Beasley Reports Third-Quarter Net Revenue Rises 5.6% To $27.7 Million, B. Caroline Beasley Named CEO, Marie Tedesco Named CFO
November 2, 2016 at 5:08 AM (PT)
BEASLEY BROADCAST GROUP has announced operating results for the three month period ended SEPTEMBER 30th, 2016. On NOVEMBER 1st, 2016, BEASLEY completed its acquisition of GREATER MEDIA, which included the acquisition of 18 radio stations (net of divestitures) and which is expected to more than double BEASLEY’s revenue base.
The Company also announced that, effective JANUARY 1st, 2017, B. CAROLINE BEASLEY has been named CEO of the Company. Ms. BEASLEY has served as the Company’s EVP/CFO/Treasurer/Secretary since 1994, as a Director of the Company since 1983 and as the Company’s Interim CEO since MARCH 2016, following GEORGE G. BEASLEY’s medical leave of absence. GEORGE BEASLEY will continue to serve as the Company’s Chairman of the Board and Ms. BEASLEY will continue to serve as a Board member. MARIE TEDESCO, who presently serves as the Company’s VP/Finance, will assume Ms. BEASLEY’s responsibilities as Chief Financial Officer, effective JANUARY 1st, 2017.
Commenting on the appointments, GEORGE BEASLEY said, “CAROLINE brings to her new role an unrivalled passion for radio, our stations and the markets where we operate and I am proud that she will lead our expanded base of operations. She has the experience and industry knowledge to compete effectively in today’s multi-platform environment and has been instrumental in building our station platform and digital operations while bringing new efficiencies to our organization. I am confident these accomplishments and experience will serve us well as we integrate the GREATER MEDIA assets and derive value from this compelling, value-building transaction. We look forward to the benefits of CAROLINE’s leadership, experience and relationships as we execute on our plans to further broaden the Company and ensure that our stations deliver excellent entertainment for listeners and high value for our advertising and brand clients.
“Similarly, MARIE brings a long record of financial experience to her new role including contributions at BEASLEY in areas such as financial reporting, corporate growth and strategic development. We are delighted to have tremendous bench strength in the finance department as MARIE will continue to work with our deep and experienced team of operations, marketing and sales professionals and outside advisors as we execute on our strategic growth initiatives.”
Operating income, net income and net income per diluted share for the three and nine month periods ended SEPTEMBER 30th, 2016 were impacted by merger expenses of $1.2 million. Operating income, net income and net income per diluted share for the three and nine month periods ended SEPTEMBER 30th, 2015 include a $3.5 million impairment loss.
The $1.5 million, or 5.6%, year-over-year increase in net revenue during the three months ended SEPTEMBER 30th, 2016, primarily reflects higher revenue from the Company’s TAMPA-ST. PETERSBURG, CHARLOTTE and FAYETTEVILLE market clusters.
Station Operating Income (SOI, a non-GAAP financial measure), rose 24.2% year over year in the third quarter of 2016. The increase in SOI reflects the increase in quarterly net revenues and comparable levels of station operating expenses in both the 2016 and 2015 third quarters.
Operating income of $3.8 million in the third quarter of 2016, an increase from a loss of $0.1 million in the comparable year-ago period, is primarily attributable to the rise in station operating income, partially offset by merger expenses of $1.2 million. Operating income in the 2015 third quarter was impacted by a pre-tax $3.5 million non-cash goodwill impairment charge related to the Company’s WILMINGTON, DE station.
Net income for the 2016 third quarter of $1.7 million compared to a loss of $0.7 million a year ago, primarily as a result of the growth in operating income, a $0.2 million or 19.6% reduction in interest expense and a $0.3 million other income related to insurance proceeds for the CHARLOTTE cluster. As a result of these factors, net income per diluted share was $0.07 per share in the three months ended SEPTEMBER 30th, 2016 compared with a $0.03 per diluted share loss in the comparable year ago period.
Commenting on the financial results, CAROLINE BEASLEY, Interim CEO/CFO said, “BEASLEY’s strong third-quarter revenue, SOI and net income growth reflect solid industry fundamentals, strength across our platform of existing stations, high levels of operating discipline and the benefits of our initiatives to de-lever and strengthen our balance sheet. In the third quarter we again outperformed our markets that report to MILLER KAPLAN on a combined revenue basis, a trend we expect to continue. Specifically, our clusters generated an approximate 7.8% increase in net revenue compared with an increase of 2.6% in the overall markets. Our outperformance was broad-based and included our clusters in TAMPA-ST. PETERSBURG, AUGUSTA, CHARLOTTE, FAYETTEVILLE, LAS VEGAS and GREENVILLE-NEW BERN-JACKSONVILLE.
“The 5.6% increase in third-quarter net revenue combined with flat station operating expenses drove a 24.2% rise in station operating income and, coupled with our operating disciplines, led to a 440 basis point improvement in our station operating income margin compared to the same period a year ago.
“In addition, our focus on actively and conservatively managing our capital structure to provide the financial flexibility to support our near- and long-term growth initiatives was evident as lower borrowing costs due to lower leverage resulted in a 19.6% year-over-year reduction in 2016 third quarter interest expense. Despite the impact of $1.2 million of expenses related to our just completed accretive acquisition of GREATER MEDIA, we reported solid bottom line results and diluted earnings per share of $1.7 million and $0.07, respectively. In addition, reflecting our strong cash flows and commitment to return capital to shareholders, we declared our twelfth consecutive quarterly cash dividend during the quarter.”
Ms. BEASLEY added, “Yesterday we completed the acquisition of GREATER MEDIA, which includes the accretive acquisition of 18 stations, net of announced divestitures. The transaction immediately and significantly broadens our local radio broadcasting and digital platform, geographic footprint and revenue base by adding leading stations and great brands that are complementary to our existing operating base, while presenting the opportunity for synergies with the Company’s existing station portfolio. Specifically, the transaction increases our broadcast portfolio by approximately 33% and more than doubles our audience reach as we enter four new markets with nine stations – DETROIT, MI; MIDDLESEX, NJ; MONMOUTH, NJ AND MORRISTOWN, NJ – and adds nine other stations in PHILADELPHIA, PA and BOSTON, MA where we already operate.
“Looking forward, we plan to apply our historical focus on strong core programming and targeted localism to the newly acquired stations as these strategies support strong ratings and market leadership. While we’ll record initial contributions from the new stations in the fourth quarter, BEASLEY will realize the value of the transaction beginning in 2017 as we extract operating and cost synergies, enhance sales practices, and apply our proven operating disciplines. ”