Exhibit 99.1
| | |
| News Announcement | | For Immediate Release |
Nexstar Broadcasting Group Reports 2004 Fourth Quarter
And Year-end Results
Irving, TX – March 4, 2005 - Nexstar Broadcasting Group, Inc. (NASDAQ: NXST) today reported financial results for the fourth quarter and year ended December 31, 2004 ahead of previously issued guidance.
Summary Reported 2004 Fourth Quarter and Year-end Highlights:
Total net revenue for the 2004 fourth quarter was $70.5 million, an increase of 19.5% over net revenue of $59.0 million in the 2003 fourth quarter. Nexstar’s previous guidance, issued on November 4, 2004, was for 2004 total net revenue to be approximately $66.0 to $68.0 million, or an increase of approximately 12.0% - 15.0%. For the full year, Nexstar’s total net revenue increased 14.7% to $245.7 million from $214.3 million in 2003.
The following table summarizes reported highlights for the three and twelve-month periods ended December 31, 2004:
Summary 2004 Highlights:
(dollars and shares in millions, except per share data)
| | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended
December 31,
| | | Change
| | | Twelve Months Ended
December 31,
| | | Change
| |
| | 2004
| | 2003
| | | | 2004
| | | 2003
| | |
Gross local and national advertising revenue, excluding political | | $ | 57.7 | | $ | 54.5 | | | 5.9 | % | | $ | 219.7 | | | $ | 203.8 | | | 7.8 | % |
Gross political advertising revenue | | $ | 12.9 | | $ | 2.2 | | | 486.4 | % | | $ | 26.7 | | | $ | 4.4 | | | 506.8 | % |
Total gross advertising revenue | | $ | 70.6 | | $ | 56.7 | | | 24.5 | % | | $ | 246.4 | | | $ | 208.2 | | | 18.3 | % |
Total net revenue(1) | | $ | 70.5 | | $ | 59.0 | | | 19.5 | % | | $ | 245.7 | | | $ | 214.3 | | | 14.7 | % |
Station direct operating expenses, SG&A expenses and cash program payments | | $ | 34.3 | | $ | 33.5 | | | 2.4 | % | | $ | 129.7 | | | $ | 125.2 | | | 3.6 | % |
Broadcast cash flow(2) | | $ | 29.6 | | $ | 20.3 | | | 45.8 | % | | $ | 95.2 | | | $ | 70.8 | | | 34.5 | % |
Corporate expenses | | $ | 4.1 | | $ | 4.4 | | | (6.8 | )% | | $ | 10.9 | | | $ | 12.6 | | | (13.5 | )% |
Adjusted EBITDA(2) | | $ | 25.5 | | $ | 15.8 | | | 61.4 | % | | $ | 84.2 | | | $ | 58.2 | | | 44.7 | % |
Net income (loss) attributable to common shareholders(3) | | $ | 0.7 | | $ | (24.4 | ) | | 102.9 | % | | $ | (20.5 | ) | | $ | (87.1 | ) | | 76.5 | % |
Diluted net income (loss) per share attributable to common shareholders | | $ | 0.03 | | $ | (1.29 | ) | | 102.3 | % | | $ | (0.72 | ) | | $ | (5.59 | ) | | 87.1 | % |
Weighted basic and diluted shares outstanding | | | 28.4 | | | 19.0 | | | | | | | 28.4 | | | | 15.6 | | | | |
Free cash flow(2) | | $ | 12.1 | | $ | (25.1 | ) | | 148.2 | % | | $ | 31.2 | | | $ | (16.1 | ) | | 293.8 | % |
| (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” and “free cash flow” 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 2003 fourth quarter net loss attributable to common shareholders includes a $5.0 million loss on the extinguishment of debt. |
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| Nexstar Broadcasting Group Q4 2004 Results, 3/4/05 | | page 2 |
Summary Pro Forma Highlights
Pro forma results reflect the completed acquisitions of certain television stations as if they had occurred on January 1, 2003. The following table summarizes pro forma highlights for the three and twelve-month periods ended December 31, 2004:
Summary 2004 Pro Forma Highlights:(1)
(dollars in millions)
| | | | | | | | | | | | | | | | | | |
| | | Three Months Ended
December 31,
| | Change
| | | Twelve Months Ended
December 31,
| | Change
| |
| | 2004
| | 2003
| | | 2004
| | 2003
| |
Total net revenue(1) | | $ | 71.0 | | $ | 62.1 | | 14.3 | % | | $ | 252.3 | | $ | 230.8 | | 9.3 | % |
Station direct operating expenses, SG&A expenses and cash program payments | | $ | 34.7 | | $ | 36.7 | | (5.4 | )% | | $ | 135.5 | | $ | 141.1 | | (4.0 | )% |
| (1) | “Pro forma” is a non-GAAP financial measure. For a more complete definition of “pro forma” and reconciliation of these results 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. |
CEO Comment
Perry A. Sook, Chairman, President and Chief Executive Officer of Nexstar Broadcasting Group, Inc., commented, “Fourth quarter operating results benefited from election year political advertising revenue and several acquisitions completed in 2004. Excluding political advertising revenue, our core local and national revenues continued to grow, highlighting both our sales and local content leadership as well as strengthening economies in the markets we serve.
