Beasley Q2 Earnings Up 28.6%

RADIO ONLINE | Friday, August 3, 2018

Beasley Broadcast Group, Inc. has announced operating results for the three-month and six-month periods ended June 30.

As previously reported, on May 1, 2017, the Company completed the sale of six stations in Greenville-New Bern-Jacksonville, and on December 19, 2017, Beasley completed an asset exchange transaction whereby the Company exchanged its Boston adult contemporary station WMJX-FM and $12.0 million for Boston's sports station WBZ-FM. The results presented herein reflect the operations and results from WBZ-FM in the three and six months ended June 30, 2018 and WMJX-FM in the three and six months ended June 30, 2017. The results also reflect one month of contribution from the Greenville-New Bern-Jacksonville stations in the three-month period, and four months of contribution in the six-month period ended June 30, 2017.

The $0.6 million, or 1.0%, year-over-year increase in net revenue during the three months ended June 30, 2018, reflects the inclusion of WBZ-FM Boston, partially offset by the disposition of WMJX-FM Boston and the Greenville-New Bern-Jacksonville stations. Net revenue for the three months ended June 30, 2018 was comparable to net revenue for the same period in 2017 at the Company's other market clusters.

Station Operating Income (SOI, a non-GAAP financial measure), increased 3.5% year-over-year in the second quarter of 2018. The increase in second quarter 2018 SOI reflects the higher net revenue during the period which more than offset a 0.1% year-over-year increase in station operating expenses.

The year-over-year decrease in second quarter 2018 operating income to $10.7 million solely reflects the benefit in the year ago period of $2.9 million for items which did not recur in the second quarter of 2018 but raised second quarter 2017 operating income to $12.8 million.

Second quarter interest expense decreased approximately $0.9 million to $3.8 million with the reduction related to lower levels of borrowings and a lower cost of borrowings while income tax expense declined $2.3 million to $2.0 million. As a result of these factors, net income per diluted share increased to $0.18 per diluted share in the three months ended June 30, 2018 compared to $0.14 per diluted share in the three months ended June 30, 2017.

Commenting on the financial results, Caroline Beasley, Chief Executive Officer, said, "Beasley's second quarter results reflect our ongoing execution of strategies to drive revenue, productivity and growth across our local radio broadcasting and digital platforms. The 1% year-over-year increase in second quarter revenues combined with essentially flat station expenses and the operating leverage related to the top line growth resulted in a 3.5% increase in second quarter SOI. Overall, our second quarter results again demonstrate the efficiencies we are realizing related to our expanded scale and the operating leverage in our model, which collectively led to a 28.6% increase in earnings per share.

"Focusing on strong core programming and targeted original local content across all distribution platforms is the foundation of our operating strategy and has proven vital to the Company's long-term ratings strength and success. In this regard, we made notable progress on the continued buildout and enhancement of our digital platform during the second quarter, and we will be releasing phase two of our mobile apps upgrades in the second half of 2018. In addition, Beasley is in the process of rolling out a suite of data attribution products across our markets to provide brands and advertisers the tools they need to quantify the effectiveness and strong value of radio advertising.

"During the second quarter, Beasley remained committed to enhancing shareholder value through capital returns and capital structure improvements. In this regard, we declared our nineteenth consecutive quarterly cash dividend. In addition, interest expense decreased approximately 20% year-over-year to $3.8 million, reflecting the recent refinancing of our senior debt, which reduced our interest rate by 200 basis points. We used cash from operations to make voluntary debt repayments of $2.0 million in the second quarter and ended June 30, 2018 with total outstanding debt of $220.0 million.

"In July, we entered into a definitive agreement to acquire WXTU-FM in Philadelphia, PA from Entercom Communications Corp. for $38.0 million in cash in a transaction that is expected to be immediately accretive to Beasley's free cash flow, excluding one-time transaction costs. The Company intends to finance the acquisition with a combination of debt and cash from operations. We believe the acquisition of WXTU-FM represents a strategically and financially compelling growth opportunity for our shareholders and further enhances our revenue and competitive position with a strong cluster of five FM and two AM stations in a key, top-ten market. Beasley began operating the station under a local marketing agreement on July 23, and the transaction is expected to close during the late third quarter or fourth quarter of 2018.

"Looking ahead, Beasley's ongoing diversification and commitment to local content, innovation and growth has positioned us to capitalize on the many opportunities to serve listeners and businesses in our local markets in the second half of 2018. We look forward to realizing the strategic benefits of our recent transactions and intend to continue our strategic priorities of reducing debt and leverage, taking advantage of political revenue opportunities, improving top- and bottom-line performance and returning capital to shareholders through our quarterly cash dividend. We also remain focused on our station clusters matching or exceeding their market's revenue performance and pursing other initiatives that can enhance shareholder value."

The Company will host a conference call and webcast today, August 3, 2018, at 10:30 a.m. ET to discuss its financial results and operations. To access the conference call, interested parties may dial 719/325-4768, conference ID 9601913 (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.