Conference Call and
WebcastToday, October 30, 2017 at
10:00 a.m. ET719/457-2080, conference ID 7827930
or www.bbgi.com
Beasley Broadcast Group, Inc. (Nasdaq:BBGI) (“Beasley” or the
“Company”), a large- and mid-size market radio broadcaster, today
announced operating results for the three month and nine month
periods ended September 30, 2017.
On November 1, 2016, Beasley acquired 18 radio
stations (net of divestitures) (“the Greater Media stations”). The
actual results presented herein reflect the Company’s legacy
Beasley Broadcast Group broadcasting and digital operations and the
results from the acquired Greater Media stations. On January 6,
2017 the Company completed the sale of WFNZ-AM and three Greater
Media stations in Charlotte. On May 1, 2017 the Company
completed the sale of six stations in Greenville-New
Bern-Jacksonville. The pro-forma results presented herein reflect
the Company’s legacy Beasley Broadcast Group broadcasting and
digital operations and the results from the Greater Media stations,
excluding the aforementioned Charlotte and Greenville-New
Bern-Jacksonville stations, as if the transaction had been
completed on January 1, 2016.
Summary of Third Quarter Results
(actual) |
In millions, except per share data |
Three Months EndedSeptember
30, |
Nine Months EndedSeptember
30, |
|
2017 |
2016 |
2017 |
2016 |
Net revenue |
$ |
58.9 |
$ |
27.7 |
$ |
173.7 |
$ |
83.0 |
Station operating income (SOI - non-GAAP) |
|
16.4 |
|
8.2 |
|
42.3 |
|
23.7 |
Operating income |
|
13.2 |
|
3.8 |
|
37.6 |
|
12.7 |
Net income |
|
6.1 |
|
1.7 |
|
17.5 |
|
6.0 |
Net income per diluted share |
$ |
0.22 |
$ |
0.07 |
$ |
0.63 |
$ |
0.26 |
The $31.2 million, or 112.4%, year-over-year
increase in net revenue during the three months ended September 30,
2017, reflects the operation of stations in Boston, Philadelphia,
Detroit and New Jersey acquired from Greater Media, partially
offset by the disposition of the Charlotte and Greenville-New
Bern-Jacksonville stations and the impact on the comparison of
political revenue in the year ago quarter.
Station Operating Income (SOI, a non-GAAP
financial measure) rose 100% year-over-year in the third quarter of
2017. The increase in SOI reflects the operations of the Greater
Media stations and comparable quarterly net revenues at Beasley’s
existing stations versus the 2016 period, which does not include
the Greater Media stations.
Operating income of $13.2 million in the third
quarter of 2017, an increase of approximately $9.4 million, or
246.9%, over the comparable 2016 period, is primarily attributable
to the increase in station operating income, partially offset by
the $2.5 million change in the fair value of contingent
consideration on the acquisition of the Greater Media due to
fluctuations in the Company’s stock price which increased the fair
value of certain preliminary purchase price accounting items.
Interest expense increased approximately $3.9 million, primarily
related to the financing of the Greater Media acquisition. As
a result of these factors, net income per diluted share increased
to $0.22 per diluted share in the three months ended September 30,
2017, compared to $0.07 per diluted share in the three months ended
September 30, 2016.
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.
Commenting on the financial results, Caroline
Beasley, Chief Executive Officer, said, “The operating and
financial benefits of the Greater Media transaction are becoming
more visible as we continue making progress on our synergy
realization and integration initiatives, which are focused on
driving SOI margin expansion. Pro forma net revenues were flat
compared to the prior year period, despite the non-recurrence of
$0.6 million in political revenue, while we reduced pro forma
station operating expenses by 5.2% or $2.3 million. As a result,
Beasley generated a 16.9% increase in third quarter pro forma SOI
with SOI margins reaching 27.9%, up 400 basis points from 23.9% in
the year-ago period and up 130 basis points on a quarterly
sequential basis from 26.6% in the 2017 second quarter.
“Throughout the third quarter, we continued to
actively manage our local radio broadcasting platform while
implementing our operating disciplines at the acquired Greater
Media stations. We remain focused on strong local programming
to support our goals of ratings and market leadership.
