Nexstar Broadcasting Group Reports 2004 Third Quarter Results.IRVING, Texas Irving (pronounced 'er-ving') is a city located in the U.S. state of Texas within Dallas County. According to the 2000 U.S. Census, the city population was 191,615; the 2006 estimate was 201,927 according to the North Central Texas Council of Governments, and 196,084 according to -- Nexstar Broadcasting Group, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : NXST) today reported financial results for the third quarter and nine-month period ended September September: see month. 30, 2004 in line with updated guidance issued on October October: see month. 5, 2004. Summary 2004 Third Quarter Highlights: Reported total net revenue for the 2004 third quarter was $59.9 million, an increase of 13.3% over 2003 third quarter net revenue of $52.9 million. Nexstar's updated guidance was for an increase of 12.0% - 13.0%. On a pro-forma basis (as if the acquisitions of WUTR WUTR is the ABC affiliate for Utica, New York. The station is owned by Mission Broadcasting (and thus is operated by Nexstar Broadcasting Group, along with WFXV and WPNY-LP) and broadcasts its signal on UHF channel 20, with a digital signal on channel 30. in Utica Utica, ancient city, N Africa Utica (y  `tĭkə), ancient N African city, c.25 mi (40 km) NW of Carthage. According to tradition, it was founded by Phoenicians from Tyre c. , NY
by Mission Broadcasting Mission Broadcasting, Inc. is a television station group that owns 15 television stations operated by Nexstar Broadcasting. The group's President is David S. Smith.The broadcasting group was founded in 1998 and was founded by Smith[1]. , Inc. and KLST KLST is the CBS affiliate serving San Angelo, Texas, in the United States. It is owned by the Irving, TX based Nexstar Broadcasting Group. KLST was purchased by Nexstar Broadcasting in 2004 from the Jewell Television Corporation. San Angelo San Angelo (săn ăn`jəlō), city (1990 pop. 84,474), seat of Tom Green co., W Tex., where two forks join to form the Concho River; laid out 1869, inc. 1903. , TX and KFTA/KNWA in Ft. Smith-Fayetteville, AR by Nexstar were completed on July July: see month. 1, 2003), total advertising revenue increased 11.1% to $60.6 million from $54.5 million in the third quarter of 2003. Nexstar's updated guidance was for an increase of 10.0% - 11.0%. Pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma station direct operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , SG&A expenses and cash program payments decreased 5.8% to $32.4 million from $34.4 million, compared to updated guidance of a 5.0% decrease. The following tables summarizes highlights for the 2004 third quarter:
Summary 2004 Third Quarter Highlights:
(dollars and shares in millions, except per Three Months
share data) Ended
------------------------------------------- September 30,
2004 2003 Change
---------------------
Gross political advertising revenue $ 6.1 $ 1.0 479.1%
Gross local and national advertising
revenue, excluding political $54.5 $50.6 7.8%
Total gross advertising revenue $60.6 $51.6 17.3%
Total net revenue (1) $59.9 $52.9 13.3%
Station direct operating expenses,
SG&A expenses and cash program payments $32.4 $31.4 3.4%
Broadcast cash flow (2) $22.7 $16.7 35.5%
Corporate expenses $ 2.6 $ 3.5 (25.3)%
Adjusted EBITDA (2) $20.0 $13.2 51.7%
Net loss attributable to common
shareholders (3) $(5.7)$(21.2)(73.1)%
Diluted net loss per share attributable
to common shareholders $(0.20)$(1.38)(85.5)%
Weighted basic and diluted shares outstanding 28.4 15.4
Free cash flow (2) $ 5.7 $ 1.2 391.4%
Summary Pro Forma 2004 Third Quarter Highlights
(2)(4):
-----------------------------------------------
Total gross advertising revenue (includes
political, local & national) $60.6 $54.5 11.1%
Total net revenue $59.9 $55.4 8.0%
Station direct operating expenses,
SG&A expenses and cash program payments $32.4 $34.4 (5.8)%
(1) Total net revenue is the sum of total gross advertising revenue,
network compensation, trade and barter revenue, and other sources
of revenue, less national rep and agency commissions.
(2) "Broadcast cash flow", "adjusted EBITDA", "free cash flow" and
"Pro Forma" results are non-GAAP financial measures. For a
definition of these measures and reconciliation to comparable
GAAP financial results, please see the "Definitions and
Disclosure Regarding non-GAAP Financial Information" section and
supplemental reconciliation tables at the end of this release.
(3) The 2004 third quarter net loss attributable to common
shareholders includes a $1.9 million loss on the extinguishment
of debt.
(4) Pro forma results do not include contributions from WTVO-TV,
which Mission Broadcasting, Inc., Nexstar's broadcasting
associate, entered into a purchase agreement on October 5, 2004.
Accordingly, pro forma and reported results for the 2004 third
quarter are the same.
CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Comment Perry A. Sook, Chairman, President and Chief Executive Officer of Nexstar Broadcasting Group, Inc., commented, "Third quarter results reflect an increase in political advertising revenue at the Company's television stations in Pennsylvania This is a list of broadcast television stations serving cities in the U.S. state of Pennsylvania. Full-power stations Area served City of license ch Callsign Network Allentown Allentown 39 WLVT-TV PBS and Missouri Missouri, state, United States Missouri (mĭz  r`ē, –ə), one of the midwestern states of the United States. , driven
by spending on Presidential and state-wide elections. While total
political advertising revenue fell short of our original expectations,
the Company's stations captured a significant share of the
political advertising revenue spent in our markets, which we believe
demonstrates the strong appeal of our high quality local news
programming."During the period, the Company's stations also captured over $5.0 million of Summer Olympics-related advertising revenue and saw growth in local and national advertising categories, which we believe reflects continuing advertiser ad·ver·tise v. ad·ver·tised, ad·ver·tis·ing, ad·ver·tis·es v.tr. 1. To make public announcement of, especially to proclaim the qualities or advantages of (a product or business) so as to increase interest in broadcast television. "We continue to focus on improving the stations we've we've Contraction of we have. we've have recently acquired or to which we've begun providing services. On a pro forma basis, station direct operating expenses, selling, general and administrative expenses and cash program payments decreased 5.8% over year-ago levels, demonstrating our continued focus on cost reduction. The combination of revenue growth and careful expense management at both the station and corporate level helped us achieve impressive growth in broadcast cash flow, adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become and free cash flow. "Approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 60% of our portfolio are developing television stations not yet maximizing max·i·mize tr.v. max·i·mized, max·i·miz·ing, max·i·miz·es 1. To increase or make as great as possible: their operating efficiency or top line performance. We are making steady and tangible Possessing a physical form that can be touched or felt. Tangible refers to that which can be seen, weighed, measured, or apprehended by the senses. A tangible object is something that is real and substantial. An automobile is an example of tangible Personal Property. progress toward improving the performance of these developing stations and look forward delivering additional gains in 2005, which will support our efforts to reduce debt and strengthen the balance sheet. "Mission Broadcasting's agreement to acquire WTVO WTVO (Channel 17) is the Rockford, Illinois-based affiliate of the ABC television network. The station is owned by Mission Broadcasting, a subsidiary of Nexstar Broadcasting Group. will create an opportunity for Nexstar to both improve a developing station and derive de·rive v. 1. To obtain or receive from a source. 2. To produce or obtain a chemical compound from another substance by chemical reaction. economic benefits from operating, or providing services to, more than one station in the Rockford, Illinois Rockford is a mid-sized city located on both banks of the Rock River in far northern Illinois. Rockford is often referred to as "The Forest City" and is the county seat of Winnebago County, Illinois, USA. As reported in the 2000 U.S. market. We expect to realize significant cost savings in the periods ahead as we transition the station to the Nexstar operating model Operating Model is a term that is used in many contexts. In essence an operating model describes how an organization operates across both business and technology domains. The Operating Model describes what is important for the organization. . Upon full integration of the station, which is expected to occur in the first quarter of 2005, we anticipate that WTVO will deliver approximately $5.5 - 6.0 million of reported net revenue and approximately $3.0 million of station direct operating expenses, SG&A expenses and cash program payments to Nexstar's 2005 financial results." Additional Expense Detail on Reported 2004 Third Quarter Results Depreciation and amortization was $10.4 million in the third quarter of 2004, compared to $11.7 million in the third quarter of 2003. The decrease in depreciation and amortization expense for the third quarter of 2004 is primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to depreciable depreciable Of, relating to, or being a long-term tangible asset that is subject to depreciation. assets at certain stations becoming fully depreciated Fully depreciated An asset that has already been charged with the maximum amount of depreciation allowed by the IRS for accounting purposes. fully depreciated Of or relating to a fixed asset that has been depreciated to a book value of zero. in the first quarter of 2004 and amortizable am·or·tize tr.v. am·or·tized, am·or·tiz·ing, am·or·tiz·es 1. To liquidate (a debt, such as a mortgage) by installment payments or payment into a sinking fund. 2. assets at certain stations becoming fully amortized in the third quarter of 2004. Interest expense in the third quarter of 2004 was $13.1 million, compared to $14.1 million for the same period in 2003. The decrease is primarily attributed to lower interest rates on our senior credit facilities credit facilities npl → facilidades fpl de crédito credit facilities npl → facilités fpl de paiement credit facilities and the redemption The liberation of an estate in real property from a mortgage. Redemption is the process by which land that has been mortgaged or pledged is bought back or reclaimed. It is accomplished through a payment of the debt owed or a fulfillment of the other conditions. of Nexstar's 16% senior discount notes in January January: see month. 