|
Webcast: Today, July
26, 2013 at 10:00 a.m. ET |
www.bbgi.com |
Replay information provided
below |
|
Beasley Broadcast Group, Inc. (Nasdaq:BBGI), a large- and mid-size
market radio broadcaster, today announced operating results for the
three-month and six month periods ended June 30, 2013 as summarized
below.
Summary of Second
Quarter and Year-to-Date Results |
In millions, except per share data |
Three Months
Ended June 30, |
|
Six
Months Ended June 30, |
|
|
2013 |
2012 |
Change |
2013 |
2012 |
Change |
Net revenue |
$26.9 |
$24.8 |
8.3% |
$51.7 |
$48.1 |
7.4% |
Station operating income (SOI -
non-GAAP) (1) |
10.1 |
10.2 |
(0.7)% |
18.2 |
17.9 |
1.4% |
Operating income (1) |
7.4 |
7.7 |
(3.6)% |
12.9 |
12.9 |
(0.5)% |
Net income (1) (2) |
2.4 |
3.9 |
(38.9)% |
4.8 |
6.3 |
(23.8)% |
Net income per diluted share (1)
(2) |
$0.10 |
$0.17 |
(41.2)% |
$0.21 |
$0.28 |
(25.0)% |
(1) Station operating income, operating income, net income and
net income per diluted share for the three and six month periods
ended June 30, 2012 benefited from a pre-tax $0.8 million music
license fee settlement with BMI which had the effect of reducing
station operating expenses in the quarter ended June 30, 2012.
(2) Net income and net income per diluted share for the
three and six month periods ended June 30, 2013 were impacted by a
pre-tax $1.0 million fee incurred in connection with debt
pre-payment and a non-cash pre-tax charge of $1.3 million for loss
on extinguishment of long-term debt incurred in connection with an
amended credit agreement and the debt pre-payment.
The $2.1 million, or 8.3%, rise in net revenue during the three
months ended June 30, 2013, compared with the same period in 2012
reflects strength in the Company's Philadelphia, Fayetteville and
Las Vegas market clusters, including the acquisition of KOAS-FM in
Las Vegas during the 2012 third quarter.
The $0.3 million, or 3.6%, year-over-year decline in 2013 second
quarter operating income reflects a 13.7%, or $2.3 million, rise in
total operating expenses which more than offset the quarterly
revenue increase.
Second quarter 2013 station operating income (SOI), a non-GAAP
financial measure, declined by $0.1 million, or 0.7%, to $10.1
million compared with the 2012 second quarter, as the higher
quarterly net revenue was more than offset by a $2.1 million, or
14.6%, increase in station operating expenses related to operating
KOAS-FM in Las Vegas and a rise in sales, programming and streaming
expenses. In addition, the second quarter of 2012 benefited
from the license fee settlement with BMI which had the effect of
reducing station operating expenses during the period.
A $1.3 million loss on extinguishment of long-term debt, as well
as a $1.1 million, or 83.8% increase in interest expense, primarily
attributable to a $1.0 million pre-payment fee, and a $1.0 million,
or 38.9%, reduction in income tax expense resulted in net income
and net income per diluted share of $2.4 million and $0.10,
respectively for the 2013 second quarter, which compares with net
income and net income per diluted share of $3.9 million and $0.17
in the same period last year which included no loss on
extinguishment of long-term debt or pre-payment fee.
Please refer to the "Calculation of SOI," "Reconciliation of SOI
to Net Income," "Calculation of Same-Station SOI," and
"Reconciliation of Same-Station SOI to Net Income" tables at the
end of this announcement for a discussion regarding SOI
calculations.
Commenting on the results, George G. Beasley, Chairman and Chief
Executive Officer, said, "Beasley Broadcast Group generated its
fourth consecutive period of top line growth as second quarter net
revenue rose 8.3% and same station net revenue increased
4.2%. The increase in second quarter revenue reflects strong
national and digital revenue growth which contributed to strength
in several market clusters including Philadelphia, Las Vegas, Ft.
Myers and Augusta. Overall, for our five markets that report
to Miller Kaplan -- which represent approximately 75% of our total
second quarter revenue – Beasley station clusters grew revenue by
8.4% while the total revenue for all reporting radio stations in
these markets declined by 2.4% for the quarter. We attribute
our out-performance to our organization-wide focus on strong core
programming and targeted localism, both of which are contributing
to the Company's ratings strength in its markets.
"Notwithstanding the solid revenue growth, comparisons of our
other financial metrics with the year-ago period are clouded due to
the operating expense credit in last year's second quarter, and
certain charges in the 2013 second quarter including a loss on the
early extinguishment of debt and a prepayment fee incurred in
connection with the refinancing of our second lien debt. In
addition, recent initiatives in the areas of sales, programming and
the further expansion of our digital offerings are expected to
drive long-term revenue growth, but are resulting in higher
operating expenses on a short-term basis."
