Beasley Q1 Revenue, Income Fall

Q1 Off

BEASLEY BROADCAST GROUP first-quarter net revenue fell 2.4% to $24.2 million, with net income falling 71.8% to $700,000 (3 cents/share).  The decline is being attributed to lower ad revenue in MIAMI and PHILADELPHIA.

Chairman/CEO GEORGE G. BEASLEY said, "The first-quarter decline in net revenue reflects several factors that primarily impacted our three largest markets, including the severe winter weather which had a negative effect on our operations in the NORTHEAST.

"Overall, for our five markets that report to MILLER KAPLAN – which represent approximately 77% of total first quarter revenue – BEASLEY station cluster revenue declined by 4.3%, while the total revenue for all reporting radio stations in these markets decreased by 0.3% for the quarter. In PHILADELPHIA, our cluster underperformed the market for the first time since mid-2012 as business was significantly impacted by the severe winter weather that pressured billings, particularly among our local customers, and caused our stations to close for the equivalent of approximately three business weeks during the first quarter. In MIAMI, the first quarter underperformance largely relates to the revenue decline at our AM Sports Talk station (WQAM) following the departure of a popular afternoon host. On APRIL 1st, we addressed this situation directly by re-launching our afternoon drive programming with the addition of another highly rated MIAMI sports talk show host from a direct competitor in the market. Notwithstanding the challenges endured in the first quarter, our ratings and market position in both PHILADELPHIA and MIAMI remain strong.

"A final factor which negatively impacted first-quarter revenue results was the completion of comprehensive training for our sales team regarding our new digital and NTR initiatives. While this training took our sales teams away from customers for several days, we believe it was essential to drive growth in these areas of our business going forward. Our planned investments in sales and programming and the expansion of our digital offerings, combined with the revenue decline, led to a 12.2% decline in first quarter 2014 SOI compared to year-ago levels.

"During the first quarter, we continued to allocate operating cash flow to debt reduction and made credit facility repayments totaling $3.4 million, reducing borrowings to $103.5 million at March 31, 2014. Our debt and leverage reduction initiatives over the last few years are benefiting our bottom line, as first quarter interest expense declined year-over-year by over 40%, or over $0.8 million, while our leverage ratio remains at its lowest level in over 10 years. We intend to continue our use of cash from operations to further reduce debt, pay quarterly cash dividends and to pursue other opportunities to enhance shareholder value.

"We've worked hard to maintain strong community involvement and an intimate connection with our listeners and advertisers in all of our markets. We remain focused on ensuring that our station clusters match or exceed their market's revenue performance while further strengthening our balance sheet. Going forward, we believe that the recent changes in our largest markets as well as the expansion of our digital and NTR offerings should allow us, over the long-term, to overcome those factors in our control which weighed on the first quarter."

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