Transaction Expected to be Immediately Additive to Operating Results Beasley Broadcast Group Secures Option to Purchase Managed Stations for $8.5 Million NAPLES, Fla. and LAS VEGAS, May 28, 2010 (GLOBE NEWSWIRE) -- Beasley Broadcast Group, Inc. (Nasdaq:BBGI) ("Beasley Broadcast"), a large- and mid-size market radio broadcaster, announced today that it entered into an agreement with GGB Las Vegas, LLC, whereby Beasley Broadcast Group will provide management services for KOAS-FM and KVGS-FM in Las Vegas. Beasley Broadcast Group, which currently owns three radio stations in the Las Vegas market, expects that the transaction will be immediately additive to its operating results. GGB Las Vegas, LLC is an entity formed by George Beasley, Chairman and CEO of Beasley Broadcast Group, for the purpose of acquiring KOAS-FM and KVGS-FM from Riviera Broadcast Group, LLC for approximately $8.5 million. GGB Las Vegas' acquisition of KOAS-FM and KVGS-FM is expected to be completed in the third quarter of 2010 and is subject to FCC approval and other customary closing conditions. During the period prior to the consummation of the acquisition, GGB Las Vegas will provide services to Riviera Broadcast Group for KOAS-FM and KVGS-FM pursuant to a local marketing agreement. Beasley Broadcast and GGB Las Vegas have entered into a management agreement whereby Beasley Broadcast will receive 40% of any advertising revenue sold by its existing Las Vegas sales teams for KOAS-FM and KVGS-FM until such time that GGB Las Vegas completes the acquisition of the stations. Once the stations are acquired by GGB Las Vegas, Beasley Broadcast will provide both stations with sales and other management services and will be entitled to the greater of 50% of the aggregate monthly station operating income generated by KOAS-FM and KVGS-FM or a total of $10,000 per month. Station operating income is defined as net revenue less operating expenses including cost of services and selling, general and administrative expenses.
The management agreement between Beasley Broadcast and GGB Las Vegas will have an initial term of three years. In addition, GGB Las Vegas has granted Beasley Broadcast an option, with a term concurrent with the management agreement, to purchase KOAS-FM and KVGS-FM for $8.5 million (its cost) plus any losses incurred until such time that Beasley Broadcast elects to exercise the option. The management agreement and other terms of the transaction were first approved by the Audit Committee of the Board of Directors of Beasley Broadcast Group, Inc. and then by the full Board.Commenting on the agreement, George Beasley, stated, "This transaction allows Beasley Broadcast Group to leverage its existing Las Vegas operating and management capabilities to immediately generate new cash flow through a structure that requires no capital commitment. "Our existing Las Vegas cluster is benefiting from the focus we placed on identifying the right management leadership, and the 24% increase in revenue generated by our three stations in the market in the 2010 first quarter significantly exceeded the overall market which remains economically challenged. Notwithstanding the current economic and market challenges, we continue to believe that Las Vegas remains one of the most vibrant and promising radio markets in the country and this transaction is intended to benefit all Beasley Broadcast shareholders both near-term and long-term as the local economy rebounds. On an immediate basis, the Company will generate guaranteed management fee revenue while the option to purchase these stations at an attractive price presents potential further upside to Beasley Broadcast Group. Finally, KOAS-FM and KVGS-FM complement our existing Las Vegas station cluster as their current oldies and alternative rock formats, respectively, do not overlap with our existing stations in the market." Michael J. Bergner of Bergner & Co. acted as an adviser to George Beasley in the transaction. Beasley Broadcast Group currently owns three radio stations in Las Vegas including Coyote Country 102.7 KCYE-FM, Classic Hits 96.3 KKLZ-FM, and NewsTalk 720 KDWN-AM.
Founded in 1961, Beasley Broadcast Group, Inc. is a radio broadcasting company that owns and operates 42 stations (26 FM and 16 AM) located in eleven large- and mid-size markets in the United States. The Company also operates one station in the expanded AM band in Augusta, GA.The Beasley Broadcast Group, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4259 Note Regarding Forward-Looking Statements : Statements in this release that are "forward-looking statements" are based upon current expectations and assumptions, and involve certain risks and uncertainties within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Words or expressions such as "intends," "expects," "expected," "anticipates" or variations of such words and similar expressions are intended to identify such forward-looking statements. Key risks are described in our reports filed with the SEC including in our Annual Report on Form 10-K for the year ended December 31, 2009. Readers should note that forward-looking statements are subject to change and to inherent risks and uncertainties and may be impacted by several factors, including: a continuation or worsening of the current economic downturn and regulatory changes, the effect of radio station acquisitions or dispositions that we may make, the loss of key personnel, a downturn in the performance of our radio stations, our substantial debt levels and changes in the radio broadcast industry generally. Our actual performance and results could differ materially because of these factors and other factors discussed in the "Management's Discussion and Analysis of Results of Operations and Financial Condition" of our SEC filings, including but not limited to annual reports on Form 10-K or quarterly reports on Form 10-Q, copies of which can be obtained from the SEC, www.sec.gov, or our website, www.bbgi.com. All information in this release is as of May 28, 2010, and we undertake no obligation to update the information contained herein to actual results or changes to our expectations.
CONTACT: Beasley Broadcast Group, Inc. B. Caroline Beasley, Chief Financial Officer 239/263-5000 email@example.com Jaffoni & Collins Incorporated Joseph N. Jaffoni 212/835-8500 firstname.lastname@example.org