2004. Capital expenditures in the third quarter of 2004 were $3.3 million, compared to $2.3 million in the third quarter of 2003. Cash interest for the third quarter of 2004 was $10.3 million, compared to $9.7 million in the third quarter of 2003. Cash interest excludes non-cash interest related to amortization of debt financing Debt Financing When a firm raises money for working capital or capital expenditures by selling bonds, bills, or notes to individual and/or institutional investors. In return for lending the money, the individuals or institutions become creditors and receive a promise to repay costs and accretion The act of adding portions of soil to the soil already in possession of the owner by gradual deposition through the operation of natural causes. The growth of the value of a particular item given to a person as a specific bequest under the provisions of a will between the of the discount on Nexstar's 11.375% senior discount notes and 12% senior subordinated Subordinated A claim ranked lower in priority than other claims. Common stock claims are always subordinated to debt. notes. Liquidity and Cash Flow Free cash flow for the 2004 third quarter rose to $5.7 million from $1.2 million in the third quarter of 2003. At September 30, 2004, the Company's total debt was approximately $606.5 million and cash balances were $14.6 million. Nexstar Broadcasting, Inc., a subsidiary of the Company, and Mission Broadcasting, Inc., are borrowers under senior secured credit facilities. As defined per the credit agreement, consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: total debt under the credit facilities of $500.9 million at September 30, 2004, net of cash on hand, resulted in a leverage ratio as defined per the credit agreement of 6.3x, compared to a permitted leverage covenant covenant (kŭv`ənənt), agreement entered into voluntarily by two or more parties to do or refrain from doing certain acts. In the Bible and in theology the covenant is the agreement or engagement of God with man as revealed in the of 7.0x. Covenants under the credit facilities exclude Nexstar Finance Holdings, LLC's 11.375 notes, which have accreted to $88.2 million, as of September 30, 2004. WTVO Acquisition Subsequent to the close of the third quarter, Nexstar announced that Mission Broadcasting, Inc., Nexstar's broadcasting associate, entered into a definitive agreement to acquire WTVO-TV, the ABC ABC in full American Broadcasting Co. Major U.S. television network. It began when the expanding national radio network NBC split into the separate Red and Blue networks in 1928. affiliate Affiliate Relationship between two companies when one company owns substantial interest, but less than a majority of the voting stock of another company, or when two companies are both subsidiaries of a third company. See: Subsidiaries, parent company. serving Rockford, Illinois, for $20.75 million. Nexstar entered into local service agreements with Mission for WTVO and began providing services to the station through its owned and operated station, WQRF-TV WQRF-TV (Fox 39) is the Rockford, Illinois-based television affiliate of FOX. The station began its operations in November 1978, and became the area's Fox station in August 1989. , on November November: see month. 1, 2004. Accordingly, contributions from WTVO are not included in reported or pro forma results for three- and nine-month periods ended September 30, 2004. For the period ending December December: see month. 31, 2004, WTVO is expected to contribute approximately $1.0 million to the Company's reported net revenue and add approximately $0.8 million of direct station operating expenses and selling, general and administrative expenses and program payments to the Company's cost structure. Summary 2004 Fourth-Quarter Outlook Nexstar issued the following outlook for the three-month period ending December 31, 2004:
Reported 2004 Fourth Quarter Three Months Ended
Estimates (in millions) December 31,
2004 - 2003 - Approximate
Est. Actual Change
----------------------------------
Gross political advertising
revenue $12.5 - 13.0 $2.2 468.2 - 490.9%
Gross local and national
advertising revenue,
excluding political $55.5 - 57.0 $54.5 1.8 - 4.6%
Total gross advertising revenue $68.0 - 70.0 $56.7 19.9 - 23.5%
Total net revenue $66.0 - 68.0 $59.0 11.9 - 15.2%
Station direct operating expenses,
SG&A expenses
and cash program payments $34.0 - 35.0 $33.7 0.8 - 3.9%
Reflecting this outlook and 2004 year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. financial results, Nexstar expects to report total net revenue of $241.3 - 243.3 million and station direct operating expenses, SG&A expenses and cash program payments of $129.4 - 130.4 million for the full year ending December 31, 2004. The Company's financial outlook for the fourth quarter ending December 31, 2004 assumes there will be no new acquisitions or local service agreements entered into during the period beyond WTVO. The outlook also assumes no debt restructuring Debt Restructuring A method used by companies with outstanding debt obligations to alter the terms of the debt agreements in order to achieve some advantage. Notes: costs will be reported during the period. The outlook is subject to, and could be affected by: economic developments, regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. developments, the timing of any investments, dispositions or other transactions, and major news events, among other circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or . Reference is made to the "Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " statement regarding forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. comments at the end of this press release. While the Company may, from time to time, issue updated guidance, it assumes no obligation to do so. Third-Quarter Conference Call Nexstar will host a conference call at 10:00 a.m. ET today. Senior management will discuss the financial results and host a question and answer session. A live audio webcast of the call will be accessible to the public on the Company's web site, www.nexstar.tv. A recording of the webcast will subsequently be archived on the site. The dial in number for the audio conference call is 800-946-0782; no access code is needed. A replay of the call will be available through January 3, 2005 by dialing 888-203-1112, and entering access code 904600. This replay dial-in number and access code replaces the original call replay information issued on October 5, 2004. Definitions and Disclosures Regarding non-GAAP Financial Information Broadcast cash flow is calculated as operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. plus