Loss of Political Dollars Hits Beasley Q4 Revs

Revs Down

BEASLEY BROADCAST GROUP, INC. fourth-quarter net revenue fell 6.8% to $25.2 million, but net income rose 1.7% to $3.4 million (per-share flat at 15 cents).  The revenue slip was attributed to political advertising, which boosted 2010's figures; the increase in net income was attributed to a $1 million reduction in interest expense.

Chairman/CEO GEORGE F. BEASLEY said, "Radio advertising remained relatively stable despite widespread economic concerns and volatility in the capital markets throughout the year. Importantly, during the fourth quarter and throughout 2011, we continued to make progress across the organization in enhancing operating efficiencies and maintaining a disciplined approach to spending.  Overall, the industry recorded seven consecutive quarters of growth through the third quarter of 2011 which underscores our belief that radio remains both resilient and highly relevant in a digital world. During the quarter, the Company celebrated its 50th consecutive year in radio broadcasting and our success over this period has been defined by our ability to bring consumers and advertisers a platform that efficiently addresses their respective needs. In this regard, BEASLEY BROADCAST GROUP remains committed to continuously developing strategies to benefit from changes in the media and advertising environments and the preferences of consumers and advertisers.

"BEASLEY BROADCAST GROUP's fourth-quarter revenue decline reflects a combination of weak overall national spending in our markets and several unique national advertising issues that we have addressed or which were essentially one time in nature. In addition, approximately one third of the overall revenue decline relates to a reduction in political spending in a non-election year. However, even during periods of lower revenue, our bottom line continues to benefit from our streamlined cost and operating structure. In light of the challenges faced during the quarter, we lowered station operating expenses by 5% while total operating expenses for the quarter were also reduced by 5% on a year-over-year basis. These factors, combined with a significant reduction in interest expense, led to a 1.7% increase in 2011 fourth quarter net income.

"Excluding the impact of political, revenue would have increased on a full year basis. Through active management of station operating expenses, which we reduced by 1.9% in 2011, SOI rose by 2.9% in 2011 compared with 2010. In addition, 2011 net income rose 26% over 2010 levels and reflecting our ongoing focus on costs and efficiencies, we increased SOI margins to 35%, from 34% in 2010.

"During the fourth quarter, we further strengthened our balance sheet as we made repayments totaling $5.9 million against the credit facility, reducing total bank debt to $126.7 million at DECEMBER 31st, 2011 from $142.0 million at the end of 2010. We ended the fourth quarter with our lowest leverage ratio in over five-and-a-half years and remain committed to using cash from operations to further lower debt as well as 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 the balance sheet through reductions in borrowings. We have strong station clusters and ratings in key markets and we are highly focused on generating profitable station and digital revenue growth. We also continue to actively evolve the company through the deployment of relevant technologies as we expanded our digital capabilities and offerings and launched a new app for ANDROID devices. We believe our concurrent focus on our core content and new media opportunities allows us to best address both current and prospective radio users. We also believe our platform is emerging as a high value media buy for advertisers and a primary source of on-air, online and mobile entertainment for consumers, which in turn is expected to generate new value for shareholders.  In addition, we expect a return of political spending in 2012 with several of our markets expected to benefit from contested elections."

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