EX-99.2 4 d876666dex992.htm UNAUDITED PRO FORMA FINANCIAL INFORMATION Unaudited Pro Forma Financial Information

Exhibit 99.2

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

On December 1, 2014, certain affiliates of Beasley Broadcast Group, Inc. (the “Company”) and CBS Radio Stations, Inc. (“CBS Radio”) completed an exchange of all of the assets used or useful in the operation of the radio stations WRDW-FM and WXTU-FM in Philadelphia, Pennsylvania and WKIS-FM, WPOW-FM and WQAM-AM in Miami, Florida previously owned and operated by the Company for all of the assets used or useful in the operation of the radio stations WIP-AM in Philadelphia, WHFS-AM, WHFS-FM, WLLD-FM, WQYK-FM, WRBQ-FM and WYUU-FM in Tampa, Florida and WBAV-FM, WBCN-AM, WFNZ-AM, WKQC-FM, WNKS-FM, WPEG-FM and WSOC-FM in Charlotte, North Carolina (the “Assets Acquired”) previously owned and operated by CBS Radio pursuant to the Asset Exchange Agreement (the “Agreement”).

Unaudited Pro Forma Condensed Consolidated Financial Statements

The unaudited pro forma condensed consolidated financial statements being presented under Item 9.01(a) are Special Purpose Statements of Direct Revenues and Expenses and Special Purpose Statements of Assets Acquired, which are in abbreviated format and are presented in lieu of the financial information otherwise required by Rule 8-04 of Regulation S-X, as a result of a letter from the Securities and Exchange Commission, dated November 21, 2014, stating no objections to provision of the above described abbreviated financial statements, as more specifically outlined in this letter. Note 2 to the financial statements attached hereto as Exhibit 99.1 provides further information regarding the reasons for which abbreviated financial statements are presented and how the financial statements are not necessarily indicative of the results of the Assets Acquired in the future.

The unaudited pro forma condensed consolidated financial statements reflect the disposition of the assets used or useful in the operation of the radio stations WRDW-FM and WXTU-FM in Philadelphia, Pennsylvania and WKIS-FM, WPOW-FM and WQAM-AM in Miami, Florida previously owned and operated by the Company and the acquisition of the assets used or useful in the operation of the radio stations WIP-AM in Philadelphia, WHFS-AM, WHFS-FM, WLLD-FM, WQYK-FM, WRBQ-FM and WYUU-FM in Tampa, Florida and WBAV-FM, WBCN-AM, WFNZ-AM, WKQC-FM, WNKS-FM, WPEG-FM and WSOC-FM in Charlotte, North Carolina previously owned and operated by CBS Radio.

The unaudited pro forma condensed consolidated financial statements have been prepared based on estimates and assumptions, which management believes are reasonable. The unaudited pro forma condensed consolidated balance sheet assumes that the dispositions and acquisitions occurred on September 30, 2014. The unaudited pro forma condensed consolidated statement of operations for the nine months ended September 30, 2014 assumes that the dispositions and acquisitions occurred on January 1, 2014. The unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2013 assumes that the dispositions and acquisitions occurred on January 1, 2013.

The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company included in the Company’s Quarterly Report on Form 10-Q for the nine months ended September 30, 2014 and the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. The unaudited pro forma condensed consolidated financial statements are not necessarily indicative of what would have occurred had the dispositions and acquisitions been completed on the above dates or of results that may occur in the future.

Pro Forma Adjustments

Balance Sheet as of September 30, 2014

 

  (a) Represents the elimination of certain prepaid expenses in Miami and Philadelphia as a result of the asset exchange.

 

  (b) Represents the preliminary purchase price allocation for the assets acquired from CBS Radio in Philadelphia, Tampa, and Charlotte.

 

  (c) Represents the elimination of the assets held for sale in Miami and Philadelphia which consisted of property and equipment of $3.3 million, FCC broadcasting licenses of $77.2 million, and goodwill of $6.6 million.

 

  (d) Represents the elimination of certain current liabilities in Miami and Philadelphia as a result of the asset exchange.


  (e) Represents the increase in deferred tax liabilities as a result of the asset exchange.

 

  (f) Represents the estimated gain on exchange of radio stations, net of income taxes.

Statements of Operations for the Nine Months ended September 30, 2014

 

  (a) The Company reported the results of operations from the dispositions in Miami and Philadelphia as discontinued operations in the Quarterly Report on Form 10-Q for the nine months ended September 30, 2014. Therefore, no adjustments were required for the dispositions in Miami and Philadelphia.

 

  (b) Represents the results of operations from the acquisitions from CBS Radio in Philadelphia, Tampa, and Charlotte for the nine months ended September 30, 2014.

 

  (c) Represents an estimate of depreciation expense on the assets acquired from CBS Radio in Philadelphia, Tampa, and Charlotte for the nine months ended September 30, 2014.

 

  (d) The Company did not incur any new indebtedness or extinguish any existing indebtedness as a result of the transaction. Therefore, no interest adjustment was required as a result of the dispositions in Miami and Philadelphia or the acquisitions from CBS Radio in Philadelphia, Tampa, and Charlotte.

 

  (e) Tax expense was estimated using a blended effective rate of 39.16% for the nine months ended September 30, 2014.

Statements of Operations for the Year ended December 31, 2013

 

  (a) Represents the results of operations from the dispositions in Miami and Philadelphia for the year ended December 31, 2013.

 

  (b) Represents the results of operations from the acquisitions from CBS Radio in Philadelphia, Tampa, and Charlotte for the year ended December 31, 2013.

 

  (c) Represents an estimate of depreciation expense on the assets acquired from CBS Radio in Philadelphia, Tampa, and Charlotte for the year ended December 31, 2013.

 

  (d) The Company did not incur any new indebtedness or extinguish any existing indebtedness as a result of the transaction. Therefore, no interest adjustment was required as a result of the dispositions in Miami and Philadelphia or the acquisitions from CBS Radio in Philadelphia, Tampa, and Charlotte.

 

  (e) Tax expense was estimated using a blended effective rate of 38.36% for the year ended December 31, 2013.


BEASLEY BROADCAST GROUP, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

SEPTEMBER 30, 2014

 

     Reported     Exchange     Pro Forma  
ASSETS       

Current assets:

      

Cash and cash equivalents

   $ 13,221,201      $ —        $ 13,221,201   

Accounts receivable, less allowance for doubtful accounts of $420,915

     16,363,114        —          16,363,114   

Prepaid expenses

     2,600,658        (282,536 ) (a)      2,318,122   

Deferred tax assets

     252,294        —          252,294   

Other current assets

     2,339,692        —          2,339,692   
  

 

 

   

 

 

   

 

 

 

Total current assets

  34,776,959      (282,536   34,494,423   

Notes receivable from related parties

  1,840,064      —        1,840,064   

Property and equipment, net

  17,896,147      10,517,045  (b)    28,413,192   

FCC broadcasting licenses

  109,116,730      125,211,600  (b)    234,328,330   

Goodwill

  7,062,310      1,795,206  (b)    8,857,516   

Other intangibles, net

  —        1,507,512  (b)    1,507,512   

Assets held for sale

  86,989,604      (86,989,604 ) (c)    —     

Other assets

  6,034,429      —        6,034,429   
  

 

 

   

 

 

   

 

 

 

Total assets

$ 263,716,243    $ 51,759,223    $ 315,475,466   
  

 

 

   

 

 

   

 

 

 
LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Current portion of long-term debt

$ 3,112,500    $ —      $ 3,112,500   

Accounts payable

  1,118,205      —        1,118,205   

Other current liabilities

  8,454,678      (1,579,114 ) (d)    6,875,564   
  

 

 

   

 

 

   

 

 

 

Total current liabilities

  12,685,383      (1,579,114   11,106,269   

Long-term debt, net of current portion

  95,859,375      —        95,859,375   

Deferred tax liabilities

  56,840,129      19,699,486  (e)    76,539,615   

Other long-term liabilities

  779,770      —        779,770   
  

 

 

   

 

 

   

 

 

 

Total liabilities

  166,164,657      18,120,372      184,285,029   

Commitments and contingencies

Stockholders’ equity:

Preferred stock, $0.001 par value; 10,000,000 shares authorized; none issued

  —        —        —     

Class A common stock, $0.001 par value; 150,000,000 shares authorized; 9,280,121 issued and 6,449,217 outstanding