On April 3, 2013, Beasley Broadcast Group amended its first lien
credit agreement, pre-paying the $25.0 million second lien credit
facility in full and modifying the interest rate margins on the
term loan. To pre-pay the second lien facility, the Company
borrowed an additional $20.0 million on the first lien term loan
and $2.0 million on its revolving credit facility and paid the
remaining $3.0 million from cash on hand. Total debt
outstanding on the credit facility, after the amendment, was $112.7
million, reflecting the full repayment of the second lien credit
facility, and this amount was reduced to $112.2 million at June 30,
2013 reflecting additional repayments during the quarter. In
connection with the amendment, the Company recorded a non-cash loss
on extinguishment of debt of $1.3 million and incurred a $1 million
prepayment fee in the quarter ended June 30, 2013.
Mr. Beasley concluded, "Looking forward, we are excited about
the strength of our ratings in key markets and will continue to
reinvest in programming, personnel and expanding our digital
offerings. As such, we expect our station clusters to exceed
their respective market's revenue performance. At the same
time, we expect to continue to strengthen our balance sheet and
lower leverage by allocating cash flows from operations to further
reduce our borrowings. With further progress on this front, we
intend to evaluate future opportunities to return capital to
shareholders and to selectively expand our operating
platform. In this regard, late in the second quarter the
Company exercised its option to purchase KVGS-FM in Las Vegas for
$4.0 million which it has been operating under a Management
Agreement since September, 2011."
Webcast Information
The Company will host a webcast today, July 26, 2013, 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. is a radio
broadcasting company that owns and operates 43 stations (27 FM and
16 AM) located in eleven large- and mid-size markets in the United
States. The Company also provides management services to an FM
station in Las Vegas which it has agreed to purchase pursuant to an
option, and operates one station in the expanded AM band in
Augusta, GA.
Definitions
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.
Same-station results, as presented herein, compare stations
operated by the Company throughout all periods presented in the
following tables. For the three and six months ended June 30,
2013, same-station results exclude revenue and expenses related to
the acquisition of KOAS-FM in Las Vegas during the 2012 third
quarter.
SOI and same-station SOI are financial measures of performance
that are not calculated in accordance with U.S. generally accepted
accounting principles, which we refer to as 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 and
same-station SOI excludes 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. While 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. 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. We also believe that providing
SOI on a same-station basis is a useful measure of our performance
because it presents SOI before the impact of any acquisitions or
dispositions completed during the relevant periods. This
allows investors to measure the performance of radio stations we
owned and operated during the entirety of two operating periods
being compared.
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 "intends," "expects," "expected," "anticipates"
or variations of such words and similar expressions 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,
2012. 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: 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 Results of Operations
and Financial Condition" 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 July 26, 2013, 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 June 30, |
Six Months
Ended June 30, |
|
2013 |
2012 |
2013 |
2012 |
|
|
|
|
|
Net revenue |
$26,855,633 |
$24,790,965 |
$51,668,102 |
$48,089,573 |
Operating expenses: |
|
|
|
|
Station operating expenses (including
stock-based compensation and excluding depreciation and
amortization shown separately below) (1) (2) |
16,773,324 |
14,634,886 |
33,476,328 |
30,140,190 |
Corporate general and administrative
expenses (including stock-based compensation) (3) |
2,129,569 |
1,940,349 |
4,223,578 |
3,980,694 |
Depreciation and amortization |
527,529 |
516,452 |
1,092,224 |
1,030,501 |
Total operating expenses |
19,430,422 |
17,091,687 |
38,792,130 |
35,151,385 |
Operating income |
7,425,211 |
7,699,278 |
12,875,972 |
12,938,188 |
Non-operating income (expense): |
|
|
|
|
Interest expense |
(2,326,250) |
(1,265,985) |
(4,374,124) |
(2,612,156) |
Loss on extinguishment of long-term
debt |
(1,260,784) |
-- |
(1,260,784) |
