Nexstar Broadcasting Group Reports First Quarter Results.Business Editors IRVING, Texas--(BUSINESS WIRE)--May 11, 2004 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 first quarter ended March 31, 2004. Reported Results Net revenue for the quarter ended March 31, 2004 grew 14.8% to $54.2 million from $47.3 million in the first quarter of 2003. Comparisons between the first quarters of 2004 and 2003 reflect the normal political advertising cycle in an even-year period. First quarter political advertising revenues in 2004 were approximately $3.4 million, compared to approximately $0.3 million in the first quarter of 2003, due to increased spending in 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. , 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 , Missouri, Arkansas and Louisiana. Excluding political advertising, net revenue for the 2004 first quarter increased 8.2%. Net loss attributable to common shareholders for the three months ended March 31, 2004 decreased 37.0% to $16.7 million, or $0.59 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, from $26.5 million, $1.97 per diluted share, in the first quarter of 2003. The net loss in the first quarter of 2004 includes a loss on extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. debt of approximately $6.8 million. Net loss in the first quarter of 2003 includes a loss on extinguishment of debt totaling approximately $5.8 million 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 preferred interest totaling approximately $9.5 million. Direct station 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. and selling, general and administrative expenses increased 11.8% to $28.8 million for the 2004 first quarter from $25.7 million reported in the first quarter of 2003. Total operating expenses in the 2004 first quarter include $0.7 million of non-recurring merger and Time Brokerage Agreement (TBA TBA See: To be announced ) costs incurred during the period. First quarter 2004 broadcast cash flow (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 plus other non-recurring items minus broadcast rights payments) rose 31.2% to $17.7 million from $13.5 million in the first quarter of 2003. In the first quarter of 2004, 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 (calculated as earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
Broadcast cash flow and adjusted EBITDA are non-GAAP financial measures. Nexstar believes that 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 and by industry analysts to determine the market value of stations and their operating performance. For a reconciliation of 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 Disclosures tables at the end of this release. 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 Results Nexstar Broadcasting Group, Inc. also reported "pro forma" results to reflect the acquisition of certain television stations as if they had occurred on January 1, 2003. These include Nexstar's acquisitions of KARK in Little Rock, AR and WDHN in Dothan, AL, which were completed in August 2003, as well as KPOM/KFAA in Fort Smith-Fayetteville-Springdale-Rogers, AR, which Nexstar began operating under a TBA in October 2003. Pro forma results also include the acquisition by the Company's broadcasting associate, 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., 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 exclude contributions from WUTR in Utica, NY, which was not operated under a TBA or Local Marketing Agreement (LMA LMA left mentoanterior (position of fetus). ) prior to Mission's completion of the acquisition in April 2004. These results are non-GAAP financial measures and management believes they are useful to investors as 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 also believes they provide an additional basis from which investors can establish forecasts and valuations for the Company's business. Pro forma results for the 2003 first quarter referenced below are defined in a document entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: , "2003 Quarterly as Adjusted for Acquisitions," which is available on the "Financial Reports" section of the Company's web site, www.nexstar.tv. On a pro forma basis, net revenue in the 2004 first quarter was $54.2 million, an increase of 8.4% from $50.0 million in the 2003 first quarter. Broadcast cash flow rose 34% to $17.7 million from $13.2 million in the first quarter of 2003, while adjusted EBITDA rose 42% to $15.7 million from $11.0 million. 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 "We delivered strong results during the first quarter of 2004," said Perry A. Sook, President and Chief Executive Officer of Nexstar Broadcasting Group, Inc. "On a pro forma basis, our total advertising revenue, which excludes network compensation and other miscellaneous revenue, increased 11.2% over the first quarter of 2003, which is consistent with our previous guidance. Of that amount, our local/regional ad revenue increased 5% and national revenue, excluding political advertising, grew 4%. At the same time, total operating expenses and program payments decreased compared to the prior year's first quarter. These reductions, when combined with the corporate overhead savings resulting from the Quorum A majority of an entire body; e.g., a quorum of a legislative assembly. A quorum is the minimum number of people who must be present to pass a law, make a judgment, or conduct business. merger, produced 42% growth in adjusted EBITDA." "Importantly, eight of our top ten 'core' advertising categories were up versus the prior year, reflecting improved economic conditions in our markets and increased 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 confidence. The automotive, financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. , retail, furniture, medical, legal, paid programming and telecommunication telecommunication Communication between parties at a distance from one another. Modern telecommunication systems—capable of transmitting telephone, fax, data, radio, or television signals—can transmit large volumes of information over long distances. categories increased while the fast food and entertainment sectors experienced declines. Additionally, our stations also generated approximately $2.3 million in 'new-to-television' revenue in the quarter, which we believe is a direct result of Nexstar's ongoing emphasis on new business development." Additional Expense Detail Depreciation and amortization was $12.0 million for the quarter, compared to $10.8 million in the first quarter