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 March 31, 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
first quarter, despite having operated them through November.
The table below summarizes the results of continuing and
discontinued operations for the three month periods ended March 31,
2015 and 2014.
Summary of
First Quarter Results |
|
|
In millions, except per share data |
Three Months EndedMarch
31, |
|
|
2015 |
|
|
2014 |
|
Continuing Operations |
|
|
Net revenue |
$ |
24.3 |
|
$ |
13.0 |
|
Station operating income(SOI) (non-GAAP) |
|
6.4 |
|
|
3.3 |
|
Operating income (1) |
|
2.6 |
|
|
0.6 |
|
Income (loss) from continuing operations(1) |
|
1.3 |
|
|
(1.5 |
) |
Income (loss) per diluted share (1) |
$ |
0.06 |
|
$ |
(0.07 |
) |
In millions, except per share data |
Three Months EndedMarch
31, |
|
|
2015 |
|
|
2014 |
|
Discontinued Operations |
|
|
Net revenue |
$ |
- |
|
$ |
11.3 |
|
Station operating income(SOI) (non-GAAP) |
|
- |
|
|
3.8 |
|
Operating income |
|
- |
|
|
3.6 |
|
Income from discontinued operations |
|
- |
|
|
2.2 |
|
Income per diluted share |
$ |
- |
|
$ |
0.10 |
|
|
|
|
Combined Operations(continuing and
discontinued operations) (non-GAAP) |
|
|
Net revenue |
$ |
24.3 |
|
$ |
24.2 |
|
Station operating income(SOI) |
|
6.4 |
|
|
7.1 |
|
Operating income |
|
2.6 |
|
|
4.2 |
|
Net income |
|
1.3 |
|
|
0.7 |
|
Net income per diluted share attributable to Beasley Broadcast
shareholders |
$ |
0.06 |
|
$ |
0.03 |
|
- Operating income, net income and net income per diluted share
from continuing operations for the three month period ended March
31, 2015 include a $0.4 million benefit from insurance proceeds
related to a damaged radio tower in August, 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.
Commenting on the results, George G. Beasley,
Chairman and Chief Executive Officer, said, “On a reported basis,
first quarter net revenue from continuing operations rose 87.2% and
SOI increased 92.3%. However, given the required accounting
treatment for discontinued operations following last December’s
asset exchange, the results exclude the stations we gave up in the
transaction.
“As such, we continue to believe the pro forma
presentation, which assumes the asset exchange occurred on January
1, 2014, better reflects the first quarter operating results. On a
pro forma basis, first quarter net revenue decreased 10.3% while
SOI declined 12.2%. The pro forma revenue decline is
primarily attributable to overall market weakness in Charlotte and
Tampa-St. Petersburg and softer ad sales at our Wilmington cluster
during the first quarter, our reduction in spot units at the newly
acquired stations and revenue in last year’s first quarter in
Charlotte and Tampa-St. Petersburg related to the CBS affiliation
that did not recur due to the change in ownership.
“While the first quarter pro forma presentation
allows for a comparison of the same stations during both periods,
it only partially reflects a range of recent revenue and cost
initiatives primarily initiated at the newly acquired
stations. In our Tampa-St. Petersburg market cluster, we’ve
taken a holistic approach with respect to format changes, on-air
talent and adding new management for the market, operations and
sales. Our strategy in our Charlotte market cluster is
focused on extending the cluster’s successes and driving further
operating efficiencies. Our Tampa-St. Petersburg and
Charlotte clusters are highly competitive in their respective
markets from the standpoint of revenue share.
“In addition to our initiatives during the
quarter to extract financial and operating synergies from the asset
exchange, we made further progress on debt reduction while
returning capital to shareholders. During the first quarter
we made credit facility repayments totaling $1.5 million, reducing
borrowings to $96.2 million at March 31, 2015 and declared our
sixth consecutive quarterly cash dividend.