corporate expenses plus depreciation and amortization of intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. and broadcast rights (excluding barter barter: see exchange. barter Direct exchange of goods or services without the use of money or any other intervening medium of exchange. Barter is conducted either according to established rates of exchange or by bargaining. ) plus other non-recurring items minus broadcast rights payments. Adjusted EBITDA is calculated as broadcast cash flow less corporate expenses. Free cash flow is calculated as income from operations plus depreciation and amortization of intangible assets and broadcast rights (excluding barter), less payments for broadcast rights, cash interest expense, capital expenditures and net cash taxes. Pro forma results reflect the completed and pending acquisitions of certain television stations as if they had occurred on January 1, 2003. Pro Forma results for the three-month periods ended September 30, 2004 and 2003 include Nexstar's pending acquisitions of KFTA/KNWA in Fort Smith-Fayetteville-Springdale-Rogers, AR, which Nexstar began operating under a TBA TBA See: To be announced in October 2003, and KLST in San Angelo, TX, which Nexstar began operating under a TBA in June June: see month. 2004. These periods also include the acquisition of WUTR in Utica, NY by Mission Broadcasting, Inc., Nexstar's broadcasting associate, which Mission completed in April 2004, and Mission's acquisition of WBAK in Terre Haute Terre Haute (tĕr`ə hōt, tĕr`ē hŭt), city (1990 pop. 51,483), seat of Vigo co., W Ind., on the Wabash River; inc. 1816. , IN, which Mission began operating under a TBA in May 2003. Pro forma results for the nine-month periods ended September 30, 2004 and 2003 include the stations mentioned above, as well as KARK in Little Rock, AR and WDHN WDHN is an ABC-affiliated television station in Dothan, Alabama, broadcasting on channel 18. The station's transmitter is located behind its studios on Route 52 in Webb, Alabama, approximately 6 miles east of Dothan. The signal has little reach outside the greater Dothan area. in Dothan Dothan, in the Bible Dothan (dō`thăn) or Dothaim (dōthā`ĭm), city, central ancient Palestine, in the uplands NE of Samaria. , AL, both of which Nexstar began operating under a TBA in February February: see month. 2003. Broadcast cash flow, adjusted EBITDA, free cash flow and Pro Forma results are non-GAAP financial measures. Nexstar believes the presentation of these non-GAAP measures are useful to investors because they are used by lenders to measure the Company's ability to service debt; by industry analysts to determine the market value of stations and their operating performance; by management to identify the cash available to service debt, make strategic acquisitions and investments, maintain capital assets capital assets n. equipment, property, and funds owned by a business. (See: capital, capital account) and fund ongoing operations and working capital needs; and, because they reflect the most up-to-date operating results of the stations inclusive of inclusive of prep. Taking into consideration or account; including. pending acquisitions, TBAs or LMAs. Management believes they also provide an additional basis from which investors can establish forecasts and valuations for the Company's business. For a reconciliation of these non-GAAP financial measurements to the GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). financial results cited in this news announcement, please see the supplemental tables at the end of this release. About Nexstar Broadcasting Group, Inc. Nexstar Broadcasting Group, upon completion of all pending transactions, will own, operate, program or provide sales and other services to 46 television stations in 27 markets in the states of Illinois Illinois, river, United States Illinois, river, 273 mi (439 km) long, formed by the confluence of the Des Plaines and Kankakee rivers, NE Ill., and flowing SW to the Mississippi at Grafton, Ill. It is an important commercial and recreational waterway. , Indiana Indiana, state, United States Indiana, midwestern state in the N central United States. It is bordered by Lake Michigan and the state of Michigan (N), Ohio (E), Kentucky, across the Ohio R. (S), and Illinois (W). , Maryland Maryland (mâr`ələnd), one of the Middle Atlantic states of the United States. It is bounded by Delaware and the Atlantic Ocean (E), the District of Columbia (S), Virginia and West Virginia (S, W), and Pennsylvania (N). , Missouri, Montana Montana (mŏntăn`ə), Rocky Mt. state in the NW United States. It is bounded by North Dakota and South Dakota (E), Wyoming (S), Idaho (W), and the Canadian provinces of British Columbia, Alberta, and Saskatchewan (N). , Texas, Pennsylvania Pennsylvania (pĕnsəlvā`nyə), one of the Middle Atlantic states of the United States. It is bordered by New Jersey, across the Delaware River (E), Delaware (SE), Maryland (S), West Virginia (SW), Ohio (W), and Lake Erie and New York , Louisiana Louisiana (ləwē'zēăn`ə, l ē'–), state in the S central United States. It is bounded by Mississippi, with the Mississippi R. , Arkansas Arkansas, river, United StatesArkansas (ärkăn`zəs, är`kənsô'), river, c.1,450 mi (2,330 km) long, rising in the Rocky Mts., central Colo. , Alabama Alabama, indigenous people of North America Alabama (ăləbăm`ə), indigenous people of North America whose language belongs to the Muskogean branch of the Hokan-Siouan linguistic stock (see Native American languages). and New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of . The Company's television station group includes affiliates of NBC NBC in full National Broadcasting Co. Major U.S. commercial broadcasting company. It was formed in 1926 by RCA Corp., General Electric Co. (GE), and Westinghouse and was the first U.S. company to operate a broadcast network. , CBS (Cell Broadcast Service) See cell broadcast. , ABC, Fox and UPN UPN User Principal Name (Microsoft Windows 2000) UPN United Paramount Network UPN Unión del Pueblo Navarro (Navarrese People Union) UPN Umgekehrte Polnische Notation , and reaches approximately 7.4% of all U.S. television households. The following is a list of Nexstar's owned properties, as well as those with which it has local service agreements:
Market
Rank Market Station Affiliation Status(1)
