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WASHINGTON, D.C. 20549

FORM 10-Q

For the Quarterly Period Ended June 30, 2002

OR

Commission File No. 0-29253

(Exact Name of Registrant as Specified in Its Charter)

3033 Riviera Drive, Suite 200
Naples, Florida 34103

(Address of Principal Executive Offices and Zip Code)

(239) 263-5000
(Registrant’s Telephone Number, Including Area Code)

             Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

             Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

                        Class A Common Stock, $.001 par value, 7,440,698 Shares Outstanding as of August 12, 2002

                        Class B Common Stock, $.001 par value, 16,832,743 Shares Outstanding as of August 12, 2002

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INDEX

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PART I FINANCIAL INFORMATION

BEASLEY BROADCAST GROUP, INC.
CONSOLIDATED BALANCE SHEETS

See accompanying notes to consolidated financial statements

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BEASLEY BROADCAST GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS

See accompanying notes to consolidated financial statements

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BEASLEY BROADCAST GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

See accompanying notes to consolidated financial statements

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BEASLEY BROADCAST GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1)     Interim Financial Statements

            In the opinion of management, the accompanying consolidated financial statements include all adjustments deemed necessary to summarize fairly and reflect the financial position and results of operations of Beasley Broadcast Group, Inc. (“the Company”) for the interim periods presented. Results of the second quarter of 2002 are not necessarily indicative of results for the full year. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Annual Report on Form 10-K for the year ended December 31, 2001.

(2)     Accounting Change

            Effective January 1, 2002, the Company adopted Statement of Financial Accounting Standards (“SFAS”) 142, “Goodwill and Other Intangible Assets.” SFAS 142 requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead tested for impairment at least annually in accordance with the provisions of SFAS 142. In addition, to the extent an intangible asset is identified as having an indefinite useful life, the Company is required to test the intangible asset for impairment in accordance with the provisions of SFAS 142.

            In accordance with the provisions of SFAS 142, as of January 1, 2002, the Company tested its FCC broadcasting licenses, which were identified as intangible assets having indefinite useful lives, and goodwill for impairment. To estimate the fair value of its FCC broadcasting licenses and goodwill, the Company obtained appraisals from an independent appraisal company. As a result of the testing, the Company recognized an impairment of $17.5 million related to FCC broadcasting licenses and goodwill in the Radio Group Three segment and recorded the loss as a cumulative effect of accounting change in the consolidated statement of operations for the six months ended June 30, 2002. The cumulative effect of the accounting change, net of income tax effect, decreased net income approximately $12.1 million and earnings per share $0.50.

            The changes in the carrying amount of FCC broadcasting licenses for the six months ended June 30, 2002 are as follows:

            The changes in the carrying amount of goodwill for the six months ended June 30, 2002 are as follows:

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BEASLEY BROADCAST GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

            The following information presents the impact on net income (loss) and net income (loss) per share had FCC broadcasting licenses and goodwill not been amortized during 2001:

(3)     Other Intangibles

            Other intangibles, at cost, is comprised of the following:

            As of January 1, 2002, estimated amortization expense for the next five years is summarized as follows:

(4)     Recent Accounting Pronouncements

            In June 2001, the FASB issued SFAS 143, “Accounting for Asset Retirement Obligations.” SFAS 143 addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. SFAS 143 amends SFAS 19 and is effective for financial statements issued for fiscal years beginning after June 15, 2002. The Company has not completed its evaluation of SFAS 143; however, management does not anticipate that the adoption of SFAS 143 will have a material impact on the Company’s earnings or financial position upon adoption.

            In August 2001, the FASB issued SFAS 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” SFAS 144 addresses financial accounting and reporting for the impairment or disposal of long-lived assets. SFAS 144 is effective for financial statements issued for fiscal years beginning after December 15, 2001 and interim periods within those fiscal years. The Company has adopted SFAS 144 with no material impact on its consolidated financial statements.

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BEASLEY BROADCAST GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(5)     Completed Disposition

            On March 20, 2002, the Company completed the disposition of two radio stations in the New Orleans market to Wilks Broadcasting LLC. As consideration for the disposition of these stations the Company received $23.0 million, subject to certain adjustments, including $19.65 million in cash and a $3.35 million note payable from Wilks Broadcasting LLC. The note accrues interest at 9% per annum and the principal amount and all accrued interest are due on June 20, 2004. The Company used $19.5 million of the net cash proceeds to repay a portion of the outstanding term loan under its credit facility. The Company recorded a pre-tax loss of $297,000 on the disposition. The loss is reported in other non-operating expenses in the consolidated statement of operations for the six months ended June 30, 2002.

(6)     Long-Term Debt

            As of June 30, 2002, the maximum commitment under the credit facility was $243.5 million and the outstanding balance was $199.5 million. The credit facility bears interest at either the base rate or LIBOR plus a margin that is determined by the Company’s debt to cash flow ratio. The base rate is equal to the higher of the prime rate or the overnight federal funds effective rate plus 0.5%. As of December 31, 2001 and June 30, 2002, the credit facility carried interest at a weighted average rate of 5.0625% and 5.25%, respectively. Interest is generally payable monthly through maturity on June 30, 2008. The scheduled reductions in the amount available under the credit facility may require principal repayments if the outstanding balance at that time exceeds the new maximum amount available under the credit facility. The credit facility is secured by substantially all assets of the Company.

            The Company has entered into interest rate hedge agreements to reduce the potential impact of changes in interest rates on its credit facility. The credit agreement requires the Company to maintain certain financial ratios and includes restrictive covenants. The restrictive covenants prohibit the payment of dividends. As of June 30, 2002, the Company was in compliance with all applicable financial covenants.

(7)     Income Taxes

            The Company’s effective tax rate is approximately 40%, which differs from the federal statutory rate of 34% due to the effect of state income taxes and certain expenses that are not deductible for tax purposes. For the six months ended June 30, 2002, the effective tax rate was decreased by adjustments totaling $0.9 million as a result of the completion of the Company’s 2001 income tax returns.

(8)     Income (Loss) Per Share

            Income (loss) per share calculation information is as follows:

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BEASLEY BROADCAST GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(9)     Segment Information

            Segment information is as follows:

            Radio Group One includes radio stations located in Miami-Ft. Lauderdale, FL, West Palm Beach-Boca Raton, FL, Ft. Myers-Naples, FL and Greenville-New Bern-Jacksonville, NC. Radio Group Two includes radio stations located in Boston, MA, Atlanta, GA, Philadelphia, PA, Fayetteville, NC, and Augusta, GA. Radio Group Three includes radio stations located in Las Vegas, NV and New Orleans, LA.

            Broadcast cash flow consists of operating income (loss) before corporate general and administrative expenses and depreciation and amortization.

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            You should read the following discussion together with the financial statements and related notes included elsewhere in this report. The results discussed below are not necessarily indicative of the results to be expected in any future periods. Certain matters discussed herein are forward-looking statements. This report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including any projections of earnings, revenues or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions o r performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. Forward-looking statements may include the words “may,” “will,” “estimate,” “intend,” “continue,” “believe,” “expect” or “anticipate” and other similar words. Such forward-looking statements may be contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” among other places.

            Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, such as unforeseen events that would cause us to broadcast commercial free for any period of time, and changes in the radio broadcasting industry generally. We do not intend, and undertake no obligation, to update any forward-looking statement.

General

            A radio broadcasting company derives its revenues primarily from the sale of broadcasting time to local and national advertisers. The advertising rates that a radio station is able to charge and the number of advertisements that can be broadcast without jeopardizing listener levels largely determine those revenues. Advertising rates are primarily based on three factors:

            Our operations are divided into three reportable segments, Radio Group One, Radio Group Two, and Radio Group Three. Net revenues, broadcast cash flow and other financial information for these segments are contained in the notes to our unaudited consolidated financial statements included in Item 1 of this report.

            Several factors may adversely affect a radio broadcasting company’s performance in any given period. In the radio broadcasting industry, seasonal revenue fluctuations are common and are due primarily to variations in advertising expenditures by local and national advertisers. Typically, revenues are lowest in the first calendar quarter of the year. We generally incur advertising and promotional expenses to increase listenership and Arbitron ratings. However, because Arbitron reports ratings quarterly in most of our markets, any change in ratings, and therefore changes in advertising revenues, tend to lag behind the incurrence of advertising and promotional spending.

            In the broadcasting industry, radio stations often utilize trade or barter agreements to reduce cash paid for expenses by exchanging advertising time for goods or services. In order to maximize cash revenue from our inventory, we minimize our use of trade agreements and have generally held barter revenues under 5% of our gross revenues and barter related broadcast cash flow under 3% of our broadcast cash flow.

            We calculate same station results by comparing the performance of radio stations at the end of a relevant period to the performance of those same stations in the prior year’s corresponding period, including the effect of barter revenues and expenses. These results exclude two radio stations that were sold in the New Orleans market during the

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first quarter of 2002.

            Broadcast cash flow consists of operating income (loss) before corporate general and administrative expenses and depreciation and amortization. Although broadcast cash flow is not a measure of performance or liquidity calculated in accordance with generally accepted accounting principles, we believe that this measure is useful to an investor in evaluating our performance. This measure is widely used in the broadcast industry to evaluate a radio company’s operating performance. However, you should not consider this measure in isolation or as a substitute for operating income, cash flows from operating activities or any other measure for determining our operating performance or liquidity that is calculated in accordance with generally accepted accounting principles. In addition, because broadcast cash flow is not calculated in accordance with generally accepted accounting principles, it is not necessarily comparable to similarly titled measures employed by other companies. Same station broadcast cash flow is the broadcast cash flow of the radio stations included in our same station calculations.

Results of Operations

            In March 2002, we completed the disposition of two radio stations in the New Orleans market. As of October 1, 2001, the purchaser began operating these stations under a time brokerage agreement until their disposition on March 20, 2002, which contributed to lower net revenues and station operating expenses during the three and six months ended June 30, 2002. We also completed our barter agreements with eTour, Inc. in May 2001 and FindWhat.com in October 2001, which contributed to lower net revenues during the three and six months ended June 30, 2002. In addition, we also completed our 1997 radio broadcast rights contract with the Florida Marlins in October 2001. On April 1, 2002, we began a one-year extension to our radio broadcast rights contract with the Florida Marlins on more favorable terms for the 2002 season.

            Effective January 1, 2002, we adopted Statement of Financial Accounting Standards (“SFAS”) 142, “Goodwill and Other Intangible Assets.” SFAS 142 requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead tested for impairment at least annually in accordance with the provisions of SFAS 142. This standard contributed to lower amortization expense for the three and six months ended June 30, 2002. In accordance with the provisions of SFAS 142, as of January 1, 2002, we tested our FCC broadcasting licenses, which were identified as intangible assets having indefinite useful lives, and goodwill for impairment. To determine the fair value of our FCC broadcasting licenses and goodwill, we obtained appraisals from an independent appraisal company. As a result of the testing, we recognized an impairment of $17.5 million related to FCC broadca sting licenses and goodwill in the Radio Group Three segment and recorded the loss as a cumulative effect of accounting change in the consolidated statement of operations for the six months ended June 30, 2002. The cumulative effect of the accounting change, net of income tax effect, decreased net income $12.1 million and earnings per share $0.50 for the six months ended June 30, 2002.

            Our effective tax rate is approximately 40%, which differs from the federal statutory rate of 34% due to the effect of state income taxes and certain expenses that are not deductible for tax purposes. For the six months ended June 30, 2002, the effective tax rate was decreased by adjustments totaling $0.9 million as a result of the completion of our 2001 income tax returns.

Three Months ended June 30, 2002 Compared to the Three Months Ended June 30, 2001

             Net Revenue. Net revenue decreased 6.2% to $28.4 million for the three months ended June 30, 2002 from $30.2 million for the three months ended June 30, 2001. The decrease was primarily due to the disposition of two radio stations in the New Orleans market in March 2002, which had contributed $1.6 million to net revenues during the three months ended June 30, 2001. Net revenues also decreased as a result of the completion of our barter agreements with eTour, Inc. in May 2001 and FindWhat.com in October 2001, which had contributed $0.8 million to net revenues during the three months ended June 30, 2001. On a same station basis, net revenues decreased 1.0% to $28.4 million for the three months ended June 30, 2002 from $28.6 million for the three months ended June 30, 2001.

             Station Operating Expenses. Station operating expenses decreased 14.4% to $18.6 million for the three months ended June 30, 2002 from $21.7 million for the three months ended June 30, 2001. Station operating expenses consist of program and production expenses, sales and advertising expenses and general and administrative expenses

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incurred at our radio stations. The decrease was partially due to the disposition of two radio stations in the New Orleans market in March 2002. The decrease was also partially due to the completion of our 1997 radio broadcast rights contract with the Florida Marlins. On a same station basis, station operating expenses decreased 10.0% to $18.6 million for the three months ended June 30, 2002 from $20.7 million for the three months ended June 30, 2001. The decrease was primarily due to the completion of our 1997 radio broadcast rights contract with the Florida Marlins.

             Broadcast Cash Flow. Broadcast cash flow increased 15.0% to $9.7 million for the three months ended June 30, 2002 from $8.5 million for the three months ended June 30, 2001. On a same station basis, broadcast cash flow increased 22.3% to $9.7 million for the three months ended June 30, 2002 from $8.0 million for the three months ended June 30, 2001. The increase in actual and same station broadcast cash flow was primarily due to the completion of our 1997 radio broadcast rights contract with the Florida Marlins.

             Corporate General and Administrative Expenses. Corporate general and administrative expenses decreased 3.4% to $1.3 million for the three months ended June 30, 2002 from $1.4 million for the three months ended June 30, 2001. Corporate general and administrative expenses consist primarily of salaries, insurance, rent and other expenses incurred at our corporate offices.

             Depreciation and Amortization. Depreciation and amortization decreased 86.6% to $1.0 million for the three months ended June 30, 2002 from $7.2 million for the three months ended June 30, 2001. The decrease was primarily due to the adoption of SFAS 142 on January 1, 2002, which requires that our FCC broadcasting licenses and goodwill no longer be amortized, but instead tested for impairment at least annually in accordance with the provisions of SFAS 142.

             Interest Expense. Interest expense decreased 6.2% to $3.8 million for the three months ended June 30, 2002 from $4.1 million for the three months ended June 30, 2001. The decrease was partially due to a decrease in interest rates on our credit facility and partially due to a reduction of the outstanding balance under our credit facility with scheduled repayments.

             Net Income (Loss). Net income for the three months ended June 30, 2002 was $2.6 million compared to a net loss of $4.1 million for the three months ended June 30, 2001. The change was primarily due to the decrease in station operating expenses and the adoption of SFAS 142, which resulted in a decrease in amortization expense in 2002. Net income for 2002 also includes a $0.7 million gain in the fair value of our derivative financial instruments. The net loss for 2001 included a $0.4 million loss on our investment in eTour, Inc. and a $1.8 million loss in the fair value of our derivative financial instruments.

Six Months ended June 30, 2002 Compared to the Six Months Ended June 30, 2001

             Net Revenue. Net revenue decreased 5.0% to $53.2 million for the six months ended June 30, 2002 from $56.1 million for the six months ended June 30, 2001. The decrease was partially due to the disposition of two radio stations in the New Orleans market during the first quarter of 2002, which had contributed $2.6 million to net revenues during the six months ended June 30, 2001. This decrease was partially offset by the inclusion of six months of operations from our radio station acquisitions in the Las Vegas and Augusta markets which were completed on February 1, 2001 and April 2, 2001, respectively. Net revenues also decreased as a result of the completion of our barter agreements with eTour, Inc. in May 2001 and FindWhat.com in October 2001, which had contributed $1.7 million to net revenues during the six months ended June 30, 2001. On a same station basis, net revenues decreased 2.9% to $53.1 milli on for the six months ended June 30, 2002 from $54.7 million for the six months ended June 30, 2001. The decrease was primarily due to the completion of our barter agreements with eTour, Inc. and FindWhat.com.

             Station Operating Expenses. Station operating expenses decreased 11.0% to $36.6 million for the six months ended June 30, 2002 from $41.1 million for the six months ended June 30, 2001. Station operating expenses consist of program and production expenses, sales and advertising expenses and general and administrative expenses incurred at our radio stations. The decrease was partially due to the disposition of two radio stations in the New Orleans market in March 2002. This decrease was partially offset by increased station operating expenses due to the inclusion of six months of operations from our radio station acquisitions in the Las Vegas and Augusta markets,

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which were completed on February 1, 2001 and April 2, 2001, respectively. The decrease was also partially due to the completion of our 1997 radio broadcast rights contract with the Florida Marlins. In addition, the decrease was partially due to the absence of promotional expenses incurred during the first quarter of 2001 to promote a format change at a radio station in the Philadelphia market. On a same station basis, station operating expenses decreased 9.6% to $36.6 million for the six months ended June 30, 2002 from $40.4 million for the six months ended June 30, 2001. The decrease was primarily due to the completion of our 1997 radio broadcast rights contract with the Florida Marlins and to the absence of promotional expenses incurred during the first quarter of 2001 to promote a format change at a radio station in the Philadelphia market.

             Broadcast Cash Flow. Broadcast cash flow increased 11.5% to $16.7 million for the six months ended June 30, 2002 from $14.9 million for the six months ended June 30, 2001. On a same station basis, broadcast cash flow increased 15.8% to $16.5 million for the six months ended June 30, 2002 from $14.3 million for the six months ended June 30, 2001. The increase in actual and same station broadcast cash flow was partially due to the completion of our 1997 radio broadcast rights contract with the Florida Marlins. The increase was also partially due to the absence of promotional expenses incurred during the first quarter of 2001 to promote a format change at a radio station in the Philadelphia market. These increases were partially offset by a decrease in broadcast cash flow due to the completion of our barter agreements with eTour, Inc. and FindWhat.com.

             Corporate General and Administrative Expenses. Corporate general and administrative expenses increased 0.9% to $2.6 million for the six months ended June 30, 2002 from $2.5 million for the six months ended June 30, 2001. Corporate general and administrative expenses consist primarily of salaries, insurance, rent and other expenses incurred at our corporate offices.

             Depreciation and Amortization. Depreciation and amortization decreased 85.0% to $2.0 million for the six months ended June 30, 2002 from $13.2 million for the six months ended June 30, 2001. The decrease was primarily due to the adoption of SFAS 142 on January 1, 2002, which requires that our FCC broadcasting licenses and goodwill no longer be amortized, but instead tested for impairment at least annually in accordance with the provisions of SFAS 142.

             Interest Expense. Interest expense increased 0.8% to $7.9 million for the six months ended June 30, 2002 from $7.8 million for the six months ended June 30, 2001. The increase was primarily due to financing our radio station acquisitions in the Las Vegas, New Orleans and Augusta markets during 2001 with draws from our credit facility. The increase was partially offset by a decrease in interest rates on our credit facility and a reduction of the outstanding balance under our credit facility with scheduled repayments.

             Net Loss. Net loss for the six months ended June 30, 2002 was $7.7 million compared to a net loss of $6.7 million for the six months ended June 30, 2001. The net loss for 2002 was primarily due to the adoption of SFAS 142, which resulted in a $12.1 million impairment loss, net of income tax effect, recorded as a cumulative effect of accounting change. This loss was partially offset by the decrease in station operating expenses and amortization expense due to the adoption of SFAS 142. The net loss for 2002 also includes a $1.9 million gain in the fair value of our derivative financial instruments. The net loss for 2001 includes a $1.6 million loss on our investment in eTour, Inc., a $2.8 million loss in the fair value of our derivative financial instruments and a $2.6 million gain on a previously written off related party receivable.

Liquidity and Capital Resources

             Overview. Our primary sources of liquidity are internally-generated cash flow and our credit facility. Our liquidity needs have been and will continue to be for working capital, debt service, radio station acquisitions and other general corporate purposes, including capital expenditures. We expect to provide for future liquidity needs through one or a combination of the following:

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            As of June 30, 2002, we held $3.3 million in cash and cash equivalents and had $44.0 million in remaining commitments available under our credit facility; however, our financial covenants as of June 30, 2002 would have limited additional borrowings to $16.3 million.

             Net Cash Provided By Operating Activities. Net cash provided by operating activities was $6.1 million and $5.9 million for the six months ended June 30, 2002 and 2001, respectively. The change is primarily due to a $3.6 million decrease in cash paid for station operating expenses and the receipt of a $2.2 million tax refund during 2002. These increases in cash were partially offset by a $1.5 million decrease in cash receipts from net revenues and a $1.5 million increase in cash paid for interest during 2002. In addition, cash increased in 2001 due to the receipt of $2.6 million from a previously written off related party receivable.

             Net Cash Provided By (Used In) Investing Activities. Net cash provided by investing activities was $18.9 million for the six months ended June 30, 2002. Net cash used in investing activities was $132.6 million for the six months ended June 30, 2001. The change is primarily due to the receipt of cash proceeds totaling $19.65 million from the disposition of two radio stations in the New Orleans market for $23.0 million in 2002, compared to the acquisitions of three radio stations in the Las Vegas market, three radio stations in the New Orleans market and two radio stations in the Augusta market for $128.3 million in 2001. Net cash used in investing activities also increased in 2001 by $2.5 million for a signal upgrade in the Las Vegas market. In addition, expenditures for property and equipment were $0.8 million during 2002 compared to $1.9 million during 2001.

             Net Cash Provided By (Used In) by Financing Activities. Net cash used in financing activities was $26.6 million for the six months ended June 30, 2002. Net cash provided by financing activities was $123.2 million for the six months ended June 30, 2001. The change is primarily due to a $19.5 million repayment of the credit facility with cash proceeds from the disposition of two radio stations in the New Orleans market and $6.5 million of scheduled repayments of the credit facility in 2002. In 2001, we financed the acquisition of three radio stations in the Las Vegas market, three radio stations in the New Orleans market and two radio stations in the Augusta market in 2001 with $123.2 million of borrowings under our credit facility.

             Credit Facility. As of June 30, 2002, the maximum commitment under our credit facility was $243.5 million and the outstanding balance was $199.5 million; however, our financial covenants as of June 30, 2002 would have limited additional borrowings to $16.3 million. The credit facility consists of a $119.5 million revolving credit loan and a $124.0 million term loan. The revolving credit loan includes a $50.0 million sub-limit for letters of credit. The credit facility bears interest at either the base rate or LIBOR plus a margin that is determined by our debt to cash flow ratio. The base rate is equal to the higher of the prime rate or the overnight federal funds effective rate plus 0.5%. As of June 30, 2002, the credit facility carried interest at a weighted average rate of 5.25%. Interest is generally payable monthly through maturity on June 30, 2008. The scheduled reductions in the amount available under the credit facility may require principal repayments if the outstanding balance at that time exceeds the new maximum available amount under the credit facility. The credit facility is secured by substantially all of our assets.

            The scheduled reductions of the maximum commitment of the credit facility for fiscal 2002, the next four years and thereafter are as follows:

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            We must pay a quarterly unused commitment fee, which is based upon our total leverage to operating cash flow ratio and ranges from 0.25% to 0.375% of the unused portion of the maximum commitment. If the unused portion exceeds 50% of the maximum commitment, the fee is increased by 0.375%. For the three and six months ended June 30, 2002, our unused commitment fee was $42,000 and $107,000, respectively.

            We are required to satisfy financial covenants, which require us to maintain specified financial ratios and to comply with financial tests, such as ratios for maximum total leverage, minimum interest coverage and minimum fixed charges. As of June 30, 2002, these financial covenants included:

            As of June 30, 2002, we were in compliance with all applicable financial covenants. As of June 30, 2002, our total leverage ratio was 6.47 times operating cash flow, our interest coverage ratio was 1.87 times interest expense, and our fixed charges ratio was 1.26 times fixed charges.

            Failure to comply with these or any other of our financial covenants could result in the acceleration of the maturity of our outstanding debt.

            We believe that we will have sufficient liquidity and capital resources to permit us to meet our financial obligations for at least the next twelve months. Poor financial results, unanticipated opportunities or unanticipated expenses could give rise to additional financing requirements sooner than we expect; and, we may not secure financing when needed or on acceptable terms.

            The credit facility also prohibits us from paying cash dividends and restricts our ability to make other distributions with respect to our capital stock. The credit facility also contains other customary restrictive covenants. These covenants limit our ability to:

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Contractual Cash Obligations

            Our contractual cash obligations for the remainder of fiscal year 2002 and thereafter consist of the following:

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Other Commercial Commitments

            As of June 30, 2002, we had three collar agreements outstanding which required us to make interest payments based on the floor rate of interest and notional amount as stated in the collar agreements. As of June 30, 2002, the notional amount upon maturity of these collar agreements was $95.0 million. Due to the overall decline in interest rates, the estimated fair value of these collar agreements decreased and we recorded a $2.8 million liability for derivative financial instruments as of June 30, 2002. The estimated fair value of each interest rate collar agreement is based on the amounts the Company would expect to receive or pay to terminate the agreement. These amounts could become due and payable prior to the expiration of the agreements.