“Looking forward, we are focused on ensuring
that our station clusters match or exceed their market’s revenue
performance while further strengthening our balance sheet.
Our integration, programming, personnel, cost-efficiency and
operating changes are underway and are expected to be reflected in
future period’s results which will support our goals for growth and
the enhancement of shareholder value.”
Webcast Information
The Company will host a webcast today, May 8,
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 53 stations (34 FM and 19 AM) located in twelve large- and
mid-size markets in the United States.
DefinitionsCombined 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
months ended March 31, 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,” “will,” “expects,”
“anticipates,” “intends,” “continue,” “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 May 8,
2015, and we undertake no obligation to update the information
contained herein to actual results or changes to our
expectations.
BEASLEY BROADCAST GROUP,
INC.Consolidated Statements of Operations (Unaudited)
|
Three months ended March 31, |
|
|
2015 |
|
|
|
2014 |
|
Net revenue |
$ |
24,250,839 |
|
|
$ |
12,955,429 |
|
Operating
expenses: |
|
|
|
Station operating expenses
(including stock-based compensation and excluding depreciation and
amortization shown separately below) (1) (2) |
|
17,813,948 |
|
|
|
9,607,617 |
|
Corporate general and
administrative expenses (including stock-based compensation)
(3) |
|
2,439,147 |
|
|
|
2,275,004 |
|
Radio station exchange transaction
costs |
|
303,762 |
|
|
|
- |
|
Depreciation and amortization |
|
1,118,853 |
|
|
|
466,739 |
|
Total operating expenses |
|
21,675,710 |
|
|
|
12,349,360 |
|
Operating income |
|
2,575,129 |
|
|
|
606,069 |
|
Non-operating income
(expense): |
|
|
|
Interest expense |
|
(948,006 |
) |
|
|
(1,223,715 |
) |
Other income (expense), net |
|
471,805 |
|
|
|
23,039 |
|
Income (loss) from continuing
operations before income taxes |
|
2,098,928 |
|
|
|
(594,607 |
) |
Income tax expense |
|
800,544 |
|
|
|
921,110 |
|
Income (loss) from continuing
operations |
|
1,298,384 |
|
|
|
(1,515,717 |
) |
Income from
discontinued operations (net of income taxes) |
|
- |
|
|
|
2,198,589 |
|
Net income |
$ |
1,298,384 |
|
|
$ |
682,872 |
|
|
|
|
|
Basic and diluted net
income per share: |
|
|
|
Continuing operations |
$ |
0.06 |
|
|
$ |
(0.07 |
) |
Discontinued operations |
$ |
- |
|
|
$ |
0.10 |
|
Net income per share |
$ |
0.06 |
|
|
$ |
0.03 |
|
Basic common shares
outstanding |
|
22,880,681 |
|
|
|
22,782,661 |
|
Diluted common shares
outstanding |
|
22,906,828 |
|
|
|
22,843,287 |
|
|
|
|
|
- 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.
- Includes stock-based compensation of $41,791 and $79,598 for
the three months ended March 31, 2015 and 2014, respectively.
- Includes stock-based compensation of $328,091 and $276,904 for
the three months ended March 31, 2015 and 2014, respectively.
