Beasley Broadcast Group Reports Third Quarter Net Revenue of $26.3 Million Compared to Combined Net Revenue of $24.5 Million in Comparable Year-Ago Period

Webcast: Today, October 30, 2015 at 10:00 a.m. ET
www.bbgi.com
 
Replay information provided below

NAPLES, Fla., Oct. 30, 2015 (GLOBE NEWSWIRE) — Beasley Broadcast Group, Inc. (Nasdaq:BBGI) (“Beasley,” “Beasley Broadcast” or the “Company”), a large- and mid-size market radio broadcaster, today announced operating results for the three month period ended September 30, 2015. 

On December 1, 2014 the Company completed an Asset Exchange with CBS Radio Stations Inc. (CBS Radio) whereby Beasley exchanged a total of five radio stations in the Philadelphia and Miami-Fort Lauderdale markets for a total of fourteen CBS Radio stations in the Tampa-St. Petersburg, Charlotte and Philadelphia markets.  As a result of the transaction, in accordance with U.S. generally accepted accounting principles (“GAAP”), the Company is required to report the five stations that CBS Radio received under “discontinued operations” for the 2014 third quarter, despite having operated them through November 2014.  The table below summarizes the results of continuing and discontinued operations for the three and nine month periods ended September 30, 2015 and 2014.

The 2015 third quarter income (loss) and income (loss) per diluted share was impacted by a pre-tax $3.5 million non-cash goodwill impairment charge related to the Company’s Wilmington, Delaware station as a result of the Company’s qualitative assessment and subsequent goodwill impairment testing.

Summary of Third Quarter Results
 
In millions, except per share data Three Months Ended
September 30,
Nine Months
Ended September 30,
    2015     2014     2015     2014  
Continuing Operations        
Net revenue $ 26.3   $ 13.0   $ 77.5   $ 40.1  
Station operating income (SOI) (non-GAAP)   6.6     3.6     21.3     12.1  
Operating income (loss)   (0.1 )   0.9     7.6     3.8  
Income (loss) (1)   (0.7 )   (0.0 )   3.1     (0.2 )
Income (loss) per diluted share (1) $ (0.03 ) $ 0.00   $ 0.13   $ (0.01 )

                                                   

In millions, except per share data Three Months Ended
September 30,
Nine Months Ended
September 30,

    2015     2014     2015       2014  
Discontinued Operations        
Net revenue $   –   $ 11.5   $   –   $ 34.5  
Station operating income (SOI) (non-GAAP)    –     4.2        –     12.3  
Operating income     –     4.0       –     11.9  
Income     –     2.5       –     6.3  
Income per diluted share $   –   $ 0.11   $   –   $ 0.28  
         
Combined Operations (continuing and discontinued operations) (non-GAAP)        
Net revenue $ 26.3   $ 24.5   $ 77.5   $ 74.6  
Station operating income (SOI)    6.6      7.8      21.3      24.4  
Operating income (loss)   (0.1 )   5.0     7.6     15.7  
Net income (loss) (1)   (0.7 )   2.5     3.1     6.2  
Net income (loss) per diluted share attributable to Beasley Broadcast shareholders (1) $ (0.03 ) $ 0.11   $  0.13   $  0.27  

(1) Net income and net income per diluted share from continuing operations for the three and nine month periods ended September 30, 2015 include a pre-tax $3.5 million impairment loss related to goodwill in Wilmington. Net income and net income per diluted share from continuing operations for the nine month period ended September 30, 2015 include a $0.4 million benefit from insurance proceeds related to a damaged radio tower in Augusta, Georgia.

Please refer to the “Calculation of SOI” and “Reconciliation of SOI to Net Income” tables at the end of this announcement for a discussion regarding SOI calculations. “Continuing & Discontinued Operations” is the sum of Continuing Operations and Discontinued Operations. Please refer to the “Pro Forma” and “Reconciliation of Pro Forma SOI to Net Income” tables at the end of this announcement for a discussion regarding our pro forma results.

“On a combined basis, third quarter top line revenue growth of 7% reflects the ongoing leadership of our Ft. Myers cluster as well as growth in Tampa-St. Petersburg, one of the two markets we entered as a result of last year’s asset exchange. The station exchange diversified our local radio and marketing solutions platform and, since closing the transaction, we have been executing plans to extract operating and financial synergies from the transaction.