------ -------------------------------- ------- ----------- ----------
8 Washington, DC/Hagerstown, MD(2) WHAG NBC O&O
53 Wilkes Barre-Scranton, PA WBRE NBC O&O
WYOU CBS LSA
56 Little Rock-Pine Bluff, AR KARK NBC O&O
75 Rochester, NY WROC CBS O&O
78 Springfield, MO KOLR CBS LSA
KDEB Fox O&O
81 Shreveport, LA KTAL NBC O&O
82 Champaign-Springfield-Decatur,
IL WCIA CBS O&O
WCFN UPN O&O
99 Evansville, IN WTVW Fox O&O
105 Ft. Wayne, IN WFFT Fox O&O
108 Ft. Smith - Fayetteville - KFTA(3) NBC Acq.
Springdale - Rogers, AR /KNWA(3) Pending
117 Peoria-Bloomington, IL WMBD CBS O&O
WYZZ Fox LSA
129 Amarillo, TX KAMR NBC O&O
KCIT Fox LSA
KCPN-LP -- LSA
133 Rockford, IL WQRF Fox O&O
WTVO ABC LSA
(Acq.
Pending by
Mission)
135 Monroe, LA-El Dorado, AR KARD Fox O&O
138 Beaumont-Port Arthur, TX KBTV NBC O&O
141 Erie, PA WJET ABC O&O
WFXP Fox LSA
143 Wichita Falls, TX- Lawton, OK KFDX NBC O&O
KJTL Fox LSA
KJBO-LP UPN LSA
146 Joplin, MO-Pittsburg, KS KSNF NBC O&O
KODE ABC LSA
147 Lubbock, TX KLBK CBS O&O
KAMC ABC LSA
148 Terre Haute, IN WTWO NBC O&O
WBAK Fox LSA
157 Odessa-Midland, TX KMID ABC O&O
163 Abilene-Sweetwater, TX KTAB CBS O&O
KRBC NBC LSA
167 Utica, NY WUTR ABC LSA
WFXV Fox O&O
WPNY-LP UPN O&O
170 Billings, MT KSVI ABC O&O
KHMT Fox LSA
171 Dothan, AL WDHN ABC O&O
195 San Angelo, TX KSAN NBC LSA
KLST CBS Acq.
Pending
201 St. Joseph, MO KQTV ABC O&O
(1) O&O refers to stations that Nexstar owns and operates. LSA, or
local service agreement, is the general term we use to refer to a
contract under which we provide services to a station owned and/
or operated by an independent third party. Local service
agreements include time brokerage agreements, shared services
agreements, joint sales agreements, and outsourcing agreements.
(2) Although WHAG is located within the Washington, DC DMA, its
signal does not reach the entire Washington, DC metropolitan
area. WHAG serves the Hagerstown, MD sub-market within the DMA.
(3) Effective August 13, 2004, KPOM changed its call letters to KFTA
and KFAA changed its call letters to KNWA.
Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This news release includes forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events. Forward-looking statements include information preceded by, followed by, or that includes the words "guidance," "believes," "expects," "anticipates," "could," or similar expressions. For these statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. The forward-looking statements contained in this news release, concerning, among other things, changes in net revenue, cash flow and operating expenses, involve risks and uncertainties, and are subject to change based on various important factors, including the impact of changes in national and regional economies, our ability to service and refinance Refinance 1. When a business or person revises their payment schedule for repaying debt. 2. Replacing an older loan with a new loan offering better terms. Notes: When a business refinances they typically extend the maturity date. our outstanding debt, successful integration of acquired television stations (including achievement of synergies and cost reductions), pricing fluctuations in local and national advertising, future regulatory actions and conditions in the television stations' operating areas, competition from others in the broadcast television markets served by the Company, volatility Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the in programming costs, the effects of governmental regulation of broadcasting, industry consolidation, technological developments and major world news events. Unless required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this news release might not occur. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this release. For more details on factors that could affect these expectations, please see our filings with the Securities and Exchange Commission.
Nexstar Broadcasting Group, Inc.
