BBGI

Core Strategic Priorities & Transition Progress

• The company remains in a three-priority transition: stabilizing and rebuilding core revenue, scaling higher-margin controllable digital business, and strengthening the balance sheet via disciplined deleveraging. Meaningful progress was made on cost structure improvement and balance sheet transformation in Q2, while revenue performance remains below target amid a challenging advertising environment.
• Adjusted EBITDA improved YoY to $5.3 million (from $4.7 million in Q2 2025), reflecting early benefits of cost reduction actions.

Cost Structure Optimization

• A company-wide expense reduction program was implemented in May 2026, spanning voluntary retirements, market-level operating changes, digital restructuring, and reduced technology and vendor expenses. The program is expected to generate $10.5 million in annualized cost savings, with $5 million of benefit in 2026; full annual savings will be reflected in 2027, as Q2 only captured partial benefits.
• The goal of cost reduction is to build a more efficient operating model that converts revenue to EBITDA and free cash flow at higher rates, while protecting investments in high-growth priority areas: local direct advertising, O&O digital products, integrated client solutions, and supporting talent and tools.

Balance Sheet & Deleveraging Actions

• Balance sheet restructuring completed on May 1, 2026, reduced total long-term debt from $235.3 million at the end of 2025 to $129 million at June 30, 2026, and cut quarterly interest expense from $3.3 million YoY to $1.5 million. The restructuring created a $91.8 million gain on debt restructuring, leading to Q2 2026 net income of $84.3 million ($45.95 per diluted share).
• On July 31, 2026, the company entered an agreement to sell two non-core radio stations (Charlotte and Las Vegas) to EMF for $8 million, expected to close in 60-90 days. Proceeds will be used to pay down 1L lender debt, with no expected impact to ongoing EBITDA.
• An at-the-market (ATM) equity program was established in June 2026 as a supplemental capital management tool; approximately $635,000 in gross proceeds was raised in early June before the quarterly blackout period. Proceeds will be used for deleveraging to improve long-term shareholder value.

Operational & Digital Transformation Milestones

• Digital audience now accounts for more than 50% of the company's total audience footprint, a company first, up from 47% a year prior. Trailing 12-month digital audience grew 7% YoY, while over-the-air audience declined 5% YoY. Website traffic and podcast consumption led digital audience growth.
• Foundational sales organization infrastructure (common processes, pipeline visibility, market-level accountability) is now fully in place, with Q2 focus shifting to execution. Two new enterprise direct sales programs launched in Q2 generated $6 million in net new closed business, with strict pricing discipline (no discounting).
• Programmatic digital sell-through was restructured: after renegotiating demand relationships and signing a bulk deal with a major audio platform, sell-through increased to above 80%, and programmatic revenue is now growing double digits on the same existing audience.
• Political sales organization was prepared early, with locked-in rate and inventory discipline ahead of demand: 25% of full-year political budget is already booked, with upside across key battleground markets aligned to the company's portfolio (Michigan, Nevada, Georgia, North Carolina, Florida), including digital and streaming political revenue.
• Category performance: Gaming revenue increased $1.1 million YoY (driven by World Cup-related ad spend), home improvement revenue grew 13% YoY, while automotive revenue declined 22% YoY amid ongoing sector weakness.

• Third quarter 2026 same-station revenue is expected to decline in the mid-single-digit percentage range YoY. • Fourth quarter 2026 revenue pacing is currently very strong, even with only minimal political bookings to date. • Full annualized benefits from the May 2026 cost reduction program will begin to have a more substantial positive impact on results in H2 2026, offsetting some remaining revenue pressure. • Core 2026 priorities going forward are: improve local direct sales execution, increase revenue and margin contribution from O&O digital products, fully capture cost reduction benefits in EBITDA and free cash flow, and continue debt reduction and advance refinancing strategy.

Total company Q2 2026 revenue was $44.1 million, a 9.6% year-over-year (YoY) decline on a same-station basis, compared to $49.1 million in Q2 2025.

• Digital segment: Reported revenue was $11.7 million, down from $13.2 million YoY (the comparison includes $1.9 million in exited prior-year digital direct revenue and $400,000 in exited Fort Myers market revenue). Same-station digital revenue grew 7% YoY, and accounted for 26% of total company revenue. Owned-and-operated (O&O) digital, the highest-margin digital line, grew 10% YoY on a same-station basis, and 18% YoY in the first half of 2026. Third-party resold digital revenue declined by design, as the company redirects seller capacity to higher-margin O&O inventory. Digital operating expenses increased modestly YoY due to targeted long-term growth investments, partially offset by Q2 2026 expense reduction actions that will be fully reflected in H2 2026.
• Broadcast (traditional radio) segment: National non-political agency revenue declined 21% YoY (same-station), local agency revenue declined 12% YoY (same-station). Local direct broadcast revenue grew 9% YoY (same-station), an improvement from recent quarters driven by reduced client churn and expanded wallet share with existing advertisers. Political revenue totaled $400,000 in Q2, with 25% of full-year 2026 political budget already booked.

• The broader advertising environment remains challenging, with persistent softness in traditional national and local agency advertising spend that has pressured top-line revenue. • National agency demand continues to be under pressure, including reduced spend from DEI-focused campaigns across multiple categories that is outside of management's control. • Digital profitability is below management's expectations, with a material monetization gap between the large, engaged digital audience the company has built and current revenue and margin conversion from that audience. • Revenue performance remains inconsistent across the company's market footprint, and overall top-line revenue remains below target levels. • The company still has remaining debt obligations that require future refinancing or retirement ahead of maturity, and deleveraging efforts are not yet complete.

No questions were submitted by conference call participants, so no Q&A exchanges occurred.