of 2003. The increase in depreciation and amortization expense for the first quarter of 2004 is primarily attributable to the 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. intangible assets acquired from KARK, WDHN, KRBC and KSAN. Corporate, general and administrative expenses were $2.0 million in the first quarter of 2004, compared to $2.3 million in the first quarter of 2003. The decline is primarily associated with the elimination of certain costs associated with Quorum's separate corporate overhead in 2003. Interest expense for the first quarter of 2004 was $12.8 million, compared to $12.1 million in 2003. The loss on extinguishment of debt in the first quarter of 2004 relates to the extinguishment of the Company's 16% Senior Discount Notes. The loss on extinguishment of debt includes $5.9 million related to call premiums and accelerated amortization on the notes and $0.9 million relates to the write off 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. The first quarter 2003 charge of $5.8 million pertains to the write off of certain debt financing costs capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. related to a refinancing Refinancing An extension and/or increase in amount of existing debt. of senior credit facilities credit facilities npl → facilidades fpl de crédito credit facilities npl → facilités fpl de paiement credit facilities . Liquidity At March 31, 2004, the Company's total long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. was approximately $604.8 million and cash balances were $17.1 million. For the 2004 first quarter, the Company's capital expenditures were $2.4 million, compared to $3.4 million in the first quarter of 2003. A subsidiary of the company is the borrower under a senior secured credit facility. The subsidiary's consolidated total debt, less cash on hand, of $503.2 million at March 31, 2004 resulted in a leverage ratio as defined per the credit agreement at the end of the quarter of 6.7x, compared to a permitted leverage covenant of 7.0x. Nexstar had 28.4 million diluted common shares outstanding on March 31, 2004 and 28.4 million weighted average shares outstanding for the first quarter of 2004. Local Broadcasting Excellence Nexstar's KARK-TV, the 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. affiliate serving the Little Rock/Pine Bluff, AR markets, was honored hon·or n. 1. High respect, as that shown for special merit; esteem: the honor shown to a Nobel laureate. 2. a. Good name; reputation. b. with six regional Edward R. Murrow Awards The Edward R. Murrow Award can mean:
adj. Of, relating to, or characteristic of journalism or journalists. jour  nal·is excellence by the Radio and Television
News Directors Association. Among the awards KARK received were those
for "overall news excellence" and "best newscast newscastRadio or television broadcast of news events. News gathering and broadcasting by the radio networks began in the mid-1930s and increased significantly during World War II. The television newscast began in 1948 with 15-minute programs that resembled movie newsreels. ." In addition, for the third consecutive year KARK was awarded "best newscast" by the Arkansas Associated Press Associated Press: see news agency. Associated Press (AP) Cooperative news agency, the oldest and largest in the U.S. and long the largest in the world. . Nexstar-produced newscasts on WROC-TV, Rochester, NY; WJET, Erie, PA; WCIA-TV, Champaign Champaign (shămpān`), city (1990 pop. 63,502), Champaign co., E central Ill.; inc. 1860. It adjoins the city of Urbana and is a commercial and industrial center in a fertile farm area. The Univ. , IL; KTAL-TV, Shreveport, LA and KLBK KLBK Konsortium Lebuhraya Butterworth-Kulim Sdn Bhd and KAMC-TV, Lubbock, TX, were all recipients of awards for journalistic achievement from either the respective state association of broadcasters or the Associated Press. Second-Quarter Outlook The Company's revenue outlook for the second quarter ending June 30, 2004 is subject to, and could be affected by: economic developments, regulatory 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 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. On a reported basis, the Company expects 2004 second quarter total net revenue to increase approximately 11 - 12% from the $55.2 million reported in the second quarter of 2003 and a net loss per share of between $0.08 and $0.10. On a pro forma basis, the Company anticipates total net revenue to increase approximately 8 - 9% from the $56.6 million reported in the second quarter of 2003, primarily driven by a 10% increase in total advertising revenue (which includes local, national and political revenue). Station direct operating expenses, selling, general and administrative expenses, and program payments on a pro forma basis are expected to decrease approximately 3.0 - 3.5% over 2003 second quarter levels. Pro forma results for the 2003 second quarter are defined in a document entitled, "2003 Quarterly as Adjusted for Acquisitions," which is available on the "Financial Reports" section of the Company's web site, www.nexstar.tv. In April 2004, Mission Broadcasting, Inc., the Company's broadcasting associate, completed its previously announced acquisition of WUTR-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 serving the Utica, NY market, and WBAK-TV, the Fox affiliate serving Terre Haute, IN. First-Quarter Conference Call Nexstar will host a conference call at 10:30 a.m. (EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT ) today. Senior management will discuss the financial results and host a question and answer session. A live audio web cast of the call will be accessible to the public on the Company's web site, www.nexstar.tv. A recording of the web cast will subsequently be archived on the site. The dial in number for the audio conference call is (800) 915-4836; no access code is needed. A replay of the call will be available through May 16, 2004 by dialing (800) 428-6051, and entering access code 351405. About Nexstar Broadcasting Group, Inc. Nexstar Broadcasting Group, Inc. owns, operates, programs or provides sales and other services to 44 television stations in 27 markets in the states of Illinois, Indiana, Maryland, Missouri, Montana, Texas, Pennsylvania, Louisiana, Arkansas, Alabama 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 . Nexstar's television station group includes affiliates of NBC, 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 the Company'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, WHAG NBC O&O
MD(2)