Critical Accounting Policies

            The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amount of revenues and expenses during the reporting period. We base our estimates on historical experience and assumptions we consider reasonable at the time of making those estimates. We evaluate our estimates on an on-going basis. Actual results may differ from these estimates under different circumstances or using different assumptions.

            We have recorded an allowance for doubtful accounts for estimated losses resulting from customers’ inability to make payments. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, then additional allowances may be required.

            We have recorded certain deferred tax assets, which we consider realizable due to the existence of certain deferred tax liabilities that are anticipated to reverse during similar future periods; however, we have recorded a valuation allowance to reduce our deferred tax assets related to net operating losses in certain states. If we were to determine that we would be unable to fully realize some or all of our remaining deferred tax assets in the future, an adjustment to our deferred tax assets would be recorded as an expense in the period such determination was made.

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            We have significant amounts of property and equipment, recorded in our financial statements. We assess the recoverability of our property and equipment on an on-going basis using estimates of future undiscounted cash flows that we expect to generate from these assets. Our radio stations operate in competitive markets and as such could experience adverse changes in listenership and cash flows. These adverse changes may result in an impairment of our property and equipment and intangibles in the future.

            On January 1, 2002, we adopted SFAS 142, which requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead tested for impairment at least annually in accordance with the provisions of SFAS 142. To estimate the fair value of our FCC broadcasting licenses and goodwill for our initial impairment test as of January 1, 2002, we obtained appraisals from an independent appraisal company. Subsequent estimates of fair value, whether by appraisal or management estimates of future discounted cash flows, may result in an impairment of our FCC broadcasting licenses and goodwill in the future.

Recent Pronouncements

            In June 2001, the FASB issued SFAS 143, “Accounting for Asset Retirement Obligations.” SFAS 143 addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. SFAS 143 amends SFAS 19 and is effective for financial statements issued for fiscal years beginning after June 15, 2002. We have not completed our evaluation of SFAS 143; however, we do not anticipate that the adoption of SFAS 143 will have a material impact on our earnings or financial position upon adoption.

            In August 2001, the FASB issued SFAS 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” SFAS 144 addresses financial accounting and reporting for the impairment or disposal of long-lived assets. SFAS 144 is effective for financial statements issued for fiscal years beginning after December 15, 2001 and interim periods within those fiscal years. We have adopted SFAS 144 with no material impact on our consolidated financial statements.

            Market risk is the risk of loss arising from adverse changes in market rates and prices such as interest rates, foreign currency exchange rate and commodity prices. Our primary exposure to market risk is interest rate risk associated with our credit facility. Amounts borrowed under our credit facility incur interest at the London Interbank Offered Rate, or LIBOR, plus additional basis points depending on the outstanding balance under our credit facility. As of June 30, 2002, $199.5 million was outstanding under our credit facility. We evaluate our exposure to interest rate risk by monitoring changes in interest rates in the market place.

            To manage interest rate risk associated with our credit agreement, we have entered into three interest rate collar agreements and one cap agreement. Under the collar agreements, our base LIBOR cannot exceed the cap interest rate and our base LIBOR cannot fall below our floor interest rate. Under the cap agreement, our base LIBOR cannot exceed the cap interest rate. Notional amounts are used to calculate the contractual payments to be exchanged under the contract. As of December 31, 2001 and June 30, 2002, the notional amount upon maturity of these cap and collar agreements was $115.0 million and $105.0 million, respectively. As of June 30, 2002, our collar and cap agreements are summarized in the following chart:

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PART II OTHER INFORMATION

            We currently and from time to time are involved in litigation incidental to the conduct of our business, but we are not a party to any lawsuit or proceeding which, in the opinion of management, is likely to have a material adverse effect on us.

            Not applicable.

            Not applicable.

            We held our annual meeting of stockholders on April 23, 2002. The matters voted on at the meeting and the results of these votes are as follows:

            1.   Election of the following directors:

            2.   Ratification of the appointment of KPMG LLP as independent auditors.

            Not applicable.

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            (a)   Exhibits

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            (b)   No reports on Form 8-K were filed during the three months ended June 30, 2002

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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 thereunto duly authorized.