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Beasley Broadcast Group Inc. Reports Operating Results (10-Q)

November 09, 2009 | About:
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10qk

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Beasley Broadcast Group Inc. (BBGI) filed Quarterly Report for the period ended 2009-09-30.

Beasley Broadcast Group is one of the largest radio broadcasting company'sin the United States. The company's stations are located in large and midsized markets in the eastern United States. The radio stations program a variety of formats, including urban, contemporary hit radio and country, which target the demographic groups in each market that the company considers the most attractive to the advertisers. Beasley Broadcast Group Inc. has a market cap of $77.09 million; its shares were traded at around $3.4001 with a P/E ratio of 26.15 and P/S ratio of 0.63.

Highlight of Business Operations:

Cost of Services. The $5.1 million decrease in cost of services during the nine months ended September 30, 2009 was primarily due to cost containment measures in response to the decrease in net revenue. Cost of services decreased at all of our market clusters including a decrease of $2.1 million at our Miami-Fort Lauderdale market cluster, $0.9 million at our Las Vegas market cluster, $0.6 million at our Philadelphia market cluster, and $0.5 million at our Fort Myers-Naples market cluster.

Selling, General and Administrative Expenses. The $7.8 million decrease in selling, general and administrative expenses during the nine months ended September 30, 2009 was primarily due to a decrease in sales commissions resulting from the decrease in net revenue and cost containment measures. Selling, general and administrative expenses decreased at ten of our eleven market clusters and was comparable to 2008 at the remaining market cluster. Selling, general and administrative expenses decreased $2.6 million at our Miami-Fort Lauderdale market cluster, $1.6 million at our Philadelphia market cluster, $0.9 million at our Las Vegas market cluster, $0.8 million at our Fayetteville market cluster, $0.6 million at our Fort Myers-Naples market cluster, and $0.6 million at our Greenville-New Bern-Jacksonville market cluster.

Prior to March 13, 2009, our credit facility permitted us to repurchase up to $50.0 million of our common stock and on June 10, 2004, our board of directors authorized us to repurchase up to $25.0 million of our Class A common stock over a one-year period from the date of authorization, which was extended on May 12, 2005 for one additional year. On May 24, 2006, our board of directors authorized us to increase the remaining balance under our previous authorization from $21.3 million to $25.0 million and to extend the repurchase period to May 23, 2007. Effective May 24, 2007, our board of directors authorized the extension of the repurchase period for one additional year. Effective May 24, 2008, our board of directors authorized the extension of the repurchase period for one additional year. Effective March 13, 2009, our credit facility prohibits us from repurchasing additional shares of our common stock until our consolidated total debt is less than 5.00 times our consolidated operating cash flow at which time we are permitted to repurchase up to an aggregate of $10.0 million of our common stock. We are permitted to repurchase up to $0.5 million of our common stock per year in connection with vesting of restricted stock. From June 10, 2004 to November 5, 2009, we repurchased 2.6 million shares of our Class A common stock for an aggregate $13.9 million.

receipts from the sale of advertising airtime, a $1.0 million decrease in cash refunded for income taxes, and a $0.5 million increase in cash paid for interest. This decrease was partially offset by a $12.6 million decrease in cash paid for station operating expenses, and a $0.7 million decrease in cash paid for corporate general and administrative expenses.

Net Cash Used In Financing Activities. Net cash used in financing activities in the nine months ended September 30, 2009 was primarily due to scheduled repayments of $2.7 million and voluntary repayments of $17.9 million under our credit facility, and payments of $0.8 million of loan fees related to the amended credit facility. Net cash used in financing activities for the same period in 2008 was primarily due to voluntary repayments of $12.0 million under our credit facility, cash dividends of $4.4 million, and $0.8 million for repurchases of our Class A common stock.

Credit Facility. As of October 31, 2009, the outstanding balance of our credit facility was $153.8 million. As of September 30, 2009, the credit facility consists of a revolving credit loan with a maximum commitment of $65.0 million and a term loan with a remaining balance of $98.0 million. The revolving credit loan includes a $7.5 million sub-limit for letters of credit which may not be increased. At our election, the revolving credit loan and term loan may bear interest at either the base rate or LIBOR plus a margin that is determined by our debt to operating cash flow ratio. The base rate is equal to the higher of the prime rate, the federal funds effective rate, or the one month LIBOR quoted rate plus 1.0%. Interest on base rate loans is payable quarterly through maturity. Interest on LIBOR loans is payable on the last day of the selected LIBOR period and, if the selected period is longer than three months, every three months after the beginning of the LIBOR period. The revolving credit loan and term loan carried interest, based on LIBOR, at 4.1955% and 4.2744% as of December 31, 2008 and September 30, 2009, respectively, and mature on June 30, 2015. The scheduled reductions in the amount available under the revolving credit loan may require principal repayments if the outstanding balance at that time exceeds the maximum amount available under the revolving credit loan. In connection with the amended credit facility, we recorded a $0.5 million loss on extinguishment of long-term debt during the first quarter of 2009.

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