Change in company’s federal tax rate increases first quarter income tax expense by $1.3 million
Beasley Broadcast Group reported net revenue of $24.2 million for the first quarter of the year. The 2.4% decline from the same period a year ago reflects lower advertising revenue at its three largest markets — Miami, Fort Lauderdale, Fla., and Philadelphia, the company said.
Several factors impacted those markets, “including the severe winter weather which had a negative effect on our operations in the northeast,” said company Chairman and Chief Executive Officer George Beasley. The severe winter weather in the northeast “pressured billings, particularly among our local customers, and caused our stations to close for the equivalent of approximately three business weeks during the first quarter,” according to Beasley.
He attributed the dip in Miami primarily to a revenue decline at the company’s AM sorts talk format station following the departure of a popular afternoon host. Beasley has addressed the situation by relaunching its afternoon drive programming “with the addition of another highly-rated Miami sports talk show host from a direct competitor in the market,” said Beasley.
Lower net revenue in the 2014 first quarter and a $0.4 million or 2.4%, increase in station operating expenses caused first quarter 2014 station operating income to decrease by $1 million, or 12.2%, to $7.1 million, as compared to the 2013 first quarter. The broadcaster attributed the higher SOI to operating KVGS(FM), Las Vegas which was acquired in September 2013.
The $1.2 million, or 22.3% year-over-year reduction in 2014 first quarter operating income, is primarily attributable to the year-over-year revenue decline and a $0.6 million or 3.2% increase in total operating expenses, which included costs related to operating KVGS.
The broadcaster said a $0.8 million, or 40.2% year-over-year reduction in first quarter 2014 interest expense related to lower borrowing costs and reduced amounts outstanding, was more than offset by a $1.3 million, or 128.8%, rise in income tax expense primarily due to a change to the company’s federal income tax rate. In addition, the tax rate in the comparable year ago period benefited from a change to the company’s effective state tax rate. As a result, net income and net income per diluted share for the 2014 first quarter were $0.7 million and $0.03, respectively, compared with $2.4 million, and $0.11, respectively, in the comparable year ago period.