SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
------------------
FORM 8-K/A
CURRENT REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report:
April 6, 2001
BEASLEY BROADCAST GROUP, INC.
-----------------------------
(Exact Name of Registrant as
Specified in Charter)
0-29253
---------------------
(Commission File No.)
65-0960915
-------------
(IRS Employer
Identification No.)
DELAWARE
----------------------------
(State or Other Jurisdiction
of Incorporation)
3033 RIVIERA DRIVE, SUITE 200
NAPLES, FLORIDA 34103
---------------------
(Address of Principal
Executive Offices)
(941) 263-5000
-----------------------
(Registrant's telephone
number, including area code)
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
As of February 1, 2001, Beasley FM Acquisition Corp., an indirect
wholly-owned subsidiary of Beasley Broadcast Group, Inc. completed its
acquisition of all of the outstanding common stock of Centennial Broadcasting
Nevada, Inc. and all of the membership interests in Centennial Broadcasting,
LLC. On February 2, 2001, the filing date for the original Form 8-K, it was
impracticable for Beasley Broadcast Group, Inc. to provide the financial
statements and pro forma financial information required by Item 7(a) and Item
7(b). We are now amending the Form 8-K to provide the required financial
statements and pro forma financial information in accordance with Item 7(a)(4)
and Item 7(b)(2).
(a) Financial Statements of Centennial Broadcasting.
o Independent Auditors' Report of Deloitte & Touche LLP dated April 7,
2000
o Independent Auditors' Report of KPMG LLP dated March 22, 2001
o Combined Balance Sheets as of December 31, 1999 and 2000
o Combined Statements of Operations for the years ended December 31, 1999
and 2000
o Combined Statements of Equity for the years ended December 31, 1999 and
2000
o Combined Statements of Cash Flows for the years ended December 31, 1999
and 2000
o Notes to Combined Financial Statements
(b) Pro Forma Financial Information.
o Unaudited Pro Forma Condensed Consolidated Balance Sheet as of December
31, 2000
o Unaudited Pro Forma Condensed Consolidated Statement of Operations for
the year ended December 31, 2000
(c) Exhibits.
2.1* Equity Interest Purchase Agreement of Centennial Broadcasting Nevada,
Inc. and Centennial Broadcasting, LLC, dated June 2, 2000.
2.2** First Amendment to Equity Interest Purchase Agreement of Centennial
Broadcasting Nevada, Inc. and Centennial Broadcasting, LLC, dated June
2, 2000.
2.3*** Second Amendment to Equity Interest Purchase Agreement of Centennial
Broadcasting Nevada, Inc. and Centennial Broadcasting, LLC, dated June
2, 2000.
99.1*** Press Release regarding Equity Interest Purchase Agreement.
* Incorporated by reference to Beasley Broadcast Group, Inc.'s Current
Report on Form 8-K dated June 2, 2000
** Incorporated by reference to Beasley Broadcast Group, Inc.'s Current
Report on Form 8-K dated December 13, 2000
*** Incorporated by reference to Beasley Broadcast Group, Inc.'s Current
Report on Form 8-K dated January 31, 2001
INDEPENDENT AUDITORS' REPORT
Centennial Broadcasting, LLC
Centennial Broadcasting Nevada, Inc.:
We have audited the accompanying combined balance sheet of Centennial
Broadcasting, LLC and Centennial Broadcasting Nevada, Inc. (collectively
"Centennial Broadcasting" or the "Company") as of December 31, 1999, and the
related combined statements of operations, equity, and cash flows for the year
then ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, such combined financial statements present fairly, in all
material respects, the combined financial position of Centennial Broadcasting as
of December 31, 1999, and the combined results of its operations and its cash
flows for the year then ended in conformity with accounting principles generally
accepted in the United States of America.
