Webcast: Today,
October 25, 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 nine-month periods ended September 30, 2013 as
summarized below.
Summary of Third
Quarter and Year-to-Date Results |
|
|
|
|
|
|
|
In millions, except per |
Three Months
Ended |
|
Nine Months
Ended |
|
share data |
September 30, |
|
September 30, |
|
|
2013 |
2012 |
Change |
2013 |
2012 |
Change |
Net revenue |
$26.0 |
$24.7 |
5.0% |
$77.6 |
$72.8 |
6.6% |
Station operating income (SOI
- non-GAAP) (1) |
9.4 |
9.0 |
5.2% |
27.6 |
26.9 |
2.6% |
Operating income (1) |
6.6 |
6.5 |
0.8% |
19.4 |
19.4 |
-- |
Net income (1) (2) |
3.2 |
1.2 |
175.5% |
8.0 |
7.4 |
7.3% |
Net income per diluted share
(1) (2) |
$0.14 |
$0.05 |
180.0% |
$0.35 |
$0.33 |
6.1% |
(1) Station operating income, operating
income, net income and net income per diluted share for the nine
month period ended September 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 during the period. |
|
(2) Net income and net income per
diluted share for the nine month period ended September 30, 2013
was 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. Net
income and net income per diluted share for the three and nine
month periods ended September 30, 2012 reflect a non-cash pre-tax
charge of $2.6 million for loss on extinguishment of long-term
debt. |
The $1.2 million, or 5.0%, rise in net revenue during the three
months ended September 30, 2013 compared with the same period in
2012 reflects strength in the Company's Philadelphia and Miami-Fort
Lauderdale market clusters as well as the acquisition of KOAS-FM in
Las Vegas in the 2012 third quarter and KVGS-FM in September
2013.
Third quarter 2013 station operating income (SOI), a non-GAAP
financial measure, rose by $0.5 million, or 5.2%, from the 2012
third quarter to $9.4 million. Higher net revenue in the 2013 third
quarter more than offset the $0.8 million, or 4.9%, increase in
station operating expenses related to operating KOAS-FM in Las
Vegas for a full quarter in 2013, a partial quarter of expenses for
the operation of KVGS-FM in Las Vegas which was acquired in
September 2013, and a rise in sales and programming expenses.
The flat year-to-year comparison of 2013 third quarter
operating income reflects a 6.5%, or $1.2 million, rise in total
operating expenses which offset the quarterly revenue increase.
Interest expense in the 2013 third quarter declined by 25.4%, or
$0.5 million, reflecting the lower cost of borrowing resulting from
the refinancing of the second lien debt in the second quarter of
2013 and reduced amounts outstanding. Income tax expense in
the 2013 third quarter rose 167.9% to $2.1 million from $0.8
million in the 2012 third quarter, reflecting the increase in
pre-tax income. Third quarter net income and net income per
diluted share rose to $3.2 million and $0.14, respectively, for the
2013 third quarter which compares with net income and net income
per diluted share of $1.2 million and $0.05, respectively, in the
same period last year and reflects a $2.6 million pre-tax charge
for loss on extinguishment of long-term debt.
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, "The third quarter marks Beasley Broadcast
Group's fifth consecutive period of top line growth as third
quarter net revenue rose 5.0% and same station net revenue
increased 2.7%. Excluding the benefit of political advertising
in the year-ago quarter, same station net revenue rose
approximately 4.4%.
"The third quarter revenue increase reflects growth in local and
digital revenue, strength in our largest market clusters in
Philadelphia and Miami, and continued growth in
Augusta. Overall, for our five markets that report to Miller
Kaplan – which represent approximately 76% of our total third
quarter revenue – Beasley station clusters grew revenue by 6.8%
while the total revenue for all reporting radio stations in these
markets declined by 1.4% for the quarter. Our out-performance
continues to highlight 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.
"The revenue growth and ongoing expense management initiatives
offset planned increases in sales and programming expenses and
investments in the further expansion of our digital
offerings. As a result, third quarter 2013 SOI increased 5.2%
on an actual basis while third quarter SOI margins remain healthy
at 36.4%, essentially in line with year-ago levels.
"In addition to our focus on core programming and expanding our
on-air and digital advertising platforms, we continue to strengthen
our balance sheet. Reflecting solid cash flows from
operations, we made repayments totaling $2.0 million against the
credit facility during the third quarter, reducing borrowings to
$110.2 million at September 30, 2013 from $119 million at the end
of last year's third quarter. Our debt and leverage reduction
initiatives over the last few years are delivering strong benefits
to our income statement as third quarter interest expense declined
year-over-year by over 25% or approximately $0.5 million while our
leverage ratio is now at its lowest level in over 10 years. We
intend to continue using cash from operations to further lower debt
as well as pursue other initiatives that can enhance shareholder
value.
