Caroline Beasley - EVP, Secretary, Treasurer and CFO.

Good day, and welcome to the Beasley Broadcast Group 2016 First Quarter webcast call. Today's conference is being recorded. At this time, I would like to turn the conference over to Caroline Beasley. Please go ahead..

Thank you, Anthony and good morning. 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 risk 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 news announcement and on our Web site.

I'd also remind listeners that following its completion, a replay of today's webcast can be accessed for five days on our Web site. So I'm pleased to report that we had a very solid quarter.

And this is the first quarter since Q3 ’14 where we are not reporting discontinued ops and pro forma results and have actual results that represent the same stations operated in the first quarter of both ’15 and ’16. So for the quarter, revenue increased $3.2 million, or 13.2% and SOI increased $1 million, or 16%.

The revenue increase was primarily generated from our Tampa and Charlotte clusters where we've been actively addressing operations since the completion of the asset exchange with CBS in 2014.

Of the $3.2 million increase in first quarter revenue, approximately $700,000 was from political spending in our markets with Charlotte, Tampa, and Vegas seeing the majority of this amount. But even absent the political contribution, we drove nice organic revenue growth during the quarter.

Also, I'm pleased to report that we outperformed our markets in terms of revenue growth. According to Miller Kaplan, our clusters increased approximately 13.9% compared with the overall markets, which rose 5.8%. It's great to see radio as whole generating healthy revenue growth.

Our outperformance was driven by our Tampa cluster, which generated quarter-over-quarter revenue increases of over 30% compared with the Tampa market, which was up and impressive 12%. In addition to Tampa, our Augusta, Fort Myers, Greenville-New Bern, Charlotte, and Vegas clusters all outperformed their respective markets.

Our station operating expenses for the quarter increased 12.2%. The expense increase reflects higher commissions related to higher revenue, bonuses, promotions, and event and concert expenses. Moving on to the ratings. First quarter again brought year-over-year ratings growth in our PPM markets.

Overall, our PPM markets were up by an average of 4% with adults 25-54 and prime, and 6.6% with adults 18-49 from Q1 ’15 to Q1 ’16. In our largest market, Tampa, we have two out of the top five stations with adults 25-54 and prime. Overall, our Tampa market ratings grew by over 11% year over year.

We have the number one stations with persons 18/34 with our rhythmic CHR station. And our top performing station this quarter was the country station, WQYK, which was second in persons 25-54.

Q105, our classic hits station, is now ranked fourth with adults 25/54, and our Spanish CHR station, WYUU, actually saw the largest year-over-year growth in the Tampa cluster with a 49% increase with persons 25 to 54. Moving to Charlotte, we have three out of the top five stations with adults 25-54.

The largest is country, WSOC, which is number two in the market. Our AC station, WKQC, remained very competitive and is third with persons 25-54. And our urban AC station is fourth. The only Beasley station in Charlotte that saw year-over-year decline is our urban station, PEG, which was down due to two new urban competitors in Charlotte.

So overall, this remains an incredibly healthy cluster for our Company. In Vegas, it's been a terrific quarter of growth both year over year and on a quarterly sequential basis. Vegas is up almost 6% in the first quarter compared to last year with adults 25-54, and is up 28% with adults 18-49.

Our top performing station is KKLZ, which is ranked second with persons 25-54. And our country station, KCYE, is making nice progress with a 58% quarterly sequential share increase with adults 25-54. And our new hot AC station, KBGF, saw a 17% quarterly sequential share rise.

Our urban oldies station, KOAF, did take a step back this quarter, dropping outside of the top 10 as we've recently launched a new morning show. We only have one of our diary markets that is Nielsen measured for the winter book, and that is Greenville-New Bern, and Jacksonville.

And once again, we are the dominant cluster in this market with four out of the top six stations with adults 25-54 and 18-49, including the number one station, WIKS. So, turning back to the financials. For interest expense, that increased approximately $40,000, or 4%, for the quarter.

And this reflects higher LIBOR rates and an increase in the spread from 1Q ’15. Our effective tax rate was 41%. And then turning to the balance sheet, during the quarter, we made repayments totalling $3 million against our debt. And that was reduced to $86 million at the end of the quarter.

The latest trailing 12-month operating cash flow was $24.7 million. And our total leverage ratio at the end of the quarter was 3.47 times. Our credit agreement does allow us to receive the benefit of up to $12.5 million of cash on hand. So in calculating net leverage, our net leverage was at 2.97 times.

So we're very happy to be below 3 times in terms of net leverage. This compares to our covenant of 4.5 times. Cash on hand at the end of the quarter was $15.6 million. And we spend approximately $656,000 in capital for the quarter.

Before closing, I'd like to make a few comments about the strength of radio as a medium, after which I'll quickly review our strategic priorities for ’16. As I said earlier in the call, for our six markets that report to Miller Kaplan, radio revenue rose 5.8%.

And while even-year political advertising surely helped, I expect that, like Beasley, other operators also benefited from organic growth. And we saw this earlier this week from Intercom's report as well. There have been several key studies released over the past few months that speak to the importance of radio in the media mix and media buys.

For example, the Advertising Research Foundation recently released a study that found that adding radio spots to a TV-only campaign resulted in a 20-plus% rise in ROI. The study concluded that traditional media remains extremely influential with consumers and valuable to any media campaign.

Notably, this research illustrated that the most effective media mix in terms of ROI was 70% to 80% traditional and 20% to 30% digital. Another study that demonstrates radio's incredibly broad usage and important component to consumer purchase decisions is the just-released data from USA TouchPoints.

And we're also getting better positioned to realize additional political spend as Nielsen is releasing political ratings which provide the industry with the ability to offer smarter, more targeted impressions. Research like this provides advertisers and brand managers with the data and perspective to make informed decisions about their media buy.

And we remain excited about the continued value of radio to their campaigns. Now getting back to our priorities, the station exchange completed in late ’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 operations.

Since closing, we've been initiating strategies to extract financial and operating synergies from the exchange. And at the time we announced the exchange, we indicated that we expected the transaction to be accretive to our SOI in the first 18 months of ownership. And I'm happy to report that we exceeded our expectations.

And as reflected by the first-quarter results announced today, the transaction is accretive after 16 months of ownership. Looking elsewhere across our portfolio, we remain focused on leveraging our local content through the further development of our digital and event marketing NTR activity and expect growth in this area.

As always, our long-term performance demonstrates that our focus on core programming and targeted localism are supporting the ratings strength. And in addition, we're pleased to report that our revenue is now performing in line with our ratings, as this is the first quarter in over a year that our clusters outperformed our markets.

And from a financial standpoint, we plan to further reduce to Company's debt. And overall, the asset exchange is now de-leveraging and represents a very unique and innovative means for our Company to enhance shareholder value. In addition, we continue to explore other avenues of growth by the Company.

With that, I'd like to thank our employees for a job well done for the quarter, and specifically want to thank Bruce and Brian for all their help. And I appreciate you all calling in today. And should you have any questions, please feel free to call. So thank you very much..

That does conclude today's conference. Thank you for your participation..

End of Q&A:.