Condensed Consolidated Statements of Operations
(dollars and shares in thousands, except per share amounts)
Three Months Nine Months
Ended Ended
September 30, September 30,
----------------- -----------------
2004 2003 2004 2003
----------------- -----------------
(Unaudited) (Unaudited)
Revenue (excluding trade and
barter) $63,948 $55,388 $185,634 $162,181
Less: commissions (8,571) (7,211) (24,821) (21,071)
-------- -------- -------- --------
Net broadcast revenue (excluding
trade and barter) 55,377 48,177 160,813 141,110
Trade and barter revenue 4,507 4,692 14,464 14,198
-------- -------- -------- --------
Total net revenue 59,884 52,869 175,277 155,308
-------- -------- -------- --------
Operating expenses:
Station direct operating expenses
(exclusive of depreciation and
amortization shown separately
below) 14,832 14,128 43,323 40,152
Selling, general, and
administrative expenses
(exclusive of depreciation and
amortization shown separately
below) 15,121 14,454 44,171 42,094
Merger related expenses - - 456 -
Time brokerage agreement expenses 157 80 510 239
Trade and barter expense 4,807 4,795 14,378 14,131
Corporate expenses 2,620 3,506 6,861 8,230
Amortization of broadcast rights,
excluding barter 3,172 2,854 8,831 8,217
Amortization of intangible assets 6,308 6,529 20,197 17,708
Depreciation 4,107 5,173 13,438 15,352
-------- -------- -------- --------
Total operating expenses 51,124 51,519 152,165 146,123
-------- -------- -------- --------
Income from operations 8,760 1,350 23,112 9,185
Interest expense, including
amortization of debt financing
costs (13,132) (14,087) (39,005) (43,049)
Loss on extinguishment of debt (1,880) - (8,704) (5,814)
Interest income 29 147 62 471
Other income, net 862 974 4,568 2,847
-------- -------- -------- --------
Loss before income taxes (5,361) (11,616) (19,967) (36,360)
Income tax expense (924) (814) (2,837) (2,424)
-------- -------- -------- --------
Loss before cumulative effect of
change in accounting principle
and minority interest in
consolidated entity (6,285) (12,430) (22,804) (38,784)
Cumulative effect of change in
accounting principle, net of tax - (8,898) - (8,898)
Minority interest in consolidated
entity 583 158 1,563 263
-------- -------- -------- --------
Net loss $(5,702)$(21,170)$(21,241)$(47,419)
Accretion of preferred interests - - - (15,319)
-------- -------- -------- --------
Net loss attributable to common
shareholders $(5,702)$(21,170)$(21,241)$(62,738)
======== ======== ======== ========
Basic and diluted net loss per
share:
Net loss attributable to common
shareholders $(0.20) $(1.38) $(0.75) $(4.35)
Weighted average number of shares
outstanding:
Basic and diluted 28,363 15,352 28,363 14,432
Nexstar Broadcasting Group, Inc.
Reconciliation Between Actual Consolidated Statements of Operations
and Broadcast Cash Flow/Adjusted EBITDA (Non-GAAP Measures)
(dollars in thousands)
Three Months Nine Months
Ended Ended
September 30, September 30,
---------------- -----------------
2004 2003 2004 2003
-------- ------- -------- --------
(Unaudited) (Unaudited)
Income from operations $8,760 $1,350 $23,112 $9,185
Add:
Depreciation 4,107 5,173 13,438 15,352
Amortization of intangible assets 6,308 6,529 20,197 17,708
Amortization of broadcast rights,
excluding barter 3,172 2,854 8,831 8,217
Merger and related expenses - - 456 -
Time brokerage agreement expenses 157 80 510 239
Corporate expenses 2,620 3,506 6,861 8,230
Program buyouts - - 55 -
Less:
Payments for broadcast rights 2,467 2,776 7,898 8,273
-------- ------- -------- --------
Broadcast cash flow $22,657 $16,716 $65,562 $50,658
Less:
Corporate expenses 2,620 3,506 6,861 8,230
-------- ------- -------- --------
Adjusted EBITDA $20,037 $13,210 $58,701 $42,428
======== ======= ======== ========
Nexstar Broadcasting Group, Inc.
Reconciliation Between Actual Consolidated Statements of Operations
and Free Cash Flow (Non-GAAP Measure)
(dollars in thousands)
Three Months Nine Months
Ended Ended
September 30, September 30,
-------------- ----------------
2004 2003 2004 2003
------- ------ -------- -------
(Unaudited) (Unaudited)
Income from operations $8,760 $1,350 $23,112 $9,185
Add:
Depreciation 4,107 5,173 13,438 15,352
Amortization of intangible assets 6,308 6,529 20,197 17,708
Amortization of broadcast rights,
excluding barter 3,172 2,854 8,831 8,217
Less:
Payments for broadcast rights 2,467 2,776 7,898 8,273
Cash interest expense (1) 10,328 9,664 30,397 29,331
Capital expenditures 3,298 2,311 7,370 8,525
Cash taxes, net of refund 598 4 802 183
------- ------ -------- -------
Free Cash Flow $5,656 $1,151 $19,111 $4,150
======= ====== ======== =======
(1) Excludes non-cash interest related to amortization of debt
financing costs and accretion on Nexstar's 11.375% senior discount
notes and 12% senior subordinated notes. For the three- and nine-month
periods ended September 30, 2004, those amounts totaled $2,804 and
$8,608, respectively. For the three- and nine-month periods ended
September 30, 2003, those amounts totaled $4,423 and $13,718,
respectively.
Nexstar Broadcasting Group, Inc.