Selected
Balance Sheet Data - Unaudited(in thousands) |
|
|
March 31,2015 |
|
March 31,2014 |
Cash and cash
equivalents |
$ |
12,347 |
|
|
$ |
14,259 |
|
Working capital |
|
22,002 |
|
|
|
21,511 |
|
Total assets |
|
314,122 |
|
|
|
315,967 |
|
Long term debt, net of
current portion |
|
93,303 |
|
|
|
94,581 |
|
Stockholders’ equity |
$ |
130,821 |
|
|
$ |
130,542 |
|
Selected
Statement of Cash Flows Data – Unaudited |
|
|
Three Months Ended March 31, |
|
|
2015 |
|
|
|
2014 |
|
Net cash provided by operating activities |
$ |
1,564,316 |
|
|
$ |
4,214,341 |
|
Net cash used in investing activities |
|
(560,592 |
) |
|
|
(1,155,222 |
) |
Net cash used in financing activities |
|
(2,916,244 |
) |
|
|
(4,639,144 |
) |
Net decrease in cash and cash equivalents |
$ |
(1,912,520 |
) |
|
$ |
(1,580,025 |
) |
Calculation of SOI – Unaudited |
|
|
Three Months EndedMarch
31, |
|
|
2015 |
|
|
|
2014 |
|
Net revenue |
$ |
24,250,839 |
|
|
$ |
12,955,429 |
|
Station operating
expenses |
|
(17,813,948 |
) |
|
|
(9,607,617 |
) |
SOI |
$ |
6,436,891 |
|
|
$ |
3,347,812 |
|
Reconciliation of SOI to Net Income -
Unaudited |
|
|
|
|
Three Months EndedMarch
31, |
|
|
|
2015 |
|
|
|
2014 |
|
|
SOI |
$ |
6,436,891 |
|
|
$ |
3,347,812 |
|
|
Corporate general and
administrative expenses |
|
(2,439,147 |
) |
|
|
(2,275,004 |
) |
|
Radio station exchange
transaction costs |
|
(303,762 |
) |
|
|
- |
|
|
Depreciation and
amortization |
|
(1,118,853 |
) |
|
|
(466,739 |
) |
|
Interest expense |
|
(948,006 |
) |
|
|
(1,223,715 |
) |
|
Other income (expense),
net |
|
471,805 |
|
|
|
23,039 |
|
|
Income tax expense |
|
(800,544 |
) |
|
|
(921,110 |
) |
|
Discontinued
operations |
|
- |
|
|
|
2,198,589 |
|
|
Net income |
$ |
1,298,384 |
|
|
$ |
682,872 |
|
|
Calculation
of SOI – Discontinued Operations - Unaudited |
|
|
Three Months EndedMarch
31, |
|
|
2015 |
|
|
|
2014 |
|
Net revenue |
$ |
- |
|
|
$ |
11,263,840 |
|
Station operating expenses |
|
- |
|
|
|
(7,494,523 |
) |
SOI |
$ |
- |
|
|
$ |
3,769,317 |
|
|
|
|
|
Reconciliation of SOI to Net Income – Discontinued
Operations - Unaudited |
|
|
Three Months EndedMarch
31, |
|
|
2015 |
|
|
|
2014 |
|
SOI |
$ |
- |
|
|
$ |
3,769,317 |
|
Depreciation and amortization |
|
- |
|
|
|
(139,823 |
) |
Other income (expense), net |
|
- |
|
|
|
1,223 |
|
Income tax expense |
|
- |
|
|
|
(1,432,128 |
) |
Net income |
$ |
- |
|
|
$ |
2,198,589 |
|
|
Three Months Ended March 31, 2014
(unaudited) |
|
Continuing Operations |
|
Discontinued Operations |
|
Combined Operations |
Net revenue |
$ |
12,955,429 |
|
|
$ |
11,263,840 |
|
|
$ |
24,219,269 |
|
Operating expenses: |
|
|
|
|
|
Station operating expenses |
|
9,607,617 |
|
|
|
7,494,523 |
|
|
|
17,102,140 |
|
Corporate general and
administrative expenses |
|
2,275,004 |
|
|
|
- |
|
|
|
2,275,004 |
|
Depreciation and amortization |
|
466,739 |
|
|
|
139,823 |
|
|
|
606,562 |
|
Total operating expenses |
|
12,349,360 |
|
|
|
7,634,346 |
|
|
|
19,983,706 |
|
Operating income |
|
606,069 |