"Looking forward, we remain focused on our station clusters
matching or exceeding their market's revenue performance and
further strengthening our balance sheet. We have strong
station clusters and ratings in key markets and we are highly
focused on generating profitable station and digital revenue
growth. We believe our dual focus on our core content and new
media opportunities positions Beasley Broadcast Group to deliver
compelling entertainment to radio users and a high value media buy
for advertisers."
Webcast Information
The Company will host a webcast today, October 25, 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., www.bbgi.com, is
a radio broadcasting company that owns and operates 44 stations (28
FM and 16 AM) located in eleven large- and mid-size markets in the
United States. The Company also 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 nine months ended
September 30, 2013, same-station results exclude revenue and
expenses related to the acquisition of KOAS-FM in Las Vegas during
the 2012 third quarter and the revenue and expenses related to the
acquisition of KVGS-FM in Las Vegas during the 2013 third quarter.
For the three and nine months ended September 30, 2012,
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 October 25, 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 |
Nine Months
Ended |
|
September
30, |
September
30, |
|
2013 |
2012 |
2013 |
2012 |
Net revenue |
$25,950,102 |
$24,714,493 |
$77,618,204 |
$72,804,066 |
Operating expenses: |
|
|
|
|
Station operating expenses
(including stock-based compensation and excluding depreciation and
amortization shown separately below) (1) (2) |
16,506,148 |
15,740,976 |
49,982,476 |
45,881,166 |
Corporate general and
administrative expenses (including stock-based compensation)
(3) |
2,157,138 |
1,940,499 |
6,380,716 |
5,921,193 |
Other operating expenses |
185,916 |
-- |
185,916 |
-- |
Depreciation and
amortization |
548,184 |
532,975 |
1,640,408 |
1,563,476 |
Total operating
expenses |
19,397,386 |
18,214,450 |
58,189,516 |
53,365,835 |
Operating income |
6,552,716 |
6,500,043 |
19,428,688 |
19,438,231 |
Non-operating income (expense): |
|
|
|
|
Interest expense |
(1,337,605) |
(1,792,469) |
(5,711,729) |
(4,404,625) |
Loss on extinguishment of
long-term debt |
-- |
(2,608,158) |
(1,260,784) |
(2,608,158) |
Other income (expense),
net |
23,801 |
(176,460) |
106,393 |
(191,528) |
Income before
income taxes |
5,238,912 |
1,922,956 |
12,562,568 |
12,233,920 |
Income tax expense |
2,052,021 |
766,033 |
4,597,221 |
4,807,931 |
Net income |
$3,186,891 |
$1,156,923 |
$7,965,347 |
$7,425,989 |
|
|
|
|
|
Basic and diluted net income per share |
$0.14 |
$0.05 |
$0.35 |
$0.33 |
Basic common shares outstanding |
22,743,515 |
22,675,427 |
22,732,535 |
22,663,680 |
Diluted common shares outstanding |
22,828,664 |
22,743,027 |
22,808,999 |
22,731,263 |
|
|
|
|
|
(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 $7,038 and $4,741 for the three months ended September 30, 2013
and 2012, respectively and $25,829 and $12,253 for the nine months
ended September 30, 2013 and 2012, respectively. |
|
(3) Includes stock-based compensation
of $178,531 and $103,322 for the three months ended September 30,
2013 and 2012, respectively and $480,253 and $333,766 for the nine
months ended September 30, 2013 and 2012, respectively. |
|
|
|
Selected Balance Sheet
Data - Unaudited |
(in
thousands) |
|
|
|
|
September 30, |
December 31, |
|
2013 |
2012 |
Cash and cash equivalents |
$12,490 |
$11,661 |
Working capital |
19,661 |
20,754 |
Total assets |
262,869 |
259,373 |
Long term debt, less current
portion |
104,687 |
113,250 |
Total stockholders' equity |
$90,583 |
$83,049 |
|
|
|
Selected Statement of
Cash Flows Data – Unaudited |
|
|
|
|
Nine
