Beasley Broadcast Group reported a massive 112.4 percent increase in net revenue for the third quarter of 2017. This is primarily attributed to its acquisition of 18 stations from Greater Media in November of 2016.
The $31.2 million, or 112.4 percent, year-over-year increase in net revenue during Q3 of 2017 reflects the operation of stations in Boston, Philadelphia, Detroit and New Jersey acquired from Greater Media, partially offset by the disposition of the Charlotte and Greenville-New Bern-Jacksonville stations and the impact on the comparison of political revenue in last year’s third quarter. However, on a pro forma basis excluding the Greater Media stations, net revenue was essentially flat.
CEO Caroline Beasley commented, “The operating and financial benefits of the Greater transaction are becoming more visible as we continue making progress on our synergy realization and integration initiatives, which are focused on driving SOI margin expansion. Pro forma net revenues were flat compared to the prior year period, despite the non-recurrence of $0.6 million in political revenue, while we reduced pro forma station operating expenses by 5.2% or $2.3 million. As a result, Beasley generated a 16.9% increase in third quarter pro forma SOI with SOI margins reaching 27.9%, up 400 basis points from 23.9% in the year-ago period and up 130 basis points on a quarterly sequential basis from 26.6% in the 2017 second quarter.
“Throughout the third quarter, we continued to actively manage our local radio broadcasting platform while implementing our operating disciplines at the acquired Greater Media stations. We remain focused on strong local programming to support our goals of ratings and market leadership. Revenue at Beasley’s combined clusters rose 0.1% in the third quarter, outperforming the overall markets, which declined 0.8% according to Miller Kaplan. Of particular note, our Detroit cluster generated double-digit revenue increases and our Philadelphia cluster rebounded from a transition-related revenue decline earlier this year to an increase of 1% in the third quarter. These increases were offset by declines in our Tampa, Charlotte and Las Vegas clusters.
“Our total outstanding debt as of September 30, 2017, was approximately $219 million, compared to $225 million at June 30, 2017. We made voluntary debt repayments of $6.0 million in the third quarter, resulting in a total $49 million reduction in debt year-to-date. In addition, with our strong operating cash flows and commitment to return capital to shareholders, we declared our seventeenth consecutive quarterly cash dividend during the third quarter.
“Throughout 2017 and looking into 2018, we intend to continue our strategic priorities of achieving or exceeding the synergy targets and integration goals for the Greater Media acquired stations, reducing debt, leverage, and our cost of capital, returning value to our shareholders through our quarterly cash dividend program and further diversifying our revenue streams. We remain confident in the radio industry and believe that Beasley’s ongoing initiatives to drive sales, productivity and efficiency across our platform, combined with prudent management of our capital structure, is a proven formula for sustained long term financial growth and the creation of shareholder value.”