Revenue at Beasley’s combined clusters rose 0.1% in the third
quarter, outperforming the overall markets, which declined 0.8%
according to Miller Kaplan. Of particular note, our Detroit cluster
generated double-digit revenue increases and our Philadelphia
cluster rebounded from a transition-related revenue decline earlier
this year to an increase of 1% in the third quarter. These
increases were offset by declines in our Tampa, Charlotte and Las
Vegas clusters.
“Our total outstanding debt as of September 30,
2017, was approximately $219 million, compared to $225 million at
June 30, 2017. We made voluntary debt repayments of $6.0
million in the third quarter, resulting in a total $49 million
reduction in debt year-to-date. In addition, with our strong
operating cash flows and commitment to return capital to
shareholders, we declared our seventeenth consecutive quarterly
cash dividend during the third quarter.
“Throughout 2017 and looking into 2018, we
intend to continue our strategic priorities of achieving or
exceeding the synergy targets and integration goals for the Greater
media acquired stations, reducing debt, leverage, and our cost of
capital, returning value to our shareholders through our quarterly
cash dividend program and further diversifying our revenue streams.
We remain confident in the radio industry and believe that
Beasley’s ongoing initiatives to drive sales, productivity and
efficiency across our platform, combined with prudent management of
our capital structure, is a proven formula for sustained long term
financial growth and the creation of shareholder value.”
Conference Call and Webcast
InformationThe Company will host a conference
call and webcast today, October 30, 2017, at 10:00 a.m. ET to
discuss its financial results and operations. To access the
conference call, interested parties may dial 719/457-2080,
conference ID 7827930 (domestic and international callers).
Participants can also listen to a live webcast of the call at the
Company’s website at www.bbgi.com. Please allow 15 minutes to
register and download and install any necessary software.
Following its completion, a replay of the webcast can be accessed
for five days on the Company’s website, www.bbgi.com.
Questions from analysts, institutional investors
and debt holders may be e-mailed to ir@bbgi.com at any time up
until 9:00 a.m. ET on Monday, October 30, 2017. Management
will answer as many questions as possible during the conference
call and webcast (provided the questions are not addressed in their
prepared remarks).
About Beasley Broadcast
GroupCelebrating its 56th anniversary this year, Beasley
Broadcast Group, Inc., (www.bbgi.com) was founded in 1961 by George
G. Beasley who remains the Company’s Chairman of the Board.
Beasley Broadcast Group owns and operates 63 stations (45 FM and 18
AM) in 15 large- and mid-size markets in the United States.
Approximately 18.0 million consumers listen to Beasley radio
stations weekly over-the-air, online and on smartphones and tablets
and millions regularly engage with the Company’s brands and
personalities through digital platforms such as Facebook, Twitter,
text, apps and email. For more information, please visit
www.bbgi.com.
DefinitionsStation 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.
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
StatementsStatements 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 “believe,” “hope,” “plan,”
“intends,” “expects,” “expected,” “anticipates” or variations of
such words and similar expressions are intended to identify such
forward-looking statements. Forward-looking statements by
their nature address matters that are, to different degrees,
uncertain, such as statements about expected income; shareholder
value; revenues; and growth. Key risks are described in our
reports filed with the SEC including in our annual report on Form
10-K and quarterly reports on Form 10-Q. 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;
- the ability of our radio stations to compete effectively in
their respective markets for advertising revenues;
- the ability to successfully combine our business with Greater
Media’s business and the potential for unexpected delays, costs, or
liabilities relating to the integration of Greater Media;
- the incurrence of significant Merger-related fees and
costs;
- the risk that the Merger may prevent us from acting on future
opportunities to enhance stockholder value;
- our ability to respond to changes in technology, standards and
services that affect the radio industry;
- audience acceptance of our content, particularly our radio
programs;
- our substantial debt levels and the potential effect of
restrictive debt covenants on our operational flexibility and
ability to pay dividends;
- our dependence on federally issued licenses subject to
extensive federal regulation;
- the risk that our FCC broadcasting licenses and/or goodwill,
including those assets recorded due to the Merger, could become
impaired;
- the failure or destruction of the internet, satellite systems
and transmitter facilities that we depend upon to distribute its
programming;
- disruptions or security breaches of our information technology
infrastructure;
- actions by the FCC or new legislation affecting the radio
industry;
- the loss of key personnel;
- the fact that we are controlled by the Beasley family, which
creates difficulties for any attempt to gain control of us;
- the effect of future sales of Class A common stock by the
Beasley family or the former stockholders of Greater Media;
and
- other economic, business, competitive, and regulatory factors
affecting our businesses.