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- WCIA CBS O&O
Decatur, IL WCFN UPN O&O
99 Evansville, IN WTVW Fox O&O
105 Ft. Wayne, IN WFFT Fox O&O
108 Ft. Smith - Fayetteville - KPOM/ NBC Acq.
Springdale - Rogers, AR KFAA 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
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, KFDX NBC O&O
OK 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
201 St. Joseph, MO KQTV ABC O&O
(1) O&O refers to stations that we own and operate. LSA LSA - Link State Advertisement , 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 shared services, n.pl the administrative, clinical, or other service functions that are common to two or more hospitals or their health care facilities and used jointly or cooperatively by them. agreements, joint sales agreements, and outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. agreements. (2) Although WHAG is located within the Washington, DC DMA (1) (Digital Media Adapter) See digital media hub. (2) (Document Management Alliance) A specification that provides a common interface for accessing and searching document databases. , its signal does not reach the entire Washington, DC metropolitan area. WHAG serves the Hagerstown, MD sub-market within the DMA. This news release includes 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. . 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 revenues, 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 in programming costs, the effects of governmental regulation of broadcasting, industry consolidation, technological developments and major world news events. 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. Nexstar Broadcasting Group, Inc. Consolidated Statements of Operations (dollars in thousands, except per share amounts)
Three Months Ended
March 31,
(unaudited)
-----------------------
2003 2004
-----------------------
Revenue (excluding trade and barter) $48,301 $56,427
Less: commissions (6,207) (7,459)
-----------------------
Net broadcast revenue (excluding trade and
barter) 42,094 48,968
Trade and barter revenue 5,160 5,268
-----------------------
Total net revenue 47,254 54,236
-----------------------
Operating Expenses:
Direct operating expenses (exclusive of
depreciation and
amortization shown separately below) 12,840 14,307
Selling, general and administrative expenses
(exclusive of depreciation and amortization
shown separately below) 12,881 14,458
Merger related expenses - 456
Time brokerage agreement expenses 40 225
Trade and barter expense 5,200 5,049
Corporate expenses 2,255 2,036
Amortization of broadcast rights, excluding
barter 2,706 3,003
Amortization of intangible assets 5,643 6,920
Depreciation 5,113 5,123
-----------------------
Total operating expenses 46,678 51,577
-----------------------
Income from operations 576 2,659
Interest expense, including amortization of
debt financing costs (12,069) (12,843)
Loss on extinguishment of debt (5,814) (6,824)
Interest income 69 16
Other income (expense), net 1,010 759
-----------------------
Loss before income taxes (16,228) (16,233)
Income tax expense (849) (968)
-----------------------
Loss before minority interest in consolidated
entity (17,077) (17,201)
Minority interest in consolidated entity - 487
-----------------------
Net loss $(17,077) $(16,714)
Accretion of preferred interests (9,461) -
-----------------------
Net loss attributable to common shareholders $(26,538) $(16,714)
=======================
Basic and diluted net loss per share:
Net loss attributable to common shareholders $(1.97) $(0.59)
Weighted average number of shares outstanding:
Basic and diluted 13,479 28,363
Nexstar Broadcasting Group, Inc. Supplemental Financial Data (dollars in thousands, except share amounts)
Three Months Ended
March 31,
(unaudited)
---------------------
2003 2004
---------------------
Cash $107,495 $17,119
Cash interest $9,420 $9,787
Program payments $2,849 $2,782
Capital expenditures $3,353 $2,418
Cash paid for income taxes, net of refunds $227 $50
Long-term debt $589,689 $604,825
Common shares outstanding, net of treasury shares 13,479 28,363
Nexstar Broadcasting Group, Inc. Reconciliation Between Actual Consolidated Statements Of Operations And Broadcast Cash Flow/Adjusted EBITDA (Non-GAAP Measures) (dollars in thousands) (unaudited)
Three Months Ended
March 31,
---------------------
2003 2004
---------------------
Income from operations $576 $2,659
Add:
Depreciation 5,113 5,123
Amortization of intangible assets 5,643 6,920
Amortization of broadcast rights, excluding
barter 2,706 3,003
Merger related expenses - 456
Time brokerage agreement expenses 40 225
Corporate expenses 2,255 2,036
Program buyouts - 55
Less:
Payments for broadcast rights 2,849 2,782
---------------------
Broadcast cash flow $13,484 $17,695
Less:
Corporate expenses 2,255 2,036
---------------------
Adjusted EBITDA $11,229 $15,659
=====================
Broadcast cash flow and adjusted EBITDA are non-GAAP financial measures. Broadcast cash flow is calculated as income from operations plus corporate expenses plus depreciation and amortization of intangible assets and broadcast rights plus other non-recurring items minus payments for broadcast rights. Adjusted EBITDA is calculated as broadcast cash flow less corporate expenses. Nexstar believes that the presentation of these non-GAAP measures are helpful to investors because they are used by lenders to measure the Company's ability to service debt and by industry analysts to determine the market value of stations and their operating performance. |
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