/s/ Deloitte & Touche LLP
Winston-Salem, North Carolina
April 7, 2000
INDEPENDENT AUDITORS' REPORT
Centennial Broadcasting, LLC
Centennial Broadcasting Nevada, Inc.:
We have audited the accompanying combined balance sheet of Centennial
Broadcasting, LLC and Centennial Broadcasting Nevada, Inc. as of December 31,
2000, and the related combined statements of operations, equity and cash flows
for the year then ended. These combined financial statements are the
responsibility of the management of Centennial Broadcasting, LLC and Centennial
Broadcasting Nevada, Inc. Our responsibility is to express an opinion on these
combined financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the combined financial position of Centennial
Broadcasting, LLC and Centennial Broadcasting Nevada, Inc. as of December 31,
2000, and the results of their operations and cash flows for the year then
ended, in conformity with accounting principles generally accepted in the United
States of America.
/s/ KPMG LLP
Tampa, Florida
March 22, 2001
CENTENNIAL BROADCASTING, LLC AND
CENTENNIAL BROADCASTING NEVADA, INC.
COMBINED BALANCE SHEETS
DECEMBER 31,
-------------------------------
1999 2000
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 1,884,347 $ 1,622,989
Accounts receivable, less allowance for doubtful accounts
of approximately $143,000 in 1999 and $138,000 in 2000 3,527,395 2,947,119
Trade sales receivable 261,712 135,829
Prepaid expenses 187,745 1,049,636
------------ ------------
Total current assets 5,861,199 5,755,573
Property and equipment, net 4,123,724 3,756,784
Intangibles, net 63,737,471 61,806,005
Other assets 32,714 15,423
------------ ------------
Total assets $ 73,755,108 $ 71,333,785
============ ============
LIABILITIES AND EQUITY
Current liabilities:
Current installments of term loan $ 1,500,000 $ 4,750,000
Accounts payable 92,312 89,611
Accrued expenses 962,984 602,045
Trade sales payable 90,775 29,216
------------ ------------
Total current liabilities 2,646,071 5,470,872
Subordinated note payable 16,974,966 18,778,306
Revolving line of credit 1,500,000 2,500,000
Term loan, less current installments 18,500,000 14,500,000
Non-compete agreement 1,237,617 900,085
------------ ------------
Total liabilities 40,858,654 42,149,263
Common stock, no par value, 100,000 shares authorized,
751 issued and outstanding 751 751
Additional paid-in capital 8,740,928 8,740,928
Accumulated deficit (2,155,404) (2,843,121)
Members' equity 26,310,179 23,285,964
------------ ------------
Total equity 32,896,454 29,184,522
------------ ------------
Total liabilities and equity $ 73,755,108 $ 71,333,785
============ ============
SEE ACCOMPANYING NOTES TO COMBINED FINANCIAL STATEMENTS
CENTENNIAL BROADCASTING, LLC AND
CENTENNIAL BROADCASTING NEVADA, INC.
COMBINED STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31,
-------------------------------
1999 2000
------------ ------------
Revenues:
Broadcasting revenue $ 16,765,930 $ 17,841,832
Non-compete agreement income 337,532 337,532
------------ ------------
Total operating revenues 17,103,462 18,179,364
Costs and expenses:
Program and production 3,220,903 3,580,249
Sales and advertising 6,809,209 6,875,263
Station general and administrative 2,292,551 2,553,375
Corporate general and administrative 1,064,182 1,229,585
Depreciation and amortization 2,479,809 2,531,699
------------ ------------
Total costs and expenses 15,866,654 16,770,171
------------ ------------
Operating income 1,236,808 1,409,193
Other income (expense):
Interest expense (4,732,876) (5,168,830)
Expenses associated with unsuccessful merger (352,151) (20,486)
Other non-operating expenses -- (9,448)
Interest income 22,431 58,218
Other non-operating income 16,938 19,421
------------ ------------
Net loss $ (3,808,850) $ (3,711,932)
============ ============
SEE ACCOMPANYING NOTES TO COMBINED FINANCIAL STATEMENTS
CENTENNIAL BROADCASTING, LLC AND
CENTENNIAL BROADCASTING NEVADA, INC.