“However, on a pro forma basis, third quarter net revenue decreased 4.5% while SOI declined 12.2%.  The decline in pro forma revenue largely reflects weakness in Charlotte, Las Vegas, Fayetteville and Wilmington, which reduced operating leverage and impacted SOI. However, we continue to make progress with the Tampa-St. Petersburg and Charlotte integration initiatives and reduced combined station operating expenses in these markets by approximately $700,000, while company-wide cost reductions led to a 1.5% reduction in third quarter station operating expenses.

“We are now approximately eleven months into our integration and transition plan related to the asset exchange and despite it being more difficult and time consuming than expected, we believe our success in expense management combined with our ratings strength should lead to financial benefits from the swap in late 2016.  In the meantime, we continue to make progress in reducing debt, while returning capital to shareholders.  During the third quarter we made credit facility repayments totaling $3.0 million, reduced borrowings to $90.2 million at September 30, 2015 and declared our eighth consecutive quarterly cash dividend. 

“Looking forward, we remain focused on operating our station clusters to match or exceed their market’s revenue performance while further strengthening our balance sheet.  We believe our ratings and programming are in great shape and look forward to benefiting from the integration, programming, personnel, cost-efficiency and operating changes put in place over the last year.”

Webcast Information

The Company will host a webcast today, October 30, 2015, at 10:00 a.m. ET to discuss its financial results and operations.  Interested parties may access the webcast at the Company’s web site at www.bbgi.com.  Following its completion, a replay of the webcast can be accessed for five days on the Company’s web site, www.bbgi.com.

About Beasley Broadcast Group:
Founded in 1961, Beasley Broadcast Group, Inc., www.bbgi.com, is a radio broadcasting company that owns and operates 52 stations (34 FM and 18 AM) located in twelve large- and mid-size markets in the United States.

Definitions
Combined operations (non-GAAP) consists of continuing operations and discontinued operations and financial metrics presented as combined operations are calculated by adding together the respective continuing operations and discontinued operations financial metric being presented.  Station Operating Income (SOI) consists of net revenue less station operating expenses.  We define station operating expenses as cost of services and selling, general and administrative expenses.

Pro forma results, as presented herein, assume the asset exchange occurred on January 1, 2014. For the three and nine months ended September 30, 2014, pro forma results include revenue and expenses from the fourteen stations we received in the asset exchange with CBS Radio located in the Tampa-St. Petersburg, Charlotte, and Philadelphia markets.

SOI, SOI from continuing operations, SOI from discontinued operations, and SOI from combined operations are financial measures of performance that are not calculated in accordance with GAAP.  We use these non-GAAP financial measures for internal budgeting purposes.  We also use SOI to make decisions as to the acquisition and disposition of radio stations.  SOI, SOI from continuing operations, SOI from discontinued operations and SOI from combined operations exclude corporate-level costs and expenses and depreciation and amortization, which may be material to an assessment of the Company’s overall operating performance.  Management compensates for this limitation by separately considering the impact of these excluded items to the extent they are material to operating decisions or assessments of the Company’s operating performance.  Moreover, the corresponding amounts of the non-cash and corporate-level costs and expenses excluded from the calculation are available to investors as they are presented on our statements of operations contained in our periodic reports filed with the Securities and Exchange Commission (SEC).

SOI is a measure widely used in the radio broadcast industry.  The Company recognizes that because SOI is not calculated in accordance with GAAP, it is not necessarily comparable to similarly titled measures employed by other companies.  However, management believes that SOI provides meaningful information to investors because it is an important measure of how effectively we operate our business (i.e., operate radio stations) and assists investors in comparing our operating performance with that of other radio companies.

Note Regarding Forward-Looking Statements:
Statements in this release that are “forward-looking statements” are based upon current expectations and assumptions, and involve certain risks and uncertainties within the meaning of the U.S. Private Securities Litigation Reform Act of 1995.  Words or expressions such as “may,” “could,” “should,” “will,” “expects,” “anticipates,” “intends,” “continue,” “looking forward,” “plans,” “believes,” “estimates” and similar expressions or the negative of these terms or other comparable terminology are intended to identify such forward-looking statements.  Key risks are described in our reports filed with the SEC including in our Annual Report on Form 10-K for the year ended December 31, 2014.  Readers should note that forward-looking statements are subject to change and to inherent risks and uncertainties and may be impacted by several factors, including: risks that the stations acquired in the asset exchange with CBS Radio will not be integrated successfully or that the combined company will not realize estimated cost savings, synergies and growth or that such benefits may take longer to realize than expected; risks relating to unanticipated costs of integrating the stations acquired in the asset exchange with CBS Radio; external economic forces that could have a material adverse impact on our advertising revenues and results of operations; our radio stations may not be able to compete effectively in their respective markets for advertising revenues; we may not remain competitive if we do not respond to changes in technology, standards and services that affect our industry; our substantial debt levels; and, the loss of key personnel.  Our actual performance and results could differ materially because of these factors and other factors discussed in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our SEC filings, including but not limited to Annual Reports on Form 10-K or Quarterly Reports on Form 10-Q, copies of which can be obtained from the SEC, www.sec.gov, or our website, www.bbgi.com.  All information in this release is as of October 30, 2015, and we undertake no obligation to update the information contained herein to actual results or changes to our expectations.