“In 2004, we successfully integrated over twenty television stations into Nexstar’s operating model, more than doubling the size of our portfolio. Completing the successful integration of so many new stations in such a short period of time was a significant accomplishment for our team in 2004. Our focus on achieving cost reductions contributed to an 4.0% decline in pro forma station direct operating expenses, selling, general and administrative expenses and cash program payments during the year. When coupled with our revenue gains, these efficiencies helped Nexstar achieve record levels of broadcast cash flow, EBITDA and free cash flow in 2004.
“2005 will be a period of focused execution for Nexstar Broadcasting Group. We will concentrate our time and resources on operating our existing station group. We believe our integration success in 2004 places us in a good position to capitalize on the improving economy and continue growing our core business, exclusive of political revenue. We are also well positioned to build on our cost containment efforts from 2004 and capture any remaining expense savings from our recently acquired stations.
“At the corporate level, we are pursuing strategies to reduce cash obligations related to our debt structure which, if successful, will result in free cash flow gains. We plan to use our free cash flow to pay down debt and strengthen our balance sheet in 2005. We are also pursuing opportunities to divest certain non-strategic assets, and if progress is made on this front, we anticipate using the proceeds to further reduce debt.”
Additional Expense Detail on Reported 2004 Fourth Quarter Results
Depreciation and amortization was $10.8 million in the fourth quarter of 2004, compared to $12.3 million in the fourth quarter of 2003. The decrease in depreciation and amortization expense for the fourth quarter of 2004 is primarily attributable to depreciable assets at certain stations becoming fully depreciated in the first quarter of 2004 and amortizable assets at certain stations becoming fully amortized in the third quarter of 2004.
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| Nexstar Broadcasting Group Q4 2004 Results, 3/4/05 | | page 3 |
Interest expense in the fourth quarter of 2004 was $13.3 million, compared to $25.3 million for the same period in 2003. Included in the 2003 amount are non-recurring items of $6.7 million related to call premiums and accelerated amortization on Quorum’s senior discount notes and $3.9 million related to the adoption of Statement of Financial Accounting Standards No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity” (“SFAS No. 150”) on July 1, 2003. SFAS No.150 required the Company to account for the change in fair value of certain of its mandatory redeemable units from implementation date as an adjustment to interest expense. The decrease is partially attributed to lower interest rates on our senior credit facilities and the redemption of Nexstar’s 16% senior discount notes in January 2004.
Capital expenditures in the fourth quarter of 2004 were $3.2 million, compared to $1.8 million in the fourth quarter of 2003. Cash interest for the fourth quarter of 2004 was $10.1 million, compared to $21.9 million in the fourth quarter of 2003. Cash interest excludes non-cash interest related to amortization of debt financing costs and accretion of the discount on Nexstar’s 11.375% senior discount notes and 12% senior subordinated notes.
Liquidity and Cash Flow
Free cash flow for the 2004 fourth quarter rose to $12.1 million from a negative $25.1 million in the fourth quarter of 2003.
At December 31, 2004, the Company’s total debt was approximately $629.9 million and cash balances were $18.5 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 total debt under the credit facilities of $521.7 million at December 31, 2004, net of cash on hand, resulted in a leverage ratio as defined per the credit agreement of 5.9x, compared to a permitted leverage covenant of 6.5x. Covenants under the credit facilities exclude Nexstar Finance Holdings, Inc.’s 11.375% notes, which have accreted to $90.7 million, as of December 31, 2004.