COMBINED STATEMENTS OF EQUITY
CENTENNIAL
BROADCASTING,
CENTENNIAL BROADCASTING NEVADA, INC. LLC
-------------------------------------------------------------- -----------
COMMON STOCK
---------------------------- ADDITIONAL ACCUMULATED MEMBERS' NET
SHARES AMOUNT PAID-IN CAPITAL DEFICIT EQUITY EQUITY
----------- ----------- ----------- ----------- ----------- -----------
Balances at December 31, 1998 750 750 8,730,929 (1,421,803) 27,885,428 35,195,304
Issuance of common stock 1 1 9,999 -- -- 10,000
Capital contributions -- -- -- -- 1,500,000 1,500,000
Net loss -- -- -- (733,601) (3,075,249) (3,808,850)
----------- ----------- ----------- ----------- ----------- -----------
Balances at December 31, 1999 751 751 8,740,928 (2,155,404) 26,310,179 32,896,454
Net loss -- -- -- (687,717) (3,024,215) (3,711,932)
----------- ----------- ----------- ----------- ----------- -----------
Balances at December 31, 2000 751 751 8,740,928 (2,843,121) 23,285,964 29,184,522
=========== =========== =========== =========== =========== ===========
SEE ACCOMPANYING NOTES TO COMBINED FINANCIAL STATEMENTS
CENTENNIAL BROADCASTING, LLC AND
CENTENNIAL BROADCASTING NEVADA, INC.
COMBINED STATEMENTS OF CASH FLOWS
YEAR ENDED DECEMBER 31,
-----------------------------
1999 2000
----------- -----------
Cash flows from operating activities:
Net loss $(3,808,850) $(3,711,932)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and amortization 2,479,809 2,531,699
(Gain) loss on sale of property and equipment (13,853) 24,909
Income from non-compete agreement (337,532) (337,532)
Payment-in-kind interest 1,934,966 1,803,340
Change in operating assets and liabilities:
(Increase) decrease in receivables (1,120,228) 949,884
Increase in prepaid expenses (26,965) (861,891)
(Increase) decrease in other assets (16,917) 17,291
Increase (decrease) in payables and accrued expenses 170,930 (668,924)
----------- -----------
Net cash used in operating activities (738,640) (253,156)
----------- -----------
Cash flows from investing activities:
Purchase of property and equipment (340,689) (214,868)
Proceeds from sale of property and equipment 28,980 --
Non-compete agreement (23,333) (43,334)
----------- -----------
Net cash used in investing activities (335,042) (258,202)
----------- -----------
Cash flows from financing activities:
Net borrowings from revolving line of credit 500,000 1,000,000
Principal payments on term loan -- (750,000)
Deferred loan costs (13,490) --
Capital contributions 1,500,000 --
Proceeds from issuance of common stock 10,000 --
----------- -----------
Net cash provided by financing activities 1,996,510 250,000
----------- -----------
Net increase in cash and cash equivalents 922,828 (261,358)
Cash and cash equivalents at beginning of period 961,519 1,884,347
----------- -----------
Cash and cash equivalents at end of period $ 1,884,347 $ 1,622,989
=========== ===========
Cash paid for interest $ 2,670,615 $ 3,365,972
=========== ===========
SEE ACCOMPANYING NOTES TO COMBINED FINANCIAL STATEMENTS
CENTENNIAL BROADCASTING, LLC AND
CENTENNIAL BROADCASTING NEVADA, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS
(1) NATURE OF BUSINESS
Centennial Broadcasting, consisting of Centennial Broadcasting, LLC and
Centennial Broadcasting Nevada, Inc. (collectively the "Company") began
operations on March 11, 1997. On February 28, 1998, Centennial Broadcasting
Nevada, Inc. transferred its assets to Centennial Broadcasting, LLC in exchange
for a 41% equity investment in Centennial Broadcasting, LLC. Net income (loss)
allocated to Centennial Broadcasting Nevada, Inc. represents its proportional
share of equity of combined income (losses) of Centennial Broadcasting, LLC. Net
income (loss) of Centennial Broadcasting, LLC is allocated to the members in
accordance with the Amended and Restated Operating Agreement of Centennial
Broadcasting, LLC.
The Company owns and operates radio broadcast stations located in the states
of Nevada, Louisiana and Florida. Centennial Broadcasting, LLC operates as a
North Carolina Limited Liability Company and its members have limited liability
for the obligations or debts of the entity. The entity will cease to exist no
later than December 31, 2040.
On January 1, 2001, the Company distributed all of the assets and
liabilities related to the radio stations located in Vero Beach, Florida to the
members of Centennial Broadcasting, LLC. The distributed assets totaled
approximately $3.1 million and liabilities totaled approximately $2.6 million.
Net revenues from these radio stations were approximately $1.5 million for the
year ended December 31, 2000.
On January 31, 2001, all of the outstanding common stock of Centennial
Broadcasting Nevada, Inc. and all of the membership interests in Centennial
Broadcasting, LLC were sold to Beasley Broadcast Group, Inc., an unrelated
entity, for an aggregate purchase price, subject to certain adjustments, of
approximately $113.5 million.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) PRINCIPLES OF COMBINATION
The financial statements include the combined accounts of Centennial
Broadcasting, LLC and Centennial Broadcasting Nevada, Inc. after elimination of
all significant intercompany balances and transactions. These financial
statements have been combined as the entities are commonly controlled.
(b) BROADCASTING REVENUE
Broadcasting revenue is derived primarily from the sale of program time and
commercial announcements to local, regional and national advertisers. Revenue is
recognized when the programs and commercial announcements are broadcast. Local
and national operating revenues are presented net of agency and representative
commissions of approximately $1,936,000 and $571,000, respectively, for the year
ended December 31, 1999 and $2,020,000 and $667,000, respectively, for the year
ended December 31, 2000.
(c) TRADE (BARTER) REVENUE
Trade (barter) revenue of approximately $772,000 and $856,000 is included as
broadcasting revenue in the combined statement of operations for the years ended
December 31, 1999 and 2000, respectively. Trade (barter) expenses of
approximately $693,000 and $905,000 are included as costs and expenses in the
combined statement of operations for the years ended December 31, 1999 and 2000,
respectively. Barter revenue is recorded at the fair market value of the goods
or services received and is recognized when advertisements are broadcast.
Merchandise or services are charged to operations when received or used.
CENTENNIAL BROADCASTING, LLC AND
CENTENNIAL BROADCASTING NEVADA, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)
(d) CASH AND CASH EQUIVALENTS
Short-term investments having initial maturities of three months or less are
considered cash equivalents. As of December 31, 1999 and 2000, the Company's
cash account balances held at a commercial bank exceeded the $100,000 federally
insured limit.
(e) PROPERTY AND EQUIPMENT
Property and equipment are carried at cost. Depreciation is calculated using
the straight-line method over the estimated useful lives on the respective
assets (generally 5 to 15 years). Expenditures for repair and maintenance are
expensed when incurred. Betterments are capitalized. When property or equipment
is disposed or retired, the related cost and accumulated depreciation are
removed from the accounts, and the resulting gain or loss is reflected in the
statement of operations.
(f) INTANGIBLE ASSETS
Intangible assets are valued at fair market value at the date of
acquisition, less accumulated amortization. FCC licenses and goodwill are
amortized using the straight-line method over 40 years. The non-compete
agreements are being amortized over five years, which is the term of the
agreements. Costs incurred to obtain financing of the radio station acquisitions
are being amortized over the term of the related debt. Carrying amounts of
intangible assets are regularly reviewed for indications of impairment with
consideration given to financial performance and other relevant factors.
(g) LONG-LIVED ASSETS
The Company assesses the recoverability of intangibles and other long-lived
assets on an ongoing basis based on estimates of related future undiscounted
cash flows compared to net book value. If the future undiscounted cash flow
estimate is less than net book value, the net book value is reduced to the
estimated fair value. The Company also evaluates the amortization and
depreciation periods of intangibles and other long-lived assets to determine
whether events or circumstances warrant revised estimates of useful lives.
(h) ADVERTISING COSTS
The Company incurs various marketing and promotional costs to add and
maintain listenership. These costs are expensed as incurred and totaled
approximately $956,000 and $478,000 for the years ended December 31, 1999 and
2000, respectively.