  9,280      —        9,280   

Class B common stock, $0.001 par value; 75,000,000 shares authorized; 16,662,743 issued and outstanding

  16,662      —        16,662   

Additional paid-in capital

  118,345,243      —        118,345,243   

Treasury stock, Class A common stock; 2,830,904 shares

  (15,107,464   —        (15,107,464

Retained earnings (accumulated deficit)

  (5,742,287   33,638,851  (f)    27,896,564   

Accumulated other comprehensive income

  30,152      —        30,152   
  

 

 

   

 

 

   

 

 

 

Total stockholders’ equity

  97,551,586      33,638,851      131,190,437   
  

 

 

   

 

 

   

 

 

 

Total liabilities and stockholders’ equity

$ 263,716,243    $ 51,759,223    $ 315,475,466   
  

 

 

   

 

 

   

 

 

 


BEASLEY BROADCAST GROUP, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

NINE MONTHS ENDED SEPTEMBER 30, 2014

 

     Reported (a)     Acquisitions     Pro Forma  

Net revenue

   $ 40,143,834      $ 43,171,000  (b)    $ 83,314,834   
  

 

 

   

 

 

   

 

 

 

Operating expenses:

Station operating expenses (including stock-based compensation of $175,558 and excluding depreciation and amortization shown separately below)

  28,089,890      31,369,000  (b)    59,458,890   

Corporate general and administrative expenses (including stock-based compensation of $919,047)

  6,812,207      —        6,812,207   

Depreciation and amortization

  1,436,537      516,000  (c)    1,952,537   
  

 

 

   

 

 

   

 

 

 

Total operating expenses

  36,338,634      31,885,000      68,223,634   
  

 

 

   

 

 

   

 

 

 

Operating income

  3,805,200      11,286,000      15,091,200   

Non-operating income (expense):

Interest expense

  (3,404,616   —    (d)    (3,404,616

Loss on extinguishment of long-term debt

  (30,569   —        (30,569

Other income (expense), net

  302,081      —        302,081   
  

 

 

   

 

 

   

 

 

 

Income from continuing operations before income taxes

  672,096      11,286,000      11,958,096   

Income tax expense

  834,353      4,420,000  (e)    5,254,353   
  

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations

  (162,257   6,866,000      6,703,743   
  

 

 

   

 

 

   

 

 

 

Net income (loss) per share:

Basic

$ (0.01 $ 0.29   

Diluted

$ (0.01 $ 0.29   

Weighted average shares outstanding:

Basic

  22,807,413      22,807,413   

Diluted

  22,908,208      22,908,208   


BEASLEY BROADCAST GROUP, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 2013

 

     Reported     Dispositions     Acquisitions     Pro Forma  

Net revenue

   $ 104,905,720      $ (48,807,760 ) (a)    $ 58,295,000  (b)    $ 114,392,960   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses:

Station operating expenses (including stock-based compensation of $21,371 and excluding depreciation and amortization shown separately below)

  67,044,139      (29,790,863 ) (a)    43,488,000  (b)    80,741,276   

Corporate general and administrative expenses (including stock-based compensation of $671,724)

  8,624,395      —        —        8,624,395   

Other operating expenses

  185,916      —        —        185,916   

Depreciation and amortization

  2,220,641      (564,626 ) (a)    688,000  (c)    2,344,015   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

  78,075,091      (30,355,489   44,176,000      91,895,602   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

  26,830,629      (18,452,271   14,119,000      22,497,358   

Non-operating income (expense):

Interest expense

  (7,081,801   —        —    (d)    (7,081,801

Loss on extinguishment of long-term debt

  (1,260,784   —        —        (1,260,784

Other income (expense), net

  89,758      (9,314 ) (a)    —        80,444   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from continuing operations before income taxes

  18,577,802      (18,461,585   14,119,000      14,235,217   

Income tax expense

  7,031,539      (7,081,864 ) (e)    5,416,000  (e)    5,365,675   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from continuing operations

  11,546,263      (11,379,721   8,703,000      8,869,542   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income per share:

Basic

$ 0.51    $ 0.39   

Diluted

$ 0.51    $ 0.39   

Weighted average shares outstanding:

Basic

  22,735,774      22,735,774   

Diluted

  22,838,209      22,838,209