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 our 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, 2017, 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 EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Net revenue |
$ |
58,902,050 |
|
|
$ |
27,729,026 |
|
|
$ |
173,656,015 |
|
|
$ |
82,961,354 |
|
Operating
expenses: |
|
|
|
|
|
|
|
Station
operating expenses (including stock-based compensation and
excluding depreciation and amortization shown separately
below) |
|
42,481,721 |
|
|
|
19,519,464 |
|
|
|
131,344,313 |
|
|
|
59,235,576 |
|
Corporate
general and administrative expenses (including stock-based
compensation) |
|
4,026,521 |
|
|
|
2,394,970 |
|
|
|
11,745,100 |
|
|
|
7,339,588 |
|
Merger
and disposition expenses |
|
- |
|
|
|
1,200,573 |
|
|
|
746,070 |
|
|
|
1,200,573 |
|
Other
operating expenses |
|
290,581 |
|
|
|
- |
|
|
|
871,743 |
|
|
|
- |
|
Depreciation and amortization |
|
1,453,167 |
|
|
|
816,394 |
|
|
|
4,575,646 |
|
|
|
2,486,381 |
|
Gain on
dispositions |
|
- |
|
|
|
- |
|
|
|
(3,707,993 |
) |
|
|
- |
|
Change in
fair value of contingent consideration |
|
(2,524,195 |
) |
|
|
- |
|
|
|
(7,666,145 |
) |
|
|
- |
|
Termination of postretirement benefits plan |
|
- |
|
|
|
- |
|
|
|
(1,812,448 |
) |
|
|
- |
|
Total
operating expenses |
|
45,727,795 |
|
|
|
23,931,401 |
|
|
|
136,096,286 |
|
|
|
70,262,118 |
|
Operating income |
|
13,174,255 |
|
|
|
3,797,625 |
|
|
|
37,559,729 |
|
|
|
12,699,236 |
|
Non-operating income
(expense): |
|
|
|
|
|
|
|
Interest
expense |
|
(4,717,530 |
) |
|
|
(855,378 |
) |
|
|
(14,296,913 |
) |
|
|
(2,742,462 |
) |
Other
income (expense), net |
|
46,219 |
|
|
|
316,126 |
|
|
|
441,936 |
|
|
|
545,537 |
|
Income
before income taxes |
|
8,502,944 |
|
|
|
3,258,373 |
|
|
|
23,704,752 |
|
|
|
10,502,311 |
|
Income tax expense |
|
2,432,740 |
|
|
|
1,564,005 |
|
|
|
6,242,531 |
|
|
|
4,517,712 |
|
Net
income |
$ |
6,070,204 |
|
|
$ |
1,694,368 |
|
|
$ |
17,462,221 |
|
|
$ |
5,984,599 |
|
|
|
|
|
|
|
|
|
Basic and diluted net
income per share |
$ |
0.22 |
|
|
$ |
0.07 |
|
|
$ |
0.63 |
|
|
$ |
0.26 |
|
Basic common shares
outstanding |
|
27,705,736 |
|
|
|
23,025,764 |
|
|
|
27,690,199 |
|
|
|
23,010,933 |
|
Diluted common shares
outstanding |
|
27,907,570 |
|
|
|
23,176,632 |
|
|
|
27,886,984 |
|
|
|
23,142,178 |
|
Stock-based
compensation |
|
|
|
|
|
|
|
Station
operating expense |
|
69,815 |
|
|
|
36,412 |
|
|
|
203,530 |
|
|
|
109,236 |
|
Corporate
general and administrative expense |
|
472,167 |
|
|
|
164,752 |
|
|
|
1,310,147 |
|
|
|
532,608 |
|
|
|
541,982 |
|
|
|
201,164 |
|
|
|
1,513,677 |
|
|
|
641,844 |
|
Selected Balance Sheet Data -
Unaudited |
(in thousands) |
|
|
September
30,2017 |
|
December 31,2016 |
Cash and cash
equivalents |
$ |
15,455 |
|
$ |
20,325 |
Working capital |
|
58,448 |
|
|
69,472 |
Total assets |
