Nexstar Broadcasting Group Reports Record First Quarter Operating Results; Revenue of $59.8 Million Drives Significant Gains in Income from Operations, EBITDA and Free Cash Flow.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 record first quarter financial results for the period ended March 31, 2006. Summary 2006 First Quarter Highlights: Net revenue for the quarter ended March 31, 2006 grew 12.2% to $59.8 million from $53.3 million in the first quarter of 2005. Income from operations for the three months ended March 31, 2006 totaled $6.1 million compared with $1.6 million in the quarter ended March 31, 2005. The Company recorded a basic and 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. net loss per share of $0.26 for the three months ended March 31, 2006 compared with a basic and diluted net loss per share of $0.45 in the first quarter of 2005. During the first quarter 2006 the Company incurred $0.4 million of non-cash employee stock option expense pursuant to its adoption on January January: see month. 1, 2006 of SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 123R. The Company incurred no employee stock option expense in the period ended March 31, 2005. Broadcast cash flow(1) rose 24.5% to $19.8 million in the first quarter of 2006 from $15.9 million in the first quarter of 2005. 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 (1) totaled $16.6 million for the first quarter of 2006, a 28.8% increase over the first quarter of 2005, while free cash flow(1) rose to $4.9 million in first quarter of 2006, a $4.7 million year-over-year increase. (1) "Broadcast cash flow", "EBITDA" and "free cash flow" are non-GAAP financial measures. For a definition of these measures and reconciliation to GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (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. Nexstar's guidance, issued on March 2, 2006, was for net revenue in the 2006 first quarter of approximately $56.0 to $57.0 million. Excluding political advertising, gross local and national advertising revenue for the 2006 first quarter increased 11.1%. First quarter 2006 political advertising revenue was approximately $1.8 million, compared to approximately $0.3 million in the first quarter of 2005. Nexstar also recorded approximately $3.0 million of total retransmission consent Retransmission consent is an option granted to US television stations as part of the law that granted such stations the option to elect must-carry rights. Under retransmission consent, a full-power US television station may elect to negotiate with a cable system operator for revenues in the quarter compared to the $0.5 million recorded in the first quarter of 2005. 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, "I'm I'm Contraction of I am. Our Living Language Speakers of some scattered varieties of American English sometimes use I'm instead of I've or I have in present perfect constructions, as in delighted that Nexstar exceeded our first quarter guidance. We posted record first quarter net revenue, income from operations, broadcast cash flow, EBITDA and free cash flow. Retransmission consent agreements contributed cash revenues of $2 million as well as approximately $1 million of ad spends. This revenue source will be a significant contributor to Nexstar's results on a going forward basis." "Strong organic cash flows enabled Nexstar to further address debt reduction, an important corporate priority. During the first quarter we made $4.9 million of principal payments against senior credit facilities credit facilities npl → facilidades fpl de crédito credit facilities npl → facilités fpl de paiement credit facilities ." "Nexstar's focus on local sales and local news leadership in our mid-sized markets support our expectations for continued leading revenue share in most of the markets in which we operate. Early in the second quarter, Nexstar announced its intention to sell KFTA-TV KFTA-TV is the Fox affiliate for the Fort Smith/Fayetteville, Arkansas television market. The station debuted on November 12, 1978 as KLMN-TV, the area's third television station. It was a CBS affiliate. in Ft. Smith, Arkansas Arkansas, river, United States Arkansas (ärkăn`zəs, är`kənsô'), river, c.1,450 mi (2,330 km) long, rising in the Rocky Mts., central Colo. to 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]. . Upon securing FCC (1) (Federal Communications Commission, Washington, DC, www.fcc.gov) The U.S. government agency that regulates interstate and international communications including wire, cable, radio, TV and satellite. The FCC was created under the U.S. approval and completion of the sale, the station will become the FOX affiliate serving the market. Nexstar's KNWA-TV KNWA-TV is the NBC television affiliate for the Fort Smith/Fayetteville, Arkansas television market. KNWA is licensed to Rogers; it broadcasts on analog channel 51 and digital channel 50. It operates out of Fayetteville under the ownership of Nexstar Broadcasting. , which operates in the same 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. , will remain 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 in the market and has agreed to enter into a joint sales and 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. agreement with Mission whereby KNWA KNWA can refer to:
