A total of $1.8M less revenue came in the doors of Beasley Broadcast Group radio business interests in Q4 2011, but a significant decrease in interest expense allowed it to register a 1.7% gain in net income. Station operating income fell $1M to $9.4M, a 9.5% drop. Loss of political and national revenue was tagged with the blame for the reduced total income. Nevertheless, net income per diluted share Q4 over Q4 held steady at $0.15.
Commenting on the results, Chairman/CEO George G. Beasley, Chairman and Chief Executive Officer, commented on the results, “Radio advertising remained relatively stable despite widespread economic concerns and volatility in the capital markets throughout the year. Importantly, during the fourth quarter and throughout 2011, we continued to make progress across the organization in enhancing operating efficiencies and maintaining a disciplined approach to spending. Overall, the industry recorded seven consecutive quarters of growth through the third quarter of 2011 which underscores our belief that radio remains both resilient and highly relevant in a digital world.”
Beasley blamed the lack of political revenue during the off-election year accounted for about a third of the group’s drop in net revenue. It combined with softness in national business and what he called “several unique national advertising issues” which he says were either one-timers or have been addressed.
Like most groups operating in the prolonged economic slump, corporate austerity policies are in play at BBG. “However, even during periods of lower revenue, our bottom line continues to benefit from our streamlined cost and operating structure,: said Beasley. “In light of the challenges faced during the quarter, we lowered station operating expenses by 5% while total operating expenses for the quarter were also reduced by 5% on a year-over-year basis. These factors, combined with a significant reduction in interest expense, led to a 1.7% increase in 2011 fourth quarter net income.”
Discussing total 2011 results, Beasley said, “Excluding the impact of political, revenue would have increased on a full year basis. Through active management of station operating expenses, which we reduced by 1.9% in 2011, SOI rose by 2.9% in 2011 compared with 2010. In addition, 2011 net income rose 26% over 2010 levels and reflecting our ongoing focus on costs and efficiencies, we increased SOI margins to 35%, from 34% in 2010.
Beasley briefly discussed the group’s plans for 2012. He said, “Looking forward, we remain focused on our station clusters matching or exceeding their market’s revenue performance, and further strengthening the balance sheet through reductions in borrowings. We have strong station clusters and ratings in key markets and we are highly focused on generating profitable station and digital revenue growth. We also continue to actively evolve the company through the deployment of relevant technologies as we expanded our digital capabilities and offerings and launched a new app for Android devices. We believe our concurrent focus on our core content and new media opportunities allows us to best address both current and prospective radio users. We also believe our platform is emerging as a high value media buy for advertisers and a primary source of on-air, online and mobile entertainment for consumers, which in turn is expected to generate new value for shareholders. In addition, we expect a return of political spending in 2012 with several of our markets expected to benefit from contested elections.”