-tables follow-

BEASLEY BROADCAST GROUP, INC.
Consolidated Statements of Operations (Unaudited)
 
 
  Three Months Ended
September 30,
  Nine Months Ended
September 30,
    2015       2014       2015       2014  
Net revenue $ 26,264,321     $ 13,047,411     $ 77.539.498     $ 40,143,834  
Operating expenses:              
Station operating expenses (including stock-based compensation and excluding depreciation and amortization shown separately below) (2)   19,651,996       9,421,385       56,207,610       28,089,890  
Corporate general and administrative expenses (including stock-based compensation) (3)   2,307,208       2,194,584       7,049,243       6,812,207  
Radio station exchange transaction cost               349,917        
Depreciation and amortization   863,867       492,568       2,822,594       1,436,537  
Impairment loss   3,520,933             3,520,933        
Total operating expenses   26,344,004       12,108,537       69,950,297       36,338,634  
Operating income (loss)   (79,683 )     938,874       7,589,201       3,805,200  
Non-operating income (expense):              
Interest expense   (1,064,069 )     (1,080,812 )     (2,953,078 )     (3,404,616 )
Loss on extinguishment of long-term debt         (6,970 )           (30,569 )
Other income (expense), net   1,880       261,058       492,379       302,081  
Income (loss) from continuing operations before income taxes   (1,141,872 )     112,150       5,128,502       672,096  
Income tax expense (benefit)   (403,933 )     119,868       2,036,015       834,353  
Income (loss) from continuing operations   (737,939 )     (7,718 )     3,092,487       (162,257 )
Income from discontinued operations (net of income taxes)         2,466,528             6,325,228  
Net income (loss) $ (737,939 )   $ 2,458,810     $ 3,092,487     $ 6,162,971  
               
Basic net income (loss) per share:              
Continuing operations $ (0.03 )   $     $ 0.14     $ (0.01 )
Discontinued operations $     $ 0.11     $     $ 0.28  
Net income (loss) per share $ (0.03 )   $ 0.11     $ 0.14     $ 0.27  
Diluted net income (loss) per share:              
Continuing operations $ (0.03 )   $     $ 0.13     $ (0.01 )
Discontinued operations $     $ 0.11     $     $ 0.28  
Net income (loss) per share $ (0.03 )   $ 0.11     $ 0.13     $ 0.27  
Basic common shares outstanding   22,921,200       22,820,761       22,907,054       22,807,413  
Diluted common shares outstanding   22,999,488       22,908,376       22,995,350       22,908,208  
               

(1) We refer to “Cost of services,” and “Selling, general and administrative” together as “station operating expenses” for the “Calculation of SOI” and “Reconciliation of SOI to Net Income” below.
(2) Includes stock-based compensation of $41,791 and $46,804 for the three months ended September 30, 2015 and 2014, respectively and $125,373 and $175,558 for the nine months ended September 30, 2015 and 2014, respectively.
(3) Includes stock-based compensation of $230,207 and $325,528 for the three months ended September 30, 2015 and 2014, respectively and $788,505 and $919,047 for the nine months ended September 30, 2015 and 2014, respectively.