KFTA Korea Free Trade Agreement KFTA Keeping Families Together Act KFTA Korea Federation of Teachers' Associations KFTA Kansas Future Teacher Academy (Emporia State University; Emporia, KS) . We believe this arrangement will prove to be attractive to viewers VIEWERS. Persons appointed by the courts to see and examine certain matters, and make a report of the facts together with their opinion to the court. In practice they are usually appointed to lay out roads and the like. Vide Experts. who will now be able to access a full-power FOX station and the market's first prime time local newscast newscast Radio 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. , while providing another choice for local advertisers to reach customers in the market." Outstanding Debt At March 31, 2006, the Company's total debt was approximately $644.5 million and cash balances were $11.8 million. As defined per the credit agreement, consolidated total debt was $528.5 million at March 31, 2006, net of cash on hand, which resulted in a leverage ratio of 7.8x, compared to a permitted leverage covenant of 8.0x under the company's credit facilities. Nexstar Broadcasting, Inc., a subsidiary of the Company, and Mission, are borrowers under senior secured credit facilities. Covenants under the credit facilities exclude Nexstar Finance Holdings, Inc.'s 11.375% notes, which have accreted to $104.2 million as of March 31, 2006. Interest expense in the first quarter of 2006 was $12.2 million, compared to $13.1 million for the same period in 2005. The decrease is primarily attributed to the April 2005 redemption of all $160.0 million in aggregate principal amount of our outstanding 12% Senior Subordinated Notes due April 1, 2008. The decrease was partially offset by the April 2005 issuance of the $75.0 million in the aggregate principal amount of 7% Senior Subordinated Notes due 2014, higher interest rates and a greater amount of bank debt outstanding under our and Mission Broadcasting Inc.'s senior credit facilities. As of March 31, 2006 and 2005, total bank debt under Nexstar's and Mission's senior credit facilities was $342.8 million and $254.7 million, respectively. Cash interest for the first quarter of 2006 was $9.1 million, compared to $10.0 million for the same period in 2005. 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 7% senior subordinated notes. Summary 2006 Second Quarter Outlook Nexstar today issued the following outlook for the three-month period ending June June: see month. 30, 2006:
2006 Second Quarter
Estimates Three Months Ended
(in millions) June 30,
----------------------------------------------------------------------
2005 Approximate
2006 Estimate Actual Change
----------------------------------------------------------------------
Net Revenue $62.5 - $64.0 $58.7 6.5% - 9.0%
----------------------------------------------------------------------
Station Operating Expenses $38.5 - $39.5 $37.5 2.7% - 5.3%
----------------------------------------------------------------------
Corporate Overhead $3.2 - $3.5 $2.5 28.0% - 40.0%
----------------------------------------------------------------------
Net revenue is comprised of gross local, national and political advertising revenue, revenue related to retransmission Retransmission might refer to:
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. revenue, and other sources of revenue, less agency commissions. The Company's expectation for net revenue growth of 6.5% to 9% for the three months ending June 30, 2006 assumes political revenue of approximately $2 million. In the quarter ended June 30, 2005 the Company recorded gross political advertising revenue of $0.8 million. 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. include the direct expenses, trade and barter expense and program amortization costs associated with the operation of the Company's television stations. The anticipated increase in corporate overhead in the quarter ending June 30, 2006 compared with the same period in 2005 includes approximately $0.4 million of non-cash employee stock option expense. The Company's financial outlook for the second quarter ending June 30, 2006 assumes there will be no new acquisitions or local service agreements entered into during the period. The outlook 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 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. Certain prior year financial statement amounts have been reclassified to conform to Verb 1. conform to - satisfy a condition or restriction; "Does this paper meet the requirements for the degree?" fit, meet coordinate - be co-ordinated; "These activities coordinate well" the current year presentation. First 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 877-502-9274, (913-981-5584 for international callers); no access code is needed. A replay of the call will be available through May 10, 2006 by dialing 888-203-1112, (719-457-0820 for international callers), and entering access code 6464227. Definitions and Disclosures Regarding non-GAAP Financial Information Broadcast cash flow is calculated as income from operations plus corporate expenses, depreciation, 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) and loss on asset disposal, net minus broadcast rights payments. EBITDA is calculated as broadcast cash flow less corporate expenses. Free cash flow is calculated as income from operations plus depreciation, amortization of intangible assets and broadcast rights (excluding barter), loss on asset disposal, net, and non-cash stock option expense, less payments for broadcast rights, cash interest expense, capital expenditures and net cash income taxes. Broadcast cash flow, EBITDA and free cash flow 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 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 owns, operates, programs or provides 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 Missouri, state, United States Missouri (mĭz  r`ē, –ə), one of the midwestern states of the United States. , 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, Alabama Alabama, indigenous people of North AmericaAlabama (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 . 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 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
(in thousands, except per share amounts)
Three Months Ended
March 31,
----------------------------------------------------------------------
2006 2005(2)
----------------------------------------------------------- ---------
(Unaudited)
----------------------------------------------------------------------
Net revenue (1) $59,826 $53,312
----------------------------------------------------------- ---------
Operating expenses:
----------------------------------------------------------- ---------
Station direct operating expenses, net of
trade (exclusive of depreciation and
amortization shown separately below) 15,790 14,671
----------------------------------------------------------- ---------
Selling, general, and administrative
expenses (exclusive of depreciation and
amortization shown separately below) 17,161 15,073
----------------------------------------------------------- ---------