Reconciliation of Historical GAAP and Pro Forma Results (unaudited)
(Adjusted for WUTR & KLST) (dollars in thousands)
Q1 2003
Q1 2003 Pro
GAAP Adjustment Forma
-------- ---------- --------
Revenue
Local $30,041 $2,961 $33,002
National 14,435 1,507 15,942
Political 257 13 270
Network Compensation 2,088 67 2,155
Other 1,480 35 1,515
-------- ---------- --------
Gross Revenue 48,301 4,583 52,884
National Rep and Agency Commissions 6,207 703 6,910
-------- ---------- --------
Net Broadcast Revenue 42,094 3,880 45,974
Trade and Barter Revenue 5,160 166 5,326
-------- ---------- --------
Total Net Revenue 47,254 4,406 51,300
Station Direct Operating expenses, net of
trade 12,840 1,936 14,776
Selling, General and Administrative
expenses 12,921 2,161 15,082
Corporate Overhead 2,255 -- 2,255
Merger related expenses -- -- --
IPO related expenses -- -- --
Trade and barter expenses 5,200 146 5,346
Depreciation and amortization 10,756 183 10,939
Amortization of Broadcast rights,
excluding barter 2,706 107 2,813
-------- ---------- --------
Total operating expenses 46,678 4,533 51,211
Income (loss) from operations 576 (487) 89
Supplemental information:
Broadcast film payments 2,849 107 2,956
Overhead related to Quorum 1,106 43 1,149
Program buyouts and accelerated payments -- -- --
Q2 2003
Q2 2003 Pro
GAAP Adjustment Forma
-------- ---------- --------
Revenue
Local $35,690 $1,982 $37,672
National 17,464 1,169 18,633
Political 1,533 33 1,566
Network Compensation 2,169 38 2,207
Other 1,636 29 1,665
-------- ---------- --------
Gross Revenue 58,492 3,251 61,743
National Rep and Agency Commissions 7,653 515 8,168
-------- ---------- --------
Net Broadcast Revenue 50,839 2,736 53,575
Trade and Barter Revenue 4,346 56 4,402
-------- ---------- --------
Total Net Revenue 55,185 2,792 57,977
Station Direct Operating expenses, net of
trade 13,184 1,314 14,498
Selling, General and Administrative
expenses 14,878 1,623 16,501
Corporate Overhead 2,471 -- 2,471
Merger related expenses -- -- --
IPO related expenses -- -- --
Trade and barter expenses 4,136 65 4,201
Depreciation and amortization 10,602 91 10,693
Amortization of Broadcast rights,
excluding barter 2,655 107 2,762
-------- ---------- --------
Total operating expenses 47,926 3,200 51,126
Income (loss) from operations 7,259 (408) 6,851
Supplemental information:
Broadcast film payments 2,648 107 2,755
Overhead related to Quorum 1,093 -- 1,093
Program buyouts and accelerated payments -- -- --
Q3 2003
Q3 2003 Pro
GAAP Adjustment Forma
-------- ---------- --------
Revenue
Local $34,103 $1,885 $35,988
National 16,471 943 17,414
Political 1,045 50 1,095
Network Compensation 2,143 39 2,182
Other 1,626 23 1,649
-------- ---------- --------
Gross Revenue 55,388 2,940 58,328
National Rep and Agency Commissions 7,211 464 7,675
-------- ---------- --------
Net Broadcast Revenue 48,177 2,476 50,653
Trade and Barter Revenue 4,692 97 4,789
-------- ---------- --------
Total Net Revenue 52,869 2,573 55,442
Station Direct Operating expenses, net of
trade 14,128 1,332 15,460
Selling, General and Administrative
expenses 14,534 1,544 16,078
Corporate Overhead 3,506 -- 3,506
Merger related expenses -- -- --
IPO related expenses -- -- --
Trade and barter expenses 4,795 77 4,872
Depreciation and amortization 11,702 91 11,793
Amortization of Broadcast rights,
excluding barter 2,854 108 2,962
-------- ---------- --------
Total operating expenses 51,519 3,152 54,671
Income (loss) from operations 1,350 (579) 771
Supplemental information:
Broadcast film payments 2,776 108 2,884
Overhead related to Quorum 1,780 -- 1,780
Program buyouts and accelerated payments -- -- --
Q4 2003
Q4 2003 Pro
GAAP Adjustment Forma
-------- ---------- --------
Revenue
Local $37,861 $1,063 $38,924
National 16,586 637 17,223
Political 2,236 6 2,242
Network Compensation 1,929 41 1,970
Other 1,633 43 1,676
-------- ---------- --------
Gross Revenue 60,245 1,790 62,035
National Rep and Agency Commissions 7,812 259 8,071
-------- ---------- --------
Net Broadcast Revenue 52,433 1,531 53,964
Trade and Barter Revenue 6,591 67 6,658
-------- ---------- --------
Total Net Revenue 59,024 1,598 60,622
Station Direct Operating expenses, net of
trade 14,158 736 14,894
Selling, General and Administrative
expenses 15,435 975 16,410
Corporate Overhead 4,377 -- 4,377
Merger related expenses 11,754 -- 11,754
IPO related expenses 4,058 -- 4,058
Trade and barter expenses 6,445 64 6,509
Depreciation and amortization 12,341 91 12,432
Amortization of Broadcast rights,
excluding barter 3,605 108 3,713
-------- ---------- --------
Total operating expenses 72,173 1,974 74,147
Income (loss) from operations (13,149) (376) (13,525)
Supplemental information:
Broadcast film payments 4,123 108 4,231
Overhead related to Quorum 1,680 -- 1,680
Program buyouts and accelerated payments 1,152 -- 1,152
Note: Adjustments in the 2003 first quarter reflect contributions from
KARK in Little Rock, AR and WDHN in Dothan, AL, both of which Nexstar
began operating under a TBA in February 2003. Adjustments in the 2004
second quarter reflect contributions from WBAK in Terre Haute, IN,
which Mission began operating under a TBA in May 2003. Adjustments in
the 2003 fourth quarter reflect contributions from KFTA/KNWA in Fort
Smith-Fayetteville-Springdale-Rogers, AR, which Nexstar began
operating under a TBA in October 2003. Results for WTVO are not
reflected in pro forma results for any 2003 period, as Nexstar did not
begin providing services to the station until November 1, 2004.