12% Senior Subordinated Notes Redemption
On March 2, 2005, Nexstar Broadcasting Group called for redemption of all $160 million in aggregate principal amount of Nexstar Broadcasting, Inc.’s outstanding 12% Senior Subordinated Notes due April 1, 2008. Nexstar Broadcasting is a subsidiary of Nexstar Broadcasting Group. The redemption price is $1,060 per $1,000 principal amount, plus accrued and unpaid interest to the scheduled redemption date, which is April 1, 2005. The Company intends to fund the redemption of the Notes from committed financing sources.
Completed Acquisitions
On November 30, 2004, Nexstar completed its acquisition of KLST-TV, the CBS affiliate in San Angelo, Texas. Nexstar had been operating KLST under a Time Brokerage Agreement (TBA) effective June 1, 2004. Operations under that TBA terminated on November 30, 2004.
On January 4, 2005, Mission Broadcasting closed its acquisition of WTVO-TV, the ABC affiliate in Rockford, Illinois. 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, on November 1, 2004.
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| Nexstar Broadcasting Group Q4 2004 Results, 3/4/05 | | page 4 |
On January 7, 2005, Nexstar closed on its acquisition of KFTA/KNWA, the NBC affiliate in Fort Smith-Fayetteville-Springdale-Rogers, Arkansas. Nexstar had been operating KFTA/KNWA under a TBA effective October 16, 2003. Operations under that TBA terminated on January 7, 2005.
Summary 2005 First-Quarter Outlook
Nexstar issued the following outlook for the three-month period ending March 31, 2005:
Reported 2005 First Quarter Estimates
(in millions)
| | | | | | | | | |
| | | Three Months Ended March 31,
| | Approximate Change
| |
| | 2005 – Est.
| | 2004 – Actual
| |
Gross local and national advertising revenue, excluding political | | $ | 50.0 – 51.0 | | $ | 49.9 | | 0.2 – 2.2 | % |
Gross political advertising revenue | | $ | 0.1 – 0.2 | | $ | 3.4 | | (97.1) – (94.1 | )% |
Total gross advertising revenue | | $ | 50.1 – 51.2 | | $ | 53.3 | | (6.0) – (3.9 | )% |
Total net revenue | | $ | 51.5 – 52.5 | | $ | 54.2 | | (5.0) – (3.1 | )% |
Station direct operating expenses, SG&A expenses and cash program payments | | $ | 32.3 – 32.8 | | $ | 31.5 | | 2.5 – 4.1 | % |
The Company’s financial outlook for the first quarter ending March 31, 2005 assumes there will be no new acquisitions or local service agreements entered into during the period. The outlook also assumes no debt restructuring costs will be reported 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. Reference is made to the “Safe Harbor” 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.
Fourth-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 800-310-1961; no access code is needed. A replay of the call will be available through March 11, 2005 by dialing 888-203-1112, (719-457-0820 for International callers), and entering access code 4771667.
Definitions and Disclosures Regarding non-GAAP Financial Information
Broadcast cash flow is calculated as operating income plus corporate expenses plus depreciation and amortization of intangible assets and broadcast rights (excluding barter) 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 acquisitions of certain television stations as if they had occurred on January 1, 2003. Pro Forma results for the three months ended December 31, 2004 and 2003 include Nexstar’s acquisition of KFTA/KNWA in Fort Smith-Fayetteville-Springdale-Rogers, AR, which Nexstar began operating under a TBA in October 2003, and KLST in San Angelo, TX, which
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| Nexstar Broadcasting Group Q4 2004 Results, 3/4/05 | | page 5 |
Nexstar began operating under a TBA in June 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, as well as Mission’s acquisition of WBAK in Terre Haute, IN, which Mission began operating under a TBA in May 2003, and WTVO in Rockford, IL, which Nexstar began providing services to in November 2004. Pro forma results for the year ended December 31, 2004 and 2003 include the stations mentioned above, as well as KARK in Little Rock, AR and WDHN in Dothan, AL, both of which Nexstar began operating under a TBA in February 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 and fund ongoing operations and working capital needs; and, because they reflect the most up-to-date operating results of the stations inclusive of 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, Indiana, Maryland, Missouri, Montana, Texas, Pennsylvania, Louisiana, Arkansas, Alabama and New York. The Company’s television station group includes affiliates of NBC, CBS, ABC, Fox and UPN, 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(1)
| | Market
| | Station
| | Affiliation
| | Status (2)
|
| 8 | | Washington, DC/Hagerstown, MD (3) | | 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 |
| | | | | KSFX(4) | | 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 – Springdale – Rogers, AR | | KFTA(5)/ KNWA(5) | | NBC | | O&O(6) |
| 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 WTVO | | Fox ABC | | O&O LSA(7) |
| 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 |
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| Nexstar Broadcasting Group Q4 2004 Results, 3/4/05 | | page 6 |
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Market Rank(1)
| | Market
| | Station
| | Affiliation
| | Status (2)
|
| 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 WBAK | | NBC Fox | | O&O 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 KLST | | NBC CBS | | LSA O&O |
| 201 | | St. Joseph, MO | | KQTV | | ABC | | O&O |
| (1) | Market rank refers to ranking the size of the Designated Market Area (“DMA”), in which the station is located in relation to other DMAs. Source:Investing in Television Market Report 2004 3rd Edition, as published by BIA Financial Network, Inc. |
| (2) | 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. |
| (3) | 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. |
| (4) | Effective January 17, 2005, KDEB changed its call letters to KSFX. |
| (5) | Effective August 13, 2004, KPOM changed its call letters to KFTA and KFAA changed its call letters to KNWA. |
| (6) | Acquisition was consummated on January 7, 2005. |
| (7) | Acquisition by Mission was consummated on January 4, 2005. |
Forward-Looking Statements
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 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 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.
