Beasley Revenues Take 24% Hit In Q2
August 4, 2009 at 5:07 AM (PT)
BEASLEY BROADCAST GROUP's second-quarter revenue dropped 24% year-to-year to $23.6 million, with a net income decline from $2.4 million to $700,000 (10 to 3 cents/diluted share), blamed on lower operating income and increased interest expense due to increased borrowing costs under amendments to the company's credit agreement and swap agreements. The revenue slippage was attributed to drops in MIAMI-FORT LAUDERDALE, PHILADELPHIA and LAS VEGAS, representing 62% of the total.
Chairman/CEO GEORGE G. BEASLEY said, "The deep recession has caused consumers and businesses to significantly reduce discretionary spending, and as a result, ad budgets are believed to have reached the lowest levels in decades. The economies in key BEASLEY markets including MIAMI, LAS VEGAS and FORT MYERS-NAPLES remain unsettled due to severe real estate downturns, while our stations in all markets faced ongoing declines in important advertising segments such as auto and retail.
"Notwithstanding the weak operating environment, the Company's interactive and 'off-air' quarterly revenues continued to grow with revenue from these sources rising 4.9% over the year-ago period to approximately $1.5 million; the Company again achieved bottom line profitability based largely on our expense management initiatives; and we reduced our total bank debt to $171.0 million from $173.5 million at the end of the first quarter.
"During the quarter, BEASLEY continued to take the necessary steps to reduce costs at both the station and corporate levels, resulting in a 21% reduction of total costs and expenses compared with year ago levels. Furthermore, during the quarter, we entered into an agreement to divest KBET-A and certain assets of KCYE and KFRH in our LAS VEGAS market cluster, and once completed we intend to move KCYE's popular COYOTE COUNTRY format to the KFRH frequency. We are confident that this will prove to be an attractive strategic and financial transaction for our shareholders, while reflecting our long-term commitment to the LAS VEGAS market.
"While unfavorable market conditions persist, we've taken significant steps company-wide to cut costs not vital to our sales and programming efforts. The benefit of this approach is highlighted by our profitability and debt reduction throughout the first half of 2009 and BEASLEY remains positioned with the right combination of resources, cost and operating disciplines to benefit as radio advertising demand rebounds."