Good day, and welcome to this Beasley Broadcast Group 2015 First Quarter Results Conference Call. Today's call is being recorded. At this time, I would like to turn the call over to Ms. Caroline Beasley. Please go ahead, ma'am. .

Thank you, Cynthia. Good morning, and welcome to the Beasley Broadcast Group First Quarter Webcast.

Before beginning, I'd like to emphasize that this webcast will contain forward-looking statements about our future performance and results of operations that involve risks and uncertainties described in the Risk Factors section of our most recent Form 10-K.

Today's webcast will also contain a discussion of certain non-GAAP financial measures within the meaning of Item 10 of Reg S-K. A reconciliation of these non-GAAP measures with their most directly comparable financial measures calculated and presented in accordance with GAAP can be found in this morning's press release. .

I'd also remind listeners that following its completion, a replay of today's webcast can be accessed for 5 days on our website.

As on our past 2 webcasts, I'll remind everyone that on December 1, 2014, we swapped 5 radio stations, including 2 in Philly and 3 in Miami, for a total of 14 CBS stations, including 7 in Charlotte, 6 in Tampa and 1 in Philly.

As a result of the transaction, on a GAAP basis, we're required to report the 5 stations that CBS assumed ownership of under discontinued operations on the income statement despite having operated them in the first quarter of '14. As such, we again provided added disclosures in today's press release. .

So for the quarter, on a continuing operations basis, net revenue increased $11.3 million and SOI increased $3.1 million. This reflects revenue from Tampa and Charlotte for the quarter, which was not included in the first '14 -- first quarter of '14 results, and it excludes the stations we swapped with CBS. .

Now on a combined continuing and discontinued ops basis for the quarter, revenue was flat, station operating expenses increased $700,000 or about 4% and SOI declined $680,000 or 9.6%.

The expense increase is due to the higher operating expenses in Charlotte and Tampa in the first quarter of this year compared with Philly and Miami in the first quarter of '14. .

Now on a pro forma basis for the quarter, revenue was down 10% to $24.3 million and SOI decreased 12% to $6.3 million. The revenue decline is primarily attributable to the Tampa and Charlotte clusters, which experienced overall market ad softness, and our Wilmington cluster. .

According to Miller Kaplan, the Charlotte market was down 7.1% for the quarter compared with our cluster decreasing 17.3%. The Tampa market declined 4.2% compared with our cluster, down 11.2%. Our underperformance in these markets reflects several transitional factors. First, with our focus on local content, we reduced units in both markets.

We've not yet generated the revenue rebound following this reduction. Second, there was approximately $1 million in total revenue directly related to CBS that did not recur due to the change in ownership, and approximately $700,000 of this $1 million was national.

Third, the transition of our traffic, inventory management and other systems to the Charlotte and Tampa clusters took longer than anticipated, and this caused added disruption in the first quarter. .

Now with respect to SOI, we partially offset the revenue decline through several significant cost reductions that are being implemented in these markets. In the first quarter, station operating expenses in these 2 markets on a combined basis declined approximately $1.3 million or 13% and by a total of $1.9 million or 10% for the entire company.

While we're slightly behind where we anticipated being with the transition for first quarter, we remain positive about the swap and believe we will see the benefits of our integration and efficiency strategies in the coming quarters. Overall, we have 6 markets that report to Miller Kaplan, and these markets account for about 85% of our total revenue.

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In the first quarter, our markets were down 2.5% compared to our clusters being down 10%, and this is on a pro forma basis. As explained before, the revenue decline was largely attributable to some specific issues that we're working through in Charlotte and Tampa.

Now on a positive note, our Fort Myers-Naples cluster increased revenue by almost 8% for the quarter, and that compares to the market which was up 4%. .

Now when you take a look at our local and national revenue according to Miller Kaplan in these markets, our local revenue was down approximately 1% compared with national being down approximately 25%, with almost half of this decline coming from the CBS cash infusion last year. Now given the swap, category comps are difficult.