Contact:
| | |
| G. Robert Thompson | | Stewart Lewack, Joseph Jaffoni |
| Chief Financial Officer | | Jaffoni & Collins Incorporated |
| Nexstar Broadcasting Group, Inc. | | (212) 835-8500 ornxst@jcir.com |
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| Nexstar Broadcasting Group Q4 2004 Results, 3/4/05 | | page 7 |
Nexstar Broadcasting Group, Inc.
Condensed Consolidated Statements of Operations
(dollars and shares in thousands, except per share amounts)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended
December 31,
| | | Year Ended December 31,
| |
| | | 2004
| | | 2003
| | | 2004
| | | 2003
| |
Revenue (excluding trade and barter) | | $ | 74,030 | | | $ | 60,246 | | | $ | 259,664 | | | $ | 222,427 | |
Less: commissions | | | (10,184 | ) | | | (7,813 | ) | | | (35,005 | ) | | | (28,884 | ) |
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Net broadcast revenue (excluding trade and barter) | | | 63,846 | | | | 52,433 | | | | 224,659 | | | | 193,543 | |
Trade and barter revenue | | | 6,617 | | | | 6,591 | | | | 21,081 | | | | 20,789 | |
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Total net revenue | | | 70,463 | | | | 59,024 | | | | 245,740 | | | | 214,332 | |
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Operating expenses: | | | | | | | | | | | | | | | | |
Station direct operating expenses, net of trade (exclusive of depreciation and amortization shown separately below) | | | 15,103 | | | | 14,158 | | | | 58,426 | | | | 54,310 | |
Selling, general, and administrative expenses (exclusive of depreciation and amortization shown separately below) | | | 16,554 | | | | 15,291 | | | | 60,725 | | | | 57,385 | |
Merger related expenses | | | — | | | | 11,754 | | | | 456 | | | | 11,754 | |
IPO related expenses | | | — | | | | 4,058 | | | | — | | | | 4,058 | |
Time brokerage agreement expenses | | | 143 | | | | 150 | | | | 653 | | | | 389 | |
Trade and barter expense | | | 6,587 | | | | 6,445 | | | | 20,965 | | | | 20,576 | |
Corporate expenses | | | 4,080 | | | | 4,377 | | | | 10,941 | | | | 12,607 | |
Amortization of broadcast rights, excluding barter | | | 2,627 | | | | 3,599 | | | | 11,458 | | | | 11,816 | |
Amortization of intangible assets | | | 6,266 | | | | 7,226 | | | | 26,463 | | | | 24,934 | |
Depreciation | | | 4,511 | | | | 5,115 | | | | 17,949 | | | | 20,467 | |
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Total operating expenses | | | 55,871 | | | | 72,173 | | | | 208,036 | | | | 218,296 | |
| | |
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|
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Income (loss) from operations | | | 14,592 | | | | (13,149 | ) | | | 37,704 | | | | (3,964 | ) |
Interest expense, including amortization of debt financing costs | | | (13,260 | ) | | | (25,293 | ) | | | (52,265 | ) | | | (68,342 | ) |
Loss on extinguishment of debt | | | — | | | | (4,953 | ) | