarterly Report. In particular, COVID-19 and related precautionary responses have caused limited access to our facilities and disrupted normal interactions among our accounting personnel and other persons involved in the completion of our quarterly review and preparation of the Quarterly Report. These restrictions have slowed the completion of our internal quarterly review, including evaluating the various impacts of COVID-19 on our financial statements and preparing and completing the Quarterly Report in a timely manner.
Additionally, the effects of the COVID-19 pandemic have caused disruptions to
the Company's business and operations, and the related uncertainty as to when or
the manner in which the conditions surrounding the COVID-19 pandemic will
subside have made it necessary for the Company to seek an amendment to its
credit facility that would, among other things, amend certain financial
covenants. For the quarter ended
As a result, the Company is seeking and expects to enter into an amendment to its credit facility in the coming weeks, and projects that it will be in compliance with the financial covenants, as amended, over the next twelve months. If the Company is unable to obtain an amendment to its credit facility, it would result in an event of default thereunder, which would materially affect its results of operations, liquidity and financial condition.
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Additional risk factor disclosure
The Company is supplementing the risk factors previously disclosed under Part I,
Item 1A, "Risk Factors" of its annual report on Form 10-K for the year ended
We face risks related to health epidemics, natural disasters and other catastrophes, which have materially and adversely affected our results of operations, liquidity and financial condition.
We are subject to social and natural catastrophic events that are beyond our control, such as health epidemics, natural disasters and other catastrophes, which have materially and adversely affected our business and may continue to materially and adversely affect our results of operations, liquidity and financial condition.
In
Impairments of our
As of
The impairment losses were primarily due to a decrease in projected revenue in these markets due to the impact of the COVID-19 pandemic and an increase in the discount rate used in the discounted cash flow analyses to estimate the fair value of our licenses due to certain risks specifically associated with the Company and the radio broadcasting industry. To the extent the COVID-19 pandemic and the related economic downturn continues or worsens, we may be required to record further impairment losses in the future.
The valuation of our
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A decrease in projected revenue due to the COVID-19 pandemic may hinder our ability to meet certain financial ratios and financial condition tests under our credit facility and could lead to an event of default.
Our credit facility requires us to maintain specified financial ratios and to satisfy certain financial condition tests. The decreased demand for advertising as a result of the COVID-19 pandemic has materially negatively impacted our revenues. We expect the current adverse economic environment to continue through at least the end of this year and for our results of operations to be materially impacted during that time. As a result, it may become increasingly difficult for us to meet these financial covenants.
A breach of any of the covenants, ratios, tests or restrictions under our credit facility, could result in an event of default thereunder. If an event of default exists under our credit facility, the lenders could elect to declare all amounts outstanding thereunder to be immediately due and payable. If the lenders accelerate the payment of the indebtedness, we cannot assure you that our assets would be sufficient to repay that indebtedness in full. Such conditions could force us to seek protection under federal bankruptcy laws and could significantly or entirely reduce the value of our equity.
The Company is currently seeking an amendment to its credit facility to modify or waive certain of the financial ratios and financial condition tests thereunder. However, there can be no assurance that the Company will be successful in obtaining such an amendment or waiver. Further, the terms of the amended credit facility might subject us to additional and different restrictive covenants that could further limit our operational flexibility or subject us to other events of default.
Additional Considerations
To the extent the COVID-19 pandemic adversely affects our business and financial
results, it may also have the effect of heightening many of the other risks
described in Item 1A, "Risk Factors" of our annual report on Form 10-K for the
year ended
Note Regarding Forward-Looking Statements
Statements in this current report that are "forward-looking statements" are
based upon current expectations and assumptions, and involve certain risks and
uncertainties within the meaning of the
• the effects of the COVID-19 pandemic, including: its potential effects on
the economic environment, our results of operations, liquidity and
financial condition; impairments of our FCC licenses and/or goodwill that
will adversely affect our operating results; and an event of default that
could arise under our credit facility if we are unable to meet certain
financial ratios and financial condition tests or obtain a waiver of
those conditions or an amendment to the credit facility;
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• external economic forces that could have a material adverse impact on our
advertising revenues and results of operations;
• the ability of our radio stations to compete effectively in their
respective markets for advertising revenues;
• our ability to develop compelling and differentiated digital content,
products and services;
• audience acceptance of our content, particularly our radio programs;
• our ability to respond to changes in technology, standards and services
that affect the radio industry;
• our dependence on federally issued licenses subject to extensive federal
regulation;
• actions by the FCC or new legislation affecting the radio industry;
• our dependence on selected market clusters of radio stations for a
material portion of our net revenue;
• credit risk on our accounts receivable;
• the risk that our FCC licenses and/or goodwill could become impaired;
• our substantial debt levels and the potential effect of restrictive debt
covenants on our operational flexibility and ability to pay dividends;
• the potential effects of hurricanes on our corporate offices and radio
stations;
• the failure or destruction of the internet, satellite systems and
transmitter facilities that we depend upon to distribute our programming;
• disruptions or security breaches of our information technology
infrastructure;
• the loss of key personnel;
• our ability to integrate acquired businesses and achieve fully the
strategic and financial objectives related thereto and their impact on
our financial condition and results of operations;
• the fact that we are controlled by the Beasley family, which creates
difficulties for any attempt to gain control of the Company;
• future sales by George G. Beasley or members of his family of our Class A
common stock or an illiquid market for our Class A common stock could
adversely affect its market price; and
• other economic, business, competitive, and regulatory factors affecting
our business, including those set forth in our filings with the SEC .
Our actual performance and results could differ materially because of these
factors and other factors discussed in our
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