|
|
|
3,629,494 |
|
|
|
4,235,563 |
|
Non-operating income
(expense): |
|
|
|
|
|
Interest expense |
|
(1,223,715 |
) |
|
|
- |
|
|
|
(1,223,715 |
) |
Other income (expense), net |
|
23,039 |
|
|
|
1,223 |
|
|
|
24,262 |
|
Income (loss) from continuing
operations before income taxes |
|
(594,607 |
) |
|
|
3,630,717 |
|
|
|
3,036,110 |
|
Income tax expense |
|
921,110 |
|
|
|
1,432,128 |
|
|
|
2,353,238 |
|
Net income (loss) |
|
(1,515,717 |
) |
|
|
2,198,589 |
|
|
|
682,872 |
|
Calculation
of SOI – Combined Operations(continuing and
discontinued operations)- Unaudited |
|
Three Months EndedMarch
31, |
|
|
2015 |
|
|
|
2014 |
|
Net revenue |
$ |
24,250,839 |
|
|
$ |
24,219,269 |
|
Station operating expenses |
|
(17,813,948 |
) |
|
|
(17,102,140 |
) |
SOI |
$ |
6,436,891 |
|
|
$ |
7,117,129 |
|
Reconciliation of SOI to Net Income – Combined
Operations(continuing and discontinued
operations) - Unaudited
|
|
|
Three Months EndedMarch
31, |
|
|
2015 |
|
|
|
2014 |
|
SOI |
$ |
6,436,891 |
|
|
$ |
7,117,129 |
|
Corporate general and administrative
expenses |
|
(2,439,147 |
) |
|
|
(2,275,004 |
) |
Radio station exchange transaction costs |
|
(303,762 |
) |
|
|
- |
|
Depreciation and amortization |
|
(1,118,853 |
) |
|
|
(606,562 |
) |
Interest expense |
|
(948,006 |
) |
|
|
(1,223,715 |
) |
Other income (expense), net |
|
471,805 |
|
|
|
24,262 |
|
Income tax expense |
|
(800,544 |
) |
|
|
(2,353,238 |
) |
Net income |
$ |
1,298,384 |
|
|
$ |
682,872 |
|
Pro Forma |
|
|
Three Months EndedMarch
31, |
|
|
2015 |
|
|
2014 |
Reported net revenue |
|
24,250,839 |
|
|
12,955,429 |
Exchanged stations |
|
(2,572 |
) |
|
14,078,131 |
Pro forma net revenue |
|
24,248,267 |
|
|
27,033,560 |
|
|
|
|
Reported station operating
expenses |
|
17,813,948 |
|
|
9,607,617 |
Exchanged stations |
|
108,315 |
|
|
10,219,185 |
Pro-forma station
operating expenses |
|
17,922,263 |
|
|
19,826,802 |
|
|
|
|
Pro forma net revenue |
|
24,248,267 |
|
|
27,033,560 |
Pro forma station
operating expenses |
|
17,922,263 |
|
|
19,826,806 |
Pro forma SOI |
|
6,326,004 |
|
|
7,206,758 |
Reconciliation of Pro Forma SOI to Net
Income |
|
|
Three Months EndedMarch
31, |
|
|
2015 |
|
|
|
2014 |
|
Pro forma SOI |
|
6,326,004 |
|
|
|
7,206,758 |
|
Pro forma net revenue
adjustment |
|
2,572 |
|
|
|
(14,078,131 |
) |
Pro forma station
operating expenses adjustment |
|
108,315 |
|
|
|
10,219,185 |
|
Corporate general and
administrative expenses |
|
(2,439,147 |
) |
|
|
(2,275,004 |
) |
Radio station exchange
transaction costs |
|
(303,762 |
) |
|
|
- |
|
Depreciation and
amortization |
|
(1,118,853 |
) |
|
|
(466,739 |
) |
Interest expense |
|
(948,006 |
) |
|
|
(1,223,715 |
) |
Other income (expense),
net |
|
471,805 |
|
|
|
23,039 |
|
Income tax expense |
|
(800,544 |
) |
|
|
(921,110 |
) |
Discontinued
operations |
|
- |
|
|
|
2,198,589 |
|
Net income |
|
1,298,384 |
|
|
|
682,872 |
|
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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