Months Ended September 30, |
|
2013 |
2012 |
Net cash provided by operating
activities |
$14,047,435 |
$15,598,697 |
Net cash used in investing
activities |
(5,965,856) |
(3,251,021) |
Net cash used in financing activities |
(7,252,496) |
(14,606,024) |
Net increase (decrease) in cash and cash
equivalents |
$829,083 |
$(2,258,348) |
|
|
|
Calculation of SOI –
Unaudited |
|
|
|
|
|
|
Three Months
Ended |
Nine Months
Ended |
|
September 30, |
September 30, |
|
2013 |
2012 |
2013 |
2012 |
Net revenue |
$25,950,102 |
$24,714,493 |
$77,618,204 |
$72,804,066 |
Station operating expenses |
(16,506,148) |
(15,740,976) |
(49,982,476) |
(45,881,166) |
SOI |
$9,443,954 |
$8,973,517 |
$27,635,728 |
$26,922,900 |
|
|
|
|
|
|
|
|
|
|
Reconciliation of SOI
to Net Income - Unaudited |
|
|
|
|
|
|
Three Months
Ended |
Nine Months
Ended |
|
September 30, |
September 30, |
|
2013 |
2012 |
2013 |
2012 |
SOI |
$9,443,954 |
$8,973,517 |
$27,635,728 |
$26,922,900 |
Corporate general and administrative
expenses |
(2,157,138) |
(1,940,499) |
(6,380,716) |
(5,921,193) |
Other operating expenses |
(185,916) |
-- |
(185,916) |
-- |
Depreciation and amortization |
(548,184) |
(532,975) |
(1,640,408) |
(1,563,476) |
Interest expense |
(1,337,605) |
(1,792,469) |
(5,711,729) |
(4,404,625) |
Loss on extinguishment of long-term debt |
-- |
(2,608,158) |
(1,260,784) |
(2,608,158) |
Other income (expense), net |
23,801 |
(176,460) |
106,393 |
(191,528) |
Income tax expense |
(2,052,021) |
(766,033) |
(4,597,221) |
(4,807,931) |
Net income |
$3,186,891 |
$1,156,923 |
$7,965,347 |
$7,425,989 |
|
|
|
|
|
|
|
|
|
|
Calculation of
Same-Station SOI - Unaudited |
|
|
|
|
|
|
Three Months
Ended |
Nine Months
Ended |
|
September 30, |
September 30, |
|
2013 |
2012 |
2013 |
2012 |
Reported net revenue |
$25,950,102 |
$24,714,493 |
$77,618,204 |
$72,804,066 |
KOAS-FM |
(847,470) |
(402,507) |
(2,604,129) |
(402,507) |
KVGS-FM |
(133,156) |
-- |
(133,156) |
-- |
Same-station net revenue |
$24,969,476 |
$24,311,986 |
$74,880,919 |
$72,401,559 |
|
|
|
|
|
Reported station operating expenses |
$16,506,148 |
$15,740,976 |
$49,982,476 |
$45,881,166 |
KOAS-FM |
(400,445) |
(230,812) |
(1,249,578) |
(230,812) |
KVGS-FM |
(101,322) |
-- |
(101,322) |
-- |
Same-station operating expenses |
$16,004,381 |
$15,510,164 |
48,631,576 |
$45,650,354 |
|
|
|
|
|
Same-station net revenue |
$24,969,476 |
$24,311,986 |
$74,880,919 |
$72,401,559 |
Same-station operating expenses |
16,004,381 |
15,510,164 |
48,631,576 |
45,650,354 |
Same-station SOI |
$8,965,095 |
$8,801,822 |
$26,249,343 |
$26,751,205 |
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Same-Station SOI to Net Income - Unaudited |
|
|
|
|
|
|
Three Months
Ended |
Nine Months
Ended |
|
September 30, |
September 30, |
|
2013 |
2012 |
2013 |
2012 |
Same-station SOI |
$8,965,095 |
$8,801,822 |
$26,249,343 |
$26,751,205 |
Same-station net revenue adjustment |
980,626 |
402,507 |
2,737,285 |
402,507 |
Same-station station operating expenses
adjustment |
(501,767) |
(230,812) |
(1,350,900) |
(230,812) |
Corporate general and administrative
expenses |
(2,157,138) |
(1,940,499) |
(6,380,716) |
(5,921,193) |
Other operating expenses |
(185,916) |
-- |
(185,916) |
-- |
Depreciation and amortization |
(548,184) |
(532,975) |
(1,640,408) |
(1,563,476) |
Interest expense |
(1,337,605) |
(1,792,469) |
(5,711,729) |
(4,404,625) |
Loss on extinguishment of long-term debt |
-- |
(2,608,158) |
(1,260,784) |
(2,608,158) |
Other income (expense), net |
23,801 |
(176,460) |
106,393 |
(191,528) |
Income tax expense |
(2,052,021) |
(766,033) |
(4,597,221) |
(4,807,931) |
Net income |
$3,186,891 |
$1,156,923 |
$7,965,347 |
$7,425,989 |
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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