(i) INCOME TAXES
The entities included in Centennial Broadcasting are taxed as pass-through
entities. Therefore, the income taxes are the responsibility of the individual
shareholders.
(j) CONCENTRATION OF CREDIT RISK
The Company's revenues and trade accounts receivable primarily relate to
advertising of products and services within the radio stations' broadcast
markets, primarily Las Vegas, New Orleans and Vero Beach. The Company's
management performs ongoing credit evaluations of customers financial condition
and, generally, requires no collateral from its customers. Credit losses have
been within management's expectations, and allowances for any anticipated
uncollectable receivables are maintained.
CENTENNIAL BROADCASTING, LLC AND
CENTENNIAL BROADCASTING NEVADA, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)
(k) MANAGEMENT'S ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amount of revenues and
expenses during the reporting period. Those amounts are inherently subject to
change and actual results could differ from those estimates.
(3) PROPERTY AND EQUIPMENT
Property and equipment consists of the following:
DECEMBER 31, ESTIMATED
----------------------------- USEFUL LIVES
1999 2000 (YEARS)
----------- ----------- -----------
Buildings and leasehold improvements $ 183,874 $ 187,288 5 - 40
Equipment 4,762,402 4,974,804 5 - 15
Construction in progress 37,631 1,621 --
----------- -----------
4,983,907 5,163,713
Less accumulated depreciation (860,183) (1,406,929)
----------- -----------
$ 4,123,724 $ 3,756,784
=========== ===========
Depreciation expense was approximately $511,000 and $557,000 for the years
ended December 31, 1999 and 2000, respectively.
(4) INTANGIBLE ASSETS
Intangible assets consists of the following:
DECEMBER 31, ESTIMATED
------------------------------- USEFUL LIVES
1999 2000 (YEARS)
------------ ------------ ------------
FCC licenses $ 52,676,561 $ 52,676,561 40
Goodwill 12,932,980 12,932,980 40
Non-compete agreements 86,758 130,092 5
Deferred loan costs 1,550,416 1,550,416 5
------------ ------------
67,246,715 67,290,049
Less accumulated amortization (3,509,244) (5,484,044)
------------ ------------
$ 63,737,471 $ 61,806,005
============ ============
Amortization expense was approximately $1,969,000 and $1,975,000 for the
years ended December 31, 1999 and 2000, respectively.
CENTENNIAL BROADCASTING, LLC AND
CENTENNIAL BROADCASTING NEVADA, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)
(5) LONG-TERM DEBT
On December 24, 1998 the Company entered into a subordinated loan agreement
with American Capital Strategies, Ltd. in the amount of $15,000,000. The note
bore interest at 18% per annum. Interest was to be paid currently at 6% in 1999,
8% in 2000, 10% in 2001, 12% in 2002 and 14% in 2003. The noncurrent interest
was converted to payment-in-kind notes, which bore interest at 18% per annum.
The subordinated note and the payment-in-kind notes were due together with all
unpaid interest on December 31, 2003. The loan agreement with American Capital
Strategies, Ltd. contained affirmative covenants, negative covenants and
financial covenants restricting certain activities of the Company.
The Company had a $4,000,000 revolving line of credit, with Wachovia Bank,
N.A. bearing interest at the London Interbank Offering Rate ("LIBOR") plus
2.625% (9.2456% as of December 31, 2000), which was secured by substantially all
assets of the Company. Borrowings on the line of credit were $1,500,000 and
$2,500,000 at December 31, 1999 and 2000, respectively. Interest was payable
monthly with the outstanding principal amount due and payable in full on
December 31, 2003.
The Company had a $20,000,000 term loan with Wachovia Bank, N.A., bearing
interest at LIBOR plus 2.125% (8.7456% as of December 31, 2000), which was
secured by substantially all assets of the Company. The interest rate spread was
based on the Company's leverage ratio at the end of each quarter. Interest was
payable monthly with principal payments commencing on September 30, 2000 through
the final maturity on December 31, 2003. The loan agreement with Wachovia Bank,
N.A. contained affirmative covenants, negative covenants and financial covenants
restricting certain activities of the Company.