|
631,920 |
|
|
661,670 |
Long term debt, net of
current portion and unamortized debt issuance costs |
|
206,910 |
|
|
247,692 |
Stockholders’
equity |
$ |
217,016 |
|
$ |
202,492 |
Selected Statement of Cash Flows Data –
Unaudited |
|
|
Nine Months EndedSeptember
30, |
|
2017 |
|
2016 |
Net cash provided by
operating activities |
$ |
17,754,746 |
|
|
$ |
13,138,473 |
|
Net cash provided by
(used in) investing activities |
|
30,778,431 |
|
|
|
(1,495,861 |
) |
Net cash used in
financing activities |
|
(53,403,678 |
) |
|
|
(9,310,222 |
) |
Net increase (decrease)
in cash and cash equivalents |
$ |
(4,870,501 |
) |
|
$ |
2,332,390 |
|
Calculation of SOI –
Unaudited |
|
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Net revenue |
$ |
58,902,050 |
|
|
$ |
27,729,026 |
|
|
$ |
173,656,015 |
|
|
$ |
82,961,354 |
|
Station operating
expenses |
|
(42,481,721 |
) |
|
|
(19,519,464 |
) |
|
|
(131,344,313 |
) |
|
|
(59,235,576 |
) |
SOI |
$ |
16,420,329 |
|
|
$ |
8,209,562 |
|
|
$ |
42,311,702 |
|
|
$ |
23,725,778 |
|
Reconciliation of Net Income
to SOI - Unaudited |
|
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Net income |
$ |
6,070,204 |
|
|
$ |
1,694,368 |
|
|
$ |
17,462,221 |
|
|
$ |
5,984,599 |
|
Corporate general and
administrative expenses |
|
4,026,521 |
|
|
|
2,394,970 |
|
|
|
11,745,100 |
|
|
|
7,339,588 |
|
Merger and disposition
expenses |
|
- |
|
|
|
1,200,573 |
|
|
|
746,070 |
|
|
|
1,200,573 |
|
Other operating
expenses |
|
290,581 |
|
|
|
- |
|
|
|
871,743 |
|
|
|
- |
|
Depreciation and
amortization |
|
1,453,167 |
|
|
|
816,394 |
|
|
|
4,575,646 |
|
|
|
2,486,381 |
|
Gain on
dispositions |
|
- |
|
|
|
- |
|
|
|
(3,707,993 |
) |
|
|
- |
|
Change in fair value of
contingent consideration |
|
(2,524,195 |
) |
|
|
- |
|
|
|
(7,666,145 |
) |
|
|
- |
|
Termination of
postretirement benefits plan |
|
- |
|
|
|
- |
|
|
|
(1,812,448 |
) |
|
|
- |
|
Interest expense |
|
4,717,530 |
|
|
|
855,378 |
|
|
|
14,296,913 |
|
|
|
2,742,462 |
|
Other income (expense),
net |
|
(46,219 |
) |
|
|
(316,126 |
) |
|
|
(441,936 |
) |
|
|
(545,537 |
) |
Income tax expense |
|
2,432,740 |
|
|
|
1,564,005 |
|
|
|
6,242,531 |
|
|
|
4,517,712 |
|
SOI |
$ |
16,420,329 |
|
|
$ |
8,209,562 |
|
|
$ |
42,311,702 |
|
|
$ |
23,725,778 |
|
BEASLEY BROADCAST GROUP, INC. |
Supplemental Pro-Forma* Data (Unaudited) |
|
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Reported net
revenue |
$ |
58,902,050 |
|
|
$ |
27,729,026 |
|
|
$ |
173,656,015 |
|
|
$ |
82,961,354 |
|
Acquired
stations |
|
- |
|
|
|
33,591,812 |
|
|
|
- |
|
|
|
100,971,109 |
|
Sold
stations |
|
(31,981 |
) |
|
|
(2,493,840 |
) |
|
|
(2,024,906 |
) |
|
|
(7,081,097 |
) |
Pro-forma net
revenue |
$ |
58,870,069 |
|
|
$ |
58,826,998 |
|
|
$ |
171,631,109 |
|
|
$ |
176,851,366 |
|
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Reported station