-- |
Other income (expense), net |
36,563 |
(89,374) |
82,592 |
(15,068) |
Income before income taxes |
3,874,740 |
6,343,919 |
7,323,656 |
10,310,964 |
Income tax expense |
1,516,771 |
2,482,849 |
2,545,200 |
4,041,898 |
Net income |
$2,357,969 |
$3,861,070 |
$4,778,456 |
$6,269,066 |
|
|
|
|
|
Basic and diluted net income per share |
$ 0.10 |
$ 0.17 |
$ 0.21 |
$ 0.28 |
Basic common shares outstanding |
22,742,198 |
22,674,258 |
22,726,954 |
22,657,742 |
Diluted common shares outstanding |
22,798,418 |
22,733,063 |
22,774,001 |
22,707,464 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 $11,553 and $4,741 for the
three months ended June 30, 2013 and 2012, respectively and $18,791
and $7,512 for the six months ended June 30, 2013 and 2012,
respectively. |
|
|
|
|
|
(3)
Includes stock-based compensation of $171,747 and $103,322 for the
three months ended June 30, 2013 and 2012, respectively and
$301,722 and $230,444 for the six months ended June 30, 2013 and
2012, respectively. |
|
|
|
Selected Balance Sheet
Data - Unaudited (in thousands) |
|
|
|
|
June 30,
2013 |
December 31,
2012 |
Cash and cash equivalents |
$ 12,992 |
$ 11,661 |
Working capital |
22,005 |
20,754 |
Total assets |
260,967 |
259,373 |
Long term debt, less current portion |
106,750 |
113,250 |
Total stockholders' equity |
$ 88,007 |
$ 83,049 |
|
|
|
Selected Statement of
Cash Flows Data – Unaudited |
|
|
|
|
Six Months Ended
June 30, |
|
2013 |
2012 |
Net cash provided by operating
activities |
$ 7,412,977 |
$ 9,164,142 |
Net cash used in investing activities |
(830,987) |
(623,633) |
Net cash used in financing activities |
(5,250,263) |
(6,753,350) |
Net increase in cash and cash
equivalents |
$ 1,331,727 |
$ 1,787,159 |
|
|
|
Calculation of
SOI – Unaudited |
|
|
|
|
|
|
Three Months
Ended June 30, |
Six
Months Ended June
30, |
|
2013 |
2012 |
2013 |
2012 |
Net revenue |
$ 26,855,633 |
$ 24,790,965 |
$ 51,668,102 |
$ 48,089,573 |
Station operating expenses |
(16,773,324) |
(14,634,886) |
(33,476,328) |
(30,140,190) |
SOI |
$ 10,082,309 |
$ 10,156,079 |
$ 18,191,774 |
$ 17,949,383 |
|
|
|
Reconciliation of SOI
to Net Income - Unaudited |
|
|
|
|
Three Months
Ended June 30, |
Six
Months Ended June
30, |
|
2013 |
2012 |
2013 |
2012 |
SOI |
$ 10,082,309 |
$ 10,156,079 |
$ 18,191,774 |
$ 17,949,383 |
Corporate general and administrative
expenses |
(2,129,569) |
(1,940,349) |
(4,223,578) |
(3,980,694) |
Depreciation and amortization |
(527,529) |
(516,452) |
(1,092,224) |
(1,030,501) |
Interest expense |
(2,326,250) |
(1,265,985) |
(4,374,124) |
(2,612,156) |
Loss on extinguishment of long-term debt |
(1,260,784) |
-- |
(1,260,784) |
-- |
Other income (expense), net |
36,563 |
(89,374) |
82,592 |
(15,068) |
Income tax expense |
(1,516,771) |
(2,482,849) |
(2,545,200) |
(4,041,898) |
Net income |
$ 2,357,969 |
$ 3,861,070 |
$ 4,778,456 |
$ 6,269,066 |
|
|
|
Calculation of
Same-Station SOI - Unaudited |
|
|
|
|
Three Months
Ended June 30, |
Six
Months Ended June
30, |
|
2013 |
2012 |
2013 |
2012 |
Reported net revenue |
$ 26,855,633 |
$ 24,790,965 |
$ 51,668,102 |
$ 48,089,573 |
|
(1,029,246) |
-- |
(1,756,659) |
-- |
Same-station net revenue |
$ 25,826,387 |
$ 24,790,965 |
$ 49,911,443 |
$ 48,089,573 |
|
|
|
|
|
Reported station operating expenses |
$ 16,773,324 |
$ 14,634,886 |
$ 33,476,328 |
$ 30,140,190 |
|
(424,652) |
-- |
(849,133) |
-- |
Same-station operating expenses |
$ 16,348,672 |
$ 14,634,886 |
$ 32,627,195 |
$ 30,140,190 |
|
|
|
|
|
Same-station net revenue |
$ 25,826,387 |
$ 24,790,965 |
$ 49,911,443 |
$ 48,089,573 |
Same-station operating expenses |
16,348,672 |
14,634,886 |
32,627,195 |
30,140,190 |
Same-station SOI |
$ 9,477,715 |
$ 10,156,079 |
$ 17,284,248 |
$ 17,949,383 |
|
|
|
Reconciliation of
Same-Station SOI to Net Income -
Unaudited |
|
|
|
|
Three Months
Ended June 30, |
Six
Months Ended June
30, |
|
2013 |
2012 |
2013 |
2012 |
Same-station SOI |
$ 9,477,715 |
$ 10,156,079 |
$ 17,284,248 |
$ 17,949,383 |
Same-station net revenue adjustment |
1,029,246 |
-- |
1,756,659 |
-- |
Same-station station operating expenses
adjustment |
(424,652) |
-- |
(849,133) |
-- |
Corporate general and administrative
expenses |
(2,129,569) |
(1,940,349) |
(4,223,578) |
(3,980,694) |
Depreciation and amortization |
(527,529) |
(516,452) |
(1,092,224) |
(1,030,501) |
Interest expense |
(2,326,250) |
(1,265,985) |
(4,374,124) |
(2,612,156) |
Loss on extinguishment of long-term debt |
(1,260,784) |
-- |
(1,260,784) |
-- |
Other income (expense), net |
36,563 |
(89,374) |
82,592 |
(15,068) |
Income tax expense |
(1,516,771) |
(2,482,849) |
(2,545,200) |
(4,041,898) |
Net income |
$ 2,357,969 |
$ 3,861,070 |
$ 4,778,456 |
$ 6,269,066 |
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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