On January 31, 2001, all outstanding long-term debt and accrued interest was
paid in full.
(6) EMPLOYEE BENEFIT PLANS
The Company maintains a 401(k) plan in which substantially all employees who
have met certain age requirements may participate. Employee contributions to the
401(k) plan are limited to a percentage of their compensation and are matched
50% by the Company up to a maximum of 4% of the employee's annual salary.
Company contributions were approximately $101,000 and $111,000 for the years
ended December 31, 1999 and 2000, respectively.
(7) SELF-INSURED MEDICAL PLAN
The Company has a self-insured medical plan for its employees. Stop-loss
insurance has been purchased to supplement the Plan, which will reimburse the
Company for individual claims exceeding $10,000 annually, or aggregate claims
exceeding approximately $75,000 for the period from July 1 to December 31, 1999.
(8) SALE OF INTANGIBLE ASSET
On August 24, 1998, the Company sold the intellectual property of KQOL-FM,
Las Vegas, Nevada to Jacor Broadcasting, Inc. The intellectual property included
the call letters, the music format and programming contracts. The sales price of
the intellectual property was approximately $1,278,000 and resulted in a loss of
approximately $7,000 to the Company. Additionally, the company entered into a
non-compete agreement with Jacor Broadcasting, Inc., valued at approximately
$1,688,000, which restricts the entertainment programming of the Company in Las
Vegas. Income from the non-compete agreement is being recognized over five
years, which is the term of the agreement.
CENTENNIAL BROADCASTING, LLC AND
CENTENNIAL BROADCASTING NEVADA, INC.
NOTES TO COMBINED FINANCIAL STATEMENTS - (CONTINUED)
(9) COMMITMENTS AND CONTINGENCIES
The Company routinely enters into contractual agreements having terms of one
year or more in connection with its broadcasting and other business activities.
Information about certain contracts that represent significant future
commitments on the part of the Company follows:
The Company leases office space and certain broadcasting and office
equipment under long-term leases. Rent expense charged to operating costs and
expenses totaled approximately $695,000 and $705,000 for the years ended
December 31, 1999 and 2000, respectively. The Company's commitments as of
December 31, 2000 for future minimum rents under leases with initial
noncancelable terms in excess of one year total approximately $2,144,000 and are
payable as follows: $521,000 in 2001, $425,000 in 2002, $417,000 in 2003,
$308,000 in 2004, $185,000 in 2005, and $288,000 thereafter.
In the normal course of business, the Company has long-term contractual
commitments to major broadcast ratings organizations that provide monthly
ratings services, contractual agreements for broadcasting and consulting and
other contractual agreements for goods and services. As of December 31, 2000 the
aggregate amount of such contracts was approximately $1,099,000 and is payable
as follows: $631,000 in 2001, $321,000 in 2002, $111,000 in 2003 and $36,000 in
2004.
Centennial Broadcasting Nevada, Inc. has a potential tax exposure related to
a built-in gain of $13,029,250. The built-in gain originated from the purchase
of the stock of Nevada Radio, Inc. (the previous owners of KJUL-FM) in June 1997
and its election of S Corporation status. The built-in gain is subject to
federal income tax at the rate of 35% for a period ending ten years after stock
acquisition. If a disposition of these assets occurred during this period
whereby the built-in gain would be required to be recognized, Centennial
Broadcasting Nevada, Inc. would be liable for taxes in the amount of
approximately $4,560,000. It is management's intention not to cause an event to
occur that would result in the realization of this potential tax liability. The
built-in gain is not expected to be recognized as a result of the sale to
Beasley FM Acquisition Corp.
(10) RELATED PARTY TRANSACTIONS
In 1999, the Company paid chairman fees in the amount of $40,000 to the two
shareholders of Centennial Broadcasting Nevada, Inc.