                                               

Selected Balance Sheet Data – Unaudited
(in thousands)
 
  September 30,
2015
  December 31,
2014
Cash and cash equivalents $ 11,096     $ 14,259  
Working capital   23,257       21,511  
Total assets   310,134       315,967  
Long term debt, net of current portion   90,108       94,581  
Stockholders’ equity $ 131,110     $ 130,542  

Selected Statement of Cash Flows Data – Unaudited
 
  Nine months Ended September 30,
    2015       2014  
Net cash provided by operating activities $ 9,917,359     $ 13,162,883  
Net cash used in investing activities   (2,086,057 )     (2,588,403 )
Net cash used in financing activities   (10,994,801 )     (11,652,292 )
Net decrease in cash and cash equivalents $ (3,163,499 )   $ (1,077,812 )

Calculation of SOI – Unaudited
 
  Three Months Ended
September 30,
  Nine Months Ended
September 30,
    2015       2014       2015       2014  
Net revenue $ 26,264,321     $ 13,047,411     $ 77,539,498     $ 40,143,834  
Station operating expenses   (19,651,996 )     (9,421,385 )     (56,207,610 )     (28,089,890 )
SOI $ 6,612,325     $ 3,626,026     $ 21,331,888     $ 12,053,944  

Reconciliation of SOI to Net Income – Unaudited
 
  Three Months Ended
September 30,
  Nine Months Ended
September 30,
    2015       2014       2015       2014  
SOI $ 6,612,325     $ 3,626,026     $ 21,331,888     $ 12,053,944  
Corporate general and administrative expenses   (2,307,208 )     (2,194,584 )     (7,049,243 )     (6,812,207 )
Radio station exchange transaction costs               (349,917 )      
Depreciation and amortization   (863,867 )     (492,568 )     (2,822,594 )     (1,436,537 )
Impairment loss   (3,520,933 )           (3,520,933 )      
Interest expense   (1,064,069 )     (1,080,812 )     (2,953,078 )     (3,404,616 )
Loss on extinguishment of long-term debt         (6,970 )           (30,569 )
Other income (expense), net   1,880       261,058       492,379       302,081  
Income tax benefit (expense)   403,933       (119,868 )     (2,036,015 )     (834,353 )
Discontinued operations         2,466,528             6,325,228  
Net income (loss) $ (737,939 )   $ 2,458,810     $ 3,092,487     $ 6,162,971  

Calculation of SOI – Discontinued Operations – Unaudited
  Three Months Ended
September 30,
  Nine Months Ended
September 30,
    2015       2014       2015       2014  
Net revenue $     $ 11,502,333     $     $ 34,500,964  
Station operating expenses         (7,344,422 )           (22,168,457 )
SOI $     $ 4,157,911     $     $ 12,332,507  
 
Reconciliation of SOI to Net Income – Discontinued Operations – Unaudited
  Three Months Ended
September 30,
  Nine Months Ended
September 30,
    2015       2014       2015       2014  
SOI $     $ 4,157,911     $     $ 12,332,507  
Depreciation and amortization         (141,668 )           (421,011 )
Other income (expense), net                     (330,416 )
Income tax expense         (1,549,715 )           (5,255,852 )
Net income $     $ 2,466,528     $     $ 6,325,228  

Calculation of SOI – Combined Operations
(continuing and discontinued operations) – Unaudited
  Three Months Ended
September 30,
  Nine Months Ended
September 30,
    2015       2014       2015       2014  
Net revenue $ 26,264,321     $ 24,549,744     $ 77,539,498     $ 74,644,798  
Station operating expenses   (19,651,996 )     (16,765,807 )     (56,207,610 )     (50,258,347 )
SOI $ 6,612,325     $ 7,783,937     $ 21,331,888     $ 24,386,451  
       
Reconciliation of SOI to Net Income – Combined Operations
(continuing and discontinued operations) – Unaudited 
  Three Months Ended
September 30,
  Nine Months Ended
September 30,
    2015       2014       2015       2014  
SOI $ 6,612,325     $ 7,783,937     $ 21,331,888     $ 24,386,451  
Corporate general and administrative expenses   (2,307,208 )     (2,194,584 )     (7,049,243 )     (6,812,207 )
Radio station exchange transaction costs               (349,917 )      
Depreciation and amortization   (863,867 )     (634,236 )     (2,822,594 )     (1,857,548 )
Impairment loss   (3,520,933 )           (3,520,933 )      
Interest expense   (1,064,069 )     (1,080,812 )     (2,953,078 )     (3,404,616 )
Loss on extinguishment of long-term debt         (6,970 )           (30,569 )
Other income (expense), net   1,880       261,058       492,379       (28,335 )
Income tax benefit (expense)   403,933       (1,669,583 )     (2,036,015 )     (6,090,205 )
Net income (loss) $ (737,939 )   $ 2,458,810     $ 3,092,487     $ 6,162,971  

