Beasley Broadcast Group’s acquisition of Greater Media last year led to some eye-popping revenue numbers from the broadcaster’s first quarter 2017 report today, the first full quarter financial brief for the combined companies. But a closer look seems to poke some holes in the Beasley balloon.
Net revenue was up a whopping $26.3 million, or 95.7% for the first quarter of 2017 ending March 31, according to Beasley’s earnings report. That top line revenue number includes the stations in Boston, Philadelphia, Detroit and New Jersey acquired from Great Media. However, on a standalone basis, revenue declined by $2.0 million or 7.6% for the Beasley legacy stations. The Greater Media properties had a 4.0% drop in revenue in Q1. Pro forma revenue was down 5.7% or about $3.3 million.
“Some of that decline is attributable to about a 35% drop, or about $1 million, in political advertising for the first quarter 2017,” said Caroline Beasley, CEO of Beasley Broadcast Group. The broadcaster closed its $240 million acquisition of Greater Media in November 2016.
Beasley disclosed today it completed the divestiture of three former Greater Media stations in Charlotte, N.C., in the first quarter with net proceeds totaling $24 million, which was put toward debt reduction. It also announced in February that it would sell its six legacy stations in Greenville-New Bern-Jacksonville, N.C., for $11 million. Once that sale closes, which is expected to be soon, it will leave Beasley with a total of 63 radio stations.
“With the financing of the Greater Media acquisition, our total outstanding debt as of March 31, 2017, was approximately $240 million, compared to $268 million at the end of 2016,” Beasley said.
Beasley’s Q1 net income was $7.5 million compared to net income of $1.8 million a year ago.
“This has been a busy quarter for us. We have spent a lot of time in the new Greater Media markets. The first quarter was a transitional period but integration is generally progressing as expected. We expect integration to be fully completed with the projected 12 to 18 months,” Caroline Beasley said to day on the earnings call.
Beasley’s newly acquired Philadelphia cluster continues to struggle with revenue down about 13%, in the first quarter, which reflects certain integration issues, Beasley says, including the loss of eight AEs about the time of closing.
Beasley Chief Financial Officer Marie Tedesco said revenue in Beasley’s combined clusters was down 5.5% compared with the overall markets, which declined 2.0%. “This was largely related to the specific challenges and weakness in national Philadelphia, Tampa and Las Vegas markets,” Tedesco said.
According to Miller Kaplan, Beasley’s revenue growth outperformed in markets such as Detroit, Augusta [Ga.], Charlotte, Fayetteville [N.C.] and Ft. Myers [Fla.]. “The performance in our Detroit market was particularly noteworthy where we generated a year-over-year revenue increase in the first quarter of over 23.5%. That compares to the overall market that was up 3.3%,” Tedesco said.