BEASLEY BROADCAST GROUP, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2000
ACTUAL
---------------------------------
BEASLEY
BROADCAST CENTENNIAL PRO FORMA
GROUP, INC. BROADCASTING ADJUSTMENTS PRO FORMA (1)
------------- ------------- ------------- -------------
Current assets:
Cash and cash equivalents $ 5,742,628 $ 1,622,989 $ (4,908,628) $ 2,456,989
Accounts receivable, net 18,712,862 2,947,119 (211,305) 21,448,676
Trade sales receivable 843,843 135,829 -- 979,672
Other receivables 980,504 -- -- 980,504
Prepaid expenses and other 2,249,615 1,049,636 (6,031) 3,293,220
Deferred tax assets 176,000 -- -- 176,000
------------- ------------- ------------- -------------
Total current assets 28,705,452 5,755,573 (5,125,964) 29,335,061
Property and equipment, net 15,619,688 3,756,784 1,918,216 21,294,688
Notes receivable from related parties 4,990,480 -- -- 4,990,480
Intangibles, net 164,893,584 61,806,005 46,018,995 272,718,584
Other investments 1,523,729 -- -- 1,523,729
Other assets 2,425,631 15,423 (4,398) 2,436,656
------------- ------------- ------------- -------------
Total assets $ 218,158,564 $ 71,333,785 $ 42,806,849 $ 332,299,198
============= ============= ============= =============
Current liabilities:
Current installments of long term debt $ 8,352 $ 4,750,000 (4,750,000) $ 8,352
Accounts payable 2,355,006 89,611 (5,962) 2,438,655
Accrued expenses 6,986,006 602,045 (74,276) 7,513,775
Trade sales payable 798,198 29,216 -- 827,414
------------- ------------- ------------- -------------
Total current liabilities 10,147,562 5,470,872 (4,830,238) 10,788,196
Long term debt, less current installments 103,478,405 35,778,306 77,721,694 216,978,405
Non-compete agreement -- 900,085 (900,085) --
Deferred tax liabilities 25,575,000 -- -- 25,575,000
------------- ------------- ------------- -------------
Total liabilities 139,200,967 42,149,263 71,991,371 253,341,601
Common stock 24,273 751 (751) 24,273
Additional paid-in capital 106,633,932 8,740,928 (8,740,928) 106,633,932
Accumulated deficit (27,700,608) (2,843,121) 2,843,121 (27,700,608)
Members' equity -- 23,285,964 (23,285,964) --
------------- ------------- ------------- -------------
Total equity 78,957,597 29,184,522 (29,184,522) 78,957,597
------------- ------------- ------------- -------------
Total liabilities and equity $ 218,158,564 $ 71,333,785 $ 42,806,849 $ 332,299,198
============= ============= ============= =============
(1) Includes the net effect of the acquisition as if the transaction had taken
place on December 31, 2000.
BEASLEY BROADCAST GROUP, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2000
ACTUAL
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BEASLEY
BROADCAST CENTENNIAL PRO FORMA
GROUP, INC. BROADCASTING ADJUSTMENTS PRO FORMA (1)
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Net revenues $ 106,153,640 $ 18,179,364 $ (1,482,017) $ 122,850,987
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Costs and expenses:
Program and production 27,919,127 3,580,249 (82,331) 31,417,045
Sales and advertising 28,208,358 6,875,263 (893,916) 34,189,705
Station general and administrative 15,597,101 2,553,375 (219,731) 17,930,745
Corporate general and administrative 3,991,535 1,229,585 -- 5,221,120
Equity appreciation rights 1,173,759 -- -- 1,173,759
Format change expenses 1,545,547 -- -- 1,545,547
Depreciation and amortization 17,409,162 2,531,699 5,602,468 25,543,329
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Total costs and expenses 95,844,589 16,770,171 4,406,490 117,021,250
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Operating income 10,309,051 1,409,193 (5,888,507) 5,829,737
Other income (expense):
Interest expense (8,812,564) (5,168,830) (3,840,233) (17,821,627)
Unrealized loss on investment (2,400,000) -- -- (2,400,000)
Other non-operating expenses (310,754) (29,934) -- (340,688)
Interest income 446,197 58,218 -- 504,415
Other non-operating income 168,383 19,421 -- 187,804
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Loss before income taxes (599,687) (3,711,932) (9,728,740) (14,040,359)
Income tax expense (benefit) 28,998,000 -- (4,526,459) 24,471,541
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Net loss $ (29,597,687) $ (3,711,932) $ (5,202,281) $ (38,511,900)
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Basic and diluted net loss per share $ (1.26) N/A N/A $ (1.64)
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Basic and diluted common shares outstanding 23,506,091 N/A N/A 23,506,091
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(1) Includes the net effect of the acquisition as if the transaction had taken
place on January 1, 2000.