operating expenses |
$ |
42,481,721 |
|
|
$ |
19,519,464 |
|
|
$ |
131,344,313 |
|
|
$ |
59,235,576 |
|
Acquired
stations |
|
- |
|
|
|
27,454,857 |
|
|
|
- |
|
|
|
85,928,113 |
|
Sold
stations |
|
(35,005 |
) |
|
|
(2,191,786 |
) |
|
|
(1,896,743 |
) |
|
|
(6,438,288 |
) |
Pro-forma station
operating expenses |
$ |
42,446,716 |
|
|
$ |
44,782,535 |
|
|
$ |
129,447,570 |
|
|
$ |
138,725,401 |
|
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Pro-forma net
revenue |
$ |
58,870,069 |
|
$ |
58,826,998 |
|
$ |
171,631,109 |
|
$ |
176,851,366 |
Pro-forma
station operating expenses |
|
42,446,716 |
|
|
44,782,535 |
|
|
129,447,570 |
|
|
138,725,401 |
Pro-forma SOI |
$ |
16,423,353 |
|
$ |
14,044,463 |
|
$ |
42,183,539 |
|
$ |
38,125,965 |
* The pro-forma results presented
herein reflect the Company’s legacy Beasley Broadcast Group
broadcasting and digital operations and the results from the
Greater Media stations, excluding the divested Greater Media
Charlotte stations, as if the transaction had been completed
January 1, 2016.
Reconciliation of Pro-Forma SOI to
Net Income - Unaudited |
|
|
Three Months EndedSeptember
30, |
|
Nine Months EndedSeptember
30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Net income |
$ |
6,070,204 |
|
|
$ |
1,694,368 |
|
|
$ |
17,462,221 |
|
|
$ |
5,984,599 |
|
Pro-forma net revenue
adjustment |
|
(31,981 |
) |
|
|
31,097,972 |
|
|
|
(2,024,906 |
) |
|
|
93,890,012 |
|
Pro-forma station
operating expenses adjustment |
|
35,005 |
|
|
|
(25,263,071 |
) |
|
|
1,896,743 |
|
|
|
(79,489,825 |
) |
Corporate general and
administrative expenses |
|
4,026,521 |
|
|
|
2,394,970 |
|
|
|
11,745,100 |
|
|
|
7,339,588 |
|
Merger and disposition
expenses |
|
- |
|
|
|
1,200,573 |
|
|
|
746,070 |
|
|
|
1,200,573 |
|
Other operating
expenses |
|
290,581 |
|
|
|
- |
|
|
|
871,743 |
|
|
|
- |
|
Depreciation and
amortization |
|
1,453,167 |
|
|
|
816,394 |
|
|
|
4,575,646 |
|
|
|
2,486,381 |
|
Gain on
dispositions |
|
- |
|
|
|
- |
|
|
|
(3,707,993 |
) |
|
|
- |
|
Change in fair value of
contingent consideration |
|
(2,524,195 |
) |
|
|
- |
|
|
|
(7,666,145 |
) |
|
|
- |
|
Termination of
postretirement benefits plan |
|
- |
|
|
|
- |
|
|
|
(1,812,448 |
) |
|
|
- |
|
Interest expense |
|
4,717,530 |
|
|
|
855,378 |
|
|
|
14,296,913 |
|
|
|
2,742,462 |
|
Other income (expense),
net |
|
(46,219 |
) |
|
|
(316,126 |
) |
|
|
(441,936 |
) |
|
|
(545,537 |
) |
Income tax expense |
|
2,432,740 |
|
|
|
1,564,005 |
|
|
|
6,242,531 |
|
|
|
4,517,712 |
|
Pro-Forma
SOI |
$ |
16,423,353 |
|
|
$ |
14,044,463 |
|
|
$ |
42,183,539 |
|
|
$ |
38,125,965 |
|
CONTACT:Heidi RaphaelVice President of
Corporate CommunicationsBeasley Broadcast Group,
Inc. 239/263-5000 or ir@bbgi.com
Joseph Jaffoni, Jennifer
Neuman
JCIR212/835-8500 or bbgi@jcir.com
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