Loss on asset disposal, net 64 109
----------------------------------------------------------- ---------
Trade and barter expense 4,730 4,999
----------------------------------------------------------- ---------
Corporate expenses 3,217(3) 3,022
----------------------------------------------------------- ---------
Amortization of broadcast rights, excluding
barter 2,096 2,685
----------------------------------------------------------- ---------
Amortization of intangible assets 6,053 6,762
----------------------------------------------------------- ---------
Depreciation 4,626 4,423
----------------------------------------------------------- ---------
Total operating expenses 53,737 51,744
----------------------------------------------------------- ---------
Income from operations 6,089 1,568
----------------------------------------------------------- ---------
Interest expense, including amortization of debt
financing costs (12,242) (13,075)
----------------------------------------------------------- ---------
Interest income 117 39
----------------------------------------------------------- ---------
Other income (expenses), net - (48)
----------------------------------------------------------- ---------
Loss before income taxes (6,036) (11,516)
----------------------------------------------------------- ---------
Income tax expense (1,251) (1,292)
----------------------------------------------------------- ---------
Net loss $(7,287) $(12,808)
---------------------------------------------------======== =========
Basic and diluted net loss per share $(0.26) $(0.45)
----------------------------------------------------------- ---------
Basic and diluted weighted average number of shares
outstanding 28,363 28,363
----------------------------------------------------------- ---------
(1) Includes approximately $3.0 million and $0.5 million of total
cash retransmission consent compensation and retransmission
advertising for the three months ended March 31, 2006 and 2005,
respectively.
(2) Certain prior year financial statement amounts have been
reclassified to conform to the current year presentation.
(3) Includes approximately $0.4 million of non-cash employee stock
option expense.
Nexstar Broadcasting Group, Inc.
Reconciliation Between Actual Consolidated Statements of
Operations and Broadcast Cash Flow and EBITDA (Non-GAAP Measures)
(in thousands)
Three Months Ended
March 31,
----------------------------------------------------------------------
2006 2005
------------------------------------------------------------- --------
(Unaudited)
----------------------------------------------------------------------
------------------------------------------------------------- --------
Income from operations $6,089 $1,568
------------------------------------------------------------- --------
Add:
------------------------------------------------------------- --------
Depreciation 4,626 4,423
------------------------------------------------------------- --------
Amortization of intangible assets 6,053 6,762
------------------------------------------------------------- --------
Amortization of broadcast rights, excluding
barter 2,096 2,685
------------------------------------------------------------- --------
Loss on asset disposal, net 64 109
------------------------------------------------------------- --------
Corporate expenses 3,217 3,022
------------------------------------------------------------- --------
------------------------------------------------------------- --------
Less:
------------------------------------------------------------- --------
Payments for broadcast rights 2,302 2,637
------------------------------------------------------------- --------
------------------------------------------------------------- --------
Broadcast cash flow $19,843 $15,932
------------------------------------------------------------- --------
------------------------------------------------------------- --------
Less:
------------------------------------------------------------- --------
Corporate expenses 3,217 3,022
------------------------------------------------------------- --------
EBITDA $16,626 $12,910
----------------------------------------------------========- ========
Nexstar Broadcasting Group, Inc.
Reconciliation Between Actual Consolidated Statements of
Operations and Free Cash Flow (Non-GAAP Measure)
(in thousands)
Three Months Ended
March 31,
----------------------------------------------------------------------
2006 2005
------------------------------------------------------------- --------
(Unaudited)
----------------------------------------------------------------------
-------------------------------------------------------------- -------
Income from operations $6,089 $1,568
-------------------------------------------------------------- -------
Add:
-------------------------------------------------------------- -------
Depreciation 4,626 4,423
-------------------------------------------------------------- -------
Amortization of intangible assets 6,053 6,762
-------------------------------------------------------------- -------
Amortization of broadcast rights, excluding barter 2,096 2,685
-------------------------------------------------------------- -------
Loss on asset disposal, net 64 109
-------------------------------------------------------------- -------
Non-cash stock option expense 414 -
-------------------------------------------------------------- -------
-------------------------------------------------------------- -------
Less:
-------------------------------------------------------------- -------
Payments for broadcast rights 2,302 2,637
-------------------------------------------------------------- -------
Cash interest expense 9,140 9,993
-------------------------------------------------------------- -------
Capital expenditures 2,982 2,874
-------------------------------------------------------------- -------
Cash income taxes, net of refunds 66 (109)
-------------------------------------------------------------- -------
-------------------------------------------------------------- -------
Free Cash Flow $4,852 $152
------------------------------------------------------=======- =======
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