On an actual-over-actual basis, consumer services, auto, entertainment and retail were all up. However, we saw a decline of almost $1 million in telecom in the first quarter. .

Now moving on to the ratings. In our largest market, Tampa, WiLD continues to dominate, where it remains #1 in its target demo of persons 18-34. Like many other country stations around the country, WQYK cooled off during the quarter, and Q105 saw the largest increase of share in the history of the station in PPM, rising 20% from quarter-to-quarter.

Our Spanish CHR station, WYUU, was again down slightly. Now we are several months into the format change with WBRN. The station is anchored by Tampa-based leading morning show personality, Bubba the Love Sponge. And in the first quarter, we saw an incredible 150% ratings increase on the station. .

Moving on to Charlotte. We have the #1 station in the 3 most important demos, persons 18-34, persons 18-49 and persons 25-54, with our urban station WPEG. WSOC remains the #1 country outlet in the market, and our AC station increased its share and rank from quarter-to-quarter.

Our top 40 station, Kiss 95.1, saw the most growth this quarter with a 35% share increase with adults 25-54. And our sports station, FNZ is the #1 all-sports outlet in the market. .

Finally, the weak spot in our Charlotte cluster is the urban AC-formatted station, WBAD, and we expect this station to improve going forward as we just hired a new program director for that station. .

Moving out west to Vegas. It was a challenging quarter overall for the cluster, which can be primarily attributed to a format change on KVGS, where we flipped the station from adult hits to hot AC. However, our flagship and #1 billing station, Classic Hits KKLZ, was top 5 in persons 25-54, along with our urban oldies station, KOAS. .

And finally, in our only diary market that is rated during the first quarter was a banner book for the Coastal Carolina market. The most notable growth came through our hot AC-formatted station, MGV [ph], which grew an incredible 78% among adults 25-54 and tied for second.

The #1 station in the market was our urban station, WIKS, and this station captured #1 in all major demos. Overall, our share in the market is nearly 38%. .

Now turning back to the financials. Interest expense for the quarter decreased approximately 23%, and this reflects both the lower cost of borrowing and the reduction in principal compared to Q1 of '14. And for the quarter, our effective tax rate was approximately 38%. .

Turning to the balance sheet. We made repayments against our debt of $1.5 million, and our total debt outstanding was $96.2 million. The latest trailing 12-month consolidated operating cash flow was $26.5 million, with our total leverage ratio at the end of the quarter at 3.62x.

We do receive the benefit of up to $10 million of cash on hand in calculating net leverage, and so our net leverage at the end of the quarter was just under 3.25x. Cash on hand at the end of the quarter was $12.3 million, and we spent about $0.5 million in capital in the quarter. .

So in closing, I'd like to quickly review our strategic priorities for '15. First, the station exchange completed in '14 substantially broadened and diversified our local radio and marketing solutions platform and our revenue base. And the stations that were added are geographically complementary to our continuing operations.

Since closing, we've been initiating strategies to extract financial and operating synergies from the exchange. From a financial standpoint, we plan to further reduce the company's debt, and overall, we believe this transaction represents a unique and innovative means for our company to enhance shareholder value on a mid- and long-term basis. .

Looking elsewhere across our portfolio, we generated double-digit increases in our digital revenue for the quarter when comparing continued and discontinued ops with actual quarter-over-quarter results.

We're focused on developing our event marketing and NTR revenue plans and expect growth in this area, particularly given the local relationships that we have in our markets.

As always, our long-term performance demonstrates that our focus on core programming and targeted localism are supporting the tremendous ratings strength, which is clearly evident from the ratings results that I just shared with you. And while generally, revenue is not performing in line with the ratings, we fully expect this to occur in the future.

We believe this focus and the application of our commitment to localism is the best means of improving revenue share across our platform and enhancing shareholder value. .

And so on behalf of our corporate and station personnel, I'd like to thank you very much for dialing in today. And please feel free to give me a call with any questions. Thank you very much. .

This concludes today's conference call. We thank you for your participation..