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 | |