CENTENNIAL BROADCASTING, LLC AND
CENTENNIAL BROADCASTING NEVADA, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The unaudited pro forma condensed consolidated financial statements reflect
the results of operations and financial position of Beasley Broadcast Group,
Inc. after giving effect to the February 1, 2001 acquisition of the interests in
Centennial Broadcasting which owned KJUL-FM, KSTJ-FM and KKLZ-FM in Las Vegas
and WBYU-AM, WRNO-FM and KMEZ-FM in New Orleans for an aggregate purchase price
of approximately $113.5 million.
The unaudited pro forma condensed consolidated financial statements are
based on Beasley Broadcast Group, Inc.'s historical consolidated financial
statements and Centennial Broadcasting's historical combined financial
statements.
In the opinion of management, all adjustments necessary to fairly present
this pro forma financial information have been made.
(1) PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(a) VERO BEACH OPERATIONS
On January 1, 2001, Centennial Broadcasting, LLC distributed all of the
assets and liabilities related to the radio stations located in Vero Beach,
Florida to its members. Accordingly, Beasley Broadcast Group, Inc. eliminated
these assets and liabilities as of December 31, 2000.
(b) WORKING CAPITAL
The pro forma adjustments reflect the cash acquisition of substantially all
of Centennial Broadcasting's non-cash working capital remaining after the
distribution of the assets and liabilities related to the radio stations located
in Vero Beach, Florida to Centennial Broadcasting's members on January 1, 2001.
(c) PROPERTY AND EQUIPMENT AND INTANGIBLES
The pro forma adjustments reflect the preliminary allocation of the $113.5
million purchase price to property and equipment and intangible assets.
(d) LONG-TERM DEBT
The pro forma adjustments reflect the $113.5 million draw from Beasley
Broadcast Group, Inc.'s credit facility and the repayment of all of Centennial
Broadcasting's long-term debt.
(2) PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(a) VERO BEACH OPERATIONS
Due to the distribution of all assets and liabilities related to the radio
stations located in Vero Beach, Florida to Centennial Broadcasting's members on
January 1, 2001, Beasley Broadcast Group, Inc. eliminated the operating results
from these radio stations for the year ended December 31, 2000.
CENTENNIAL BROADCASTING, LLC AND
CENTENNIAL BROADCASTING NEVADA, INC.
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(b) DEPRECIATION AND AMORTIZATION
Depreciation and amortization for the acquisition was based on preliminary
allocations of the $113.5 million purchase price to property and equipment and
intangible assets. Actual depreciation and amortization may differ depending on
the final allocation of the purchase price; however, management does not believe
these differences will be material. The estimated useful life for intangible
assets will not exceed 15 years.
(c) INTEREST EXPENSE
The interest rate applied to the amounts borrowed under Beasley Broadcast
Group, Inc.'s credit facility was 7.9375%, which represents the interest rate
charged on the credit facility as of December 31, 2000.
(d) INCOME TAXES
The tax rate applied to the pro forma loss before income taxes was 38.62%.
The pro forma income tax benefit was reduced by non-deductible depreciation and
amortization of assets acquired from Centennial Broadcasting.
The unaudited pro forma financial information is presented for illustrative
purposes only and does not necessarily indicate the operating results or
financial position that would have occurred if the transactions described above
had been completed on the dates indicated, nor is it necessarily indicative of
future operating results or financial position.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Beasley Broadcast Group, Inc.
By: /s/ GEORGE G. BEASLEY
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Name: George G. Beasley
Title: Chairman of the Board and Chief Executive Officer
By: /s/ CAROLINE BEASLEY
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Name: Caroline Beasley
Title: Vice President, Chief Financial Officer, Secretary,
Treasurer and Director
Date: April 6, 2001