Nexstar Broadcasting Group, Inc.
Reconciliation of Historical GAAP and ProForma Results (unaudited)
(Adjusted for WUTR & KLST) (dollars in thousands)
Q1 2004
Q1 2004 Pro
GAAP Adjustment Forma
-------- ---------- --------
Revenue
Local $33,849 $782 $34,631
National 16,075 470 16,545
Political 3,383 24 3,407
Network Compensation 2,078 32 2,110
Other 1,042 34 1,076
-------- ---------- --------
Gross Revenue 56,427 1,342 57,769
National Rep and Agency Commissions 7,459 196 7,655
-------- ---------- --------
Net Broadcast Revenue 48,968 1,146 50,114
Trade and Barter Revenue 5,268 48 5,316
-------- ---------- --------
Total Net Revenue 54,236 1,194 55,430
Station Direct Operating expenses, net of
trade 14,307 513 14,820
Selling, General and Administrative
expenses 14,458 600 15,058
Corporate Overhead 2,036 -- 2,036
Merger and time brokerage agreement
expenses 681 -- 681
Trade and barter expenses 5,049 61 5,110
Depreciation and amortization 12,043 98 12,141
Amortization of Broadcast rights,
excluding barter 3,003 113 3,116
-------- ---------- --------
Total operating expenses 51,577 1,385 52,962
Income (loss) from operations 2,659 (191) 2,468
Supplemental information:
Broadcast film payments 2,782 113 2,895
Q2 2004
Q2 2004 Pro
GAAP Adjustment Forma
--------- ---------- --------
Revenue
Local $39,066 $419 $39,485
National 18,485 244 18,729
Political 4,293 6 4,299
Network Compensation 2,151 14 2,165
Other 1,264 34 1,298
-------- ----- --------
Gross Revenue 65,259 717 65,976
National Rep and Agency Commissions 8,791 103 8,894
-------- ----- --------
Net Broadcast Revenue 56,468 614 57,082
Trade and Barter Revenue 4,688 23 4,711
-------- ----- --------
Total Net Revenue 61,156 637 61,793
Station Direct Operating expenses,
net of trade 14,184 243 14,427
Selling, General and Administrative
expenses 14,592 267 14,859
Corporate Overhead 2,205 -- 2,205
Merger and time brokerage agreement
expenses 128 -- 128
Trade and barter expenses 4,522 23 4,545
Depreciation and amortization 11,177 27 11,204
Amortization of Broadcast rights,
excluding barter 2,656 41 2,697
-------- ----- --------
Total operating expenses 49,464 601 50,065
Income (loss) from operations 11,692 36 11,728
Supplemental information:
Broadcast film payments 2,649 41 2,690
Q3 2004
Q3 2004 Pro
GAAP Adjustment Forma
-------- ---------- -------
Revenue
Local $36,876 $-- $36,876
National 17,627 -- 17,627
Political 6,052 -- 6,052
Network Compensation 2,181 -- 2,181
Other 1,212 -- 1,212
-------- ---------- --------
Gross Revenue 63,948 -- 63,948
National Rep and Agency Commissions 8,571 -- 8,571
-------- ---------- --------
Net Broadcast Revenue 55,377 -- 55,377
Trade and Barter Revenue 4,507 -- 4,507
-------- ---------- --------
Total Net Revenue 59,884 -- 59,884
Station Direct Operating expenses, net of
trade 14,832 -- 14,832
Selling, General and Administrative
expenses 15,121 -- 15,121
Corporate Overhead 2,620 -- 2,620
Time brokerage agreement expenses 157 -- 157
Trade and barter expenses 4,807 -- 4,807
Depreciation and amortization 10,415 -- 10,415
Amortization of Broadcast rights,
excluding barter 3,172 -- 3,172
-------- ---------- --------
Total operating expenses 51,124 -- 51,124
Income (loss) from operations 8,760 -- 8,760
Supplemental information:
Broadcast film payments 2,467 -- 2,467
Note: Adjustments in the 2004 first quarter reflect contributions from
KLST, which Nexstar began operating under a TBA in June 2004, and
WUTR, which Mission began operating on April 1, 2004 after completing
its acquisition of the station. Adjustments in the 2004 second
quarter reflect contributions from KLST in April and May 2004.
Results for WUTR in the 2004 second quarter are included in GAAP
results. Results for WTVO are not reflected in pro forma results
for the 2003 third quarter, as Nexstar did not begin providing
services to the station until November 1, 2004.
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