Combined Operations – Unaudited
 
  Three Months Ended September 30, 2014
(unaudited)
  Continuing
Operations
  Discontinued
Operations
  Combined
Operations
Net revenue $ 13,047,411     $ 11,502,333     $ 24,549,744  
Operating expenses:          
Station operating expenses   9,421,385       7,344,422       16,765,807  
Corporate general and administrative expenses   2,194,584             2,194,584  
Depreciation and amortization   492,568       141,668       634,236  
Total operating expenses   12,108,537       7,486,090       19,594,627  
Operating income   938,874       4,016,243       4,955,117  
Non-operating income (expense):          
Interest expense   (1,080,812 )           (1,080,812 )
Loss on extinguishment of long-term debt   (6,970 )           (6,970 )
Other income (expense), net   261,058             261,058  
Income before income taxes   112,150       4,016,243       4,128,393  
Income tax expense   119,868       1,549,715       1,669,583  
Net income (loss)   (7,718 )     2,466,528       2,458,810  

  Nine Months Ended September 30, 2014
(unaudited)
  Continuing
Operations
  Discontinued
Operations
  Combined
Operations
Net revenue $ 40,143,834     $ 34,500,964     $ 74,644,798  
Operating expenses:          
Station operating expenses   28,089,890       22,168,457       50,258,347  
Corporate general and administrative expenses   6,812,207             6,812,207  
Depreciation and amortization   1,436,537       421,011       1,857,548  
Total operating expenses   36,338,634       22,589,468       58,928,102  
Operating income   3,805,200       11,911,496       15,716,696  
Non-operating income (expense):          
Interest expense   (3,404,616 )           (3,404,616 )
Loss on extinguishment of long-term debt   (30,569 )           (30,569 )
Other income (expense), net   302,081       (330,416 )     (28,335 )
Income before income taxes   672,096       11,581,080       12,253,176  
Income tax expense   834,353       5,255,852       6,090,205  
Net income (loss)   (162,257 )     6,325,228       6,162,971  

Pro Forma
 
  Three Months Ended
September 30,
  Nine Months Ended
September 30,
    2015     2014     2015     2014
Reported net revenue   26,264,321     13,047,411     77,539,498     40,143,834  
Exchange stations   (576 )   14,444,596     (3,148 )   43,136,702  
Pro forma net revenue   26,263,745     27,492,007     77,536,350     83,280,536  
                 
Reported station operating expenses   19,651,996     9,421,385     56,207,610     28,089,890  
Exchange stations   (30,834 )   10,508,452     88,208     31,388,303  
Pro-forma station operating expenses   19,621,162     19,929,837     56,295,818     59,478,193  
                 
Pro forma net revenue   26,263,745     27,492,007     77,536,350     83,280,536  
Pro forma station operating expenses   19,621,162     19,929,837     56,295,818     59,478,193  
Pro forma SOI   6,642,583     7,562,170     21,240,532     23,802,343  

Reconciliation of Pro Forma SOI to Net Income
 
  Three Months Ended
September 30,
  Nine Months Ended
September 30,
    2015       2014       2015     2014
Pro forma SOI   6,642,583       7,562,170       21,240,532       23,802,343    
Pro forma net revenue adjustment   576       (14,444,596 )     3,148       (43,136,702 )  
Pro forma station operating expenses adjustment   (30,834 )     10,508,452       88,208       31,388,303     
Corporate general and administrative expenses   (2,307,208 )     (2,194,584 )     (7,049,243 )     (6,812,207 )  
Radio station exchange transaction costs               (349,917 )        
Depreciation and amortization   (863,867 )     (492,568 )     (2,822,594 )     (1,436,537 )  
Impairment loss   (3,520,933 )           (3,520,933 )        
Interest expense   (1,064,069 )     (1,080,812 )     (2,953,078 )     (3,404,616 )  
Loss on extinguishment of long-term debt         (6,970 )           (30,569 )  
Other income (expense), net   1,880       261,058       492,379       302,081    
Income tax benefit (expense)   403,933       (119,868 )     (2,036,015 )     (834,353 )  
Discontinued operations         2,466,528             6,325,228    
Net income (loss)   (737,939 )     2,458,810       3,092,487       6,162,971    

CONTACT: CONTACT:
B. Caroline Beasley, Chief Financial Officer	
Beasley Broadcast Group, Inc.		
239/263-5000; email@bbgi.com		

Joseph N. Jaffoni
JCIR
212/835-8500 or bbgi@jcir.com

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