[May 06, 2016] |
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Media General, Inc. Announces First Quarter 2016 Results
Media General, Inc. ("Media General" or the "Company;" NYSE: MEG), one
of the nation's largest local media companies, today reported results
for the first quarter ended March 31, 2016.
Summary of Results for the First Quarter 2016
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Net revenues increased 16% to $343 million, compared to $297 million
in the prior year.
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Net local revenues, which include net local advertising revenues and
retransmission consent fees, increased 11% to $230 million, compared
to $207 million in the prior year.
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Net national revenues increased 1% to $50 million, compared to $49
million in the prior year.
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Net political revenues were $16 million, compared to $1 million in the
prior year.
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Net digital revenues increased 25% to $38 million, compared to $30
million in the prior year.
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Operating income, excluding merger related and restructuring expenses,
was $52 million, compared to $26 million in the prior year. Operating
loss inclusive of these expenses was $18 million, compared to
operating income of $21 million in the prior year, which is primarily
due to a $60 million one-time break-up fee paid to Meredith
Corporation in January 2016.
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Broadcast Cash Flow increased 31% to $102 million, compared to $78
million in the prior year.
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Adjusted EBITDA increased 31% to $94 million, compared to $72 million
in the prior year. Included in Adjusted EBITDA were $5.7 million of
losses from the Company's national digital businesses.1
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Loss per diluted share was $0.20, compared to loss per diluted share
of $0.06 in the prior year.2
Commenting on the Company's results, President and Chief Executive
Officer, Vincent L. Sadusky, said: "We commenced this historic year by
delivering terrific results in the first quarter. Political advertising
exceeded our expectations and helped drive 16% growth in total net
revenues and 31% growth in Adjusted EBITDA. Excluding political, total
net revenues grew 11% versus the prior year. Additional key drivers for
our performance were an increase in pay-TV subscriber fees and diligent
expense management."
"Looking ahead, we remain focused on our operating initiatives and
preparing for our combination with Nexstar. I am pleased with the
progress we are making to unite our two strong local media companies in
order to better serve viewers and advertisers."
Recent Operational Highlights
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Time sales, including political time sales and digital revenue, grew
12% over the first quarter in the prior year.
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The automotive category, which represented 26% of gross local and
national time sales in the first quarter, increased 4%, compared to
the prior year.
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The Company signed an agreement with Katz Television Group to serve as
the national representation firm for its owned and operated television
stations.
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The Company's television stations rank number one or number two in
local news in 72% of the its broadcast markets.3 In
addition, the Company's television station websites rank number one or
number two in 61% of their measured markets.4
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The Company reached new retransmission consent agreements with DISH
Network and other multichannel video programming distributors,
representing 14% of total subscribers during the quarter.
Key Balance Sheet and Cash Flow Items
Total debt outstanding (including capital leases) net of cash, was $2.2
billion, as of both March 31, 2016 and December 31, 2015. Cash and cash
equivalent balances as of March 31, 2016 were $34 million, compared to
$41 million as of December 31, 2015. The Company has a $150 million
revolving credit facility that was undrawn, with $146 million of
availability as of March 31, 2016. Consolidated net leverage, as defined
in the credit agreement governing the senior secured credit facility,
was 5x as of March 31, 2016. Components of cash flow in the first
quarter of 2016 included capital expenditures of $6.8 million.
Business Outlook
The Company expects that net revenues for the second quarter of 2016
will increase in the range of 13% to 17% (or $40 million to $54
million), as compared to the prior year.
The Company expects direct operating and selling, general and
administrative expenses to increase in the range of 13% to 14% (or $27
million to $29 million) as compared to $213 million in the second
quarter of 2015.
The Company's current outlook for revenues, expenses and cash flow items
for the second quarter of 2016, excluding special items, are anticipated
to be in the following ranges:
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$ millions
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Second Quarter of 2016
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Net broadcast revenues
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$319 to $328
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Net digital revenues
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$42 to $47
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Total net revenues
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$361 to $375
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Direct operating and selling, general and administrative expenses
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$240 to $242
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Amortization of program rights
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$11 to $13
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Cash payments for programming
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$11 to $13
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Corporate and other expenses
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$10 to $11
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Corporate non-cash share-based compensation expense
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$2
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Adjusted EBITDA5
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$102 to $111
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Depreciation and amortization of intangibles
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$39 to $41
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Cash capital expenditures
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$15 to $18
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Cash interest expense
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$28
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Principal amortization of term loans and finance lease obligations
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$2
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Cash taxes
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$2
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The Company advises that all of the information and factors set forth
above are subject to risks, uncertainties and assumptions (see "Forward
Looking Statements" below) which could individually or collectively
cause actual results to differ materially from those projected above.
Conference Call
The Company will hold a conference call to discuss its first quarter
2016 results today, May 6, 2016, at 10:00 AM Eastern Time. To
participate in the call, please dial 1-888-218-8172 for U.S. callers and
1-913-312-0391 for international callers. The call-in pass code is
3681407. Callers who intend to participate in the call should dial-in 10
minutes before the start of the call to ensure access. The conference
call will also be webcast simultaneously from the Company's website, www.mediageneral.com,
and can be accessed there through a link on the home page. For those
unavailable to participate in the live teleconference, a replay will be
accessible via the Investor Relations section of www.mediageneral.com
or by dialing 1-888-203-1112 and entering the same pass code as above.
The telephone replay will be available through May 20, 2016.
Access to Non-GAAP Financial Measures and Other
Supplemental Financial Data
The Company reports and discusses its operating results using financial
measures consistent with generally accepted accounting principles
("GAAP"). Non-GAAP financial measures such as Broadcast Cash Flow
("BCF"), Earnings Before Interest, Taxes, Depreciation and Amortization,
as adjusted ("Adjusted EBITDA") and Free Cash Flow ("FCF") should not be
viewed as alternatives or substitutes for GAAP reporting. However, BCF,
Adjusted EBITDA and FCF are common supplemental measures of performance
used by investors, lenders, rating agencies and financial analysts. As a
result, these non-GAAP measures can provide certain additional insight
about the Company and its stations; the Company's ability to fund
acquisitions, investments and working capital needs; the Company's
ability to service its debt; the Company's performance versus other peer
companies in its industry; and other operating performance trends for
its businesses. The Company makes available on its website
reconciliations of BCF, Adjusted EBITDA and FCF to its operating income,
a GAAP reporting measure. In addition, the Company provides additional
information on its website, at the same location, regarding historical
revenue by source, pro forma income statement information and certain
other components of cash flow. Interested parties should go to the
Investor Relations section of www.mediageneral.com.
Forward-Looking Statements
The information discussed in this press release, particularly in the
section with the heading "Business Outlook," includes forward-looking
statements about the Company's future operating results within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of
the Securities Exchange Act of 1934. The Company based these
forward-looking statements on its current assumptions, knowledge,
estimates and projections about factors that could affect its future
operations. Although the Company believes that its assumptions made in
connection with the forward-looking statements are reasonable, no
assurances can be given that those assumptions and expectations will
prove to be correct. Statements in this press release that are
forward-looking include, but are not limited to, changes in direct
operating, selling, general and administrative expenses; changes in net
broadcast, digital, barter and other revenues; changes in direct
operating, selling, general and administrative, station and corporate
non-cash share-based compensation, amortization of program rights and
corporate and other expenses; and cash payments for programming;
depreciation and amortization of intangibles; cash capital expenditures;
cash interest expense and principal amortization; and cash tax payments
and effective tax rates. These forward-looking statements are subject to
various risks, uncertainties and assumptions which may cause these
expectations and assumptions not to occur or to differ materially from
those outcomes projected in the forward-looking statements. Such risks
and uncertainties include, but are not limited to: the impact of the
proposed business combination Nexstar Broadcasting Group, Inc.;
volatility of advertising revenue; restrictions on the Company's
operations as a result of its indebtedness; the ability to renew
retransmission consent agreements; changes in government regulations and
the ability to obtain necessary consents; changes in or terminations of
network affiliation agreements; competition; changes in audience share
or ratings; and the potential influence of certain shareholders,
including Standard General L.P. and its affiliates; and other risks
discussed in the Company's Annual Report on Form 10-K and other filings
made with the SEC (News - Alert) (which are available on the Investor Relations section
of www.mediageneral.com,
or at www.sec.gov),
which are incorporated in this release by reference. The forward-looking
statements included in this release are made only as of the date of this
release and the Company undertakes no obligation to publicly update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise, unless otherwise required to by
applicable law.
About Media General
Media General is one of the nation's largest local media companies that
owns, operates or services 71 television stations in 48 markets. Our
robust portfolio of broadcast, digital and mobile products informs and
engages 23% of U.S. TV households and nearly 40% of the U.S. Internet
audience.
Media General has one of the industry's largest and most diverse digital
media businesses that includes Federated Media, HYFN and Dedicated
Media. With unmatched local-to-national reach and integrated marketing
solutions, Media General is a one-stop-shop for agencies and brands that
want to effectively and efficiently reach their target audiences across
all screens.
Media General trades on the NYSE under the symbol "MEG." For more
information, visit www.mediageneral.com.
1 In the quarter, operating income for the national digital
businesses was a loss of $9.6 million. Adding back depreciation and
amortization of $3.9 million resulted in an Adjusted EBITDA loss of $5.7
million. 2 Operating loss was driven by a $60 million
one-time break-up fee paid to Meredith Corporation in January 2016. 3
Nielsen Media Research February 2016 ratings report; average rank of
Media General's ABC/CBS/FOX/NBC affiliated television stations for
Morning, Midday, Early News, Evening News and Late News with Adults
25-54. All Nielsen data included in this release represents Nielsen's
estimates, and Nielsen has neither reviewed nor approved the data
included in this release. 4 Comscore Media Metrix; Local
Market; Desktop Only, March 2016 (3 book rolling average), ABC, CBS,
NBC, Fox sites only 5Includes expected dilution from the
Company's national digital business of $2 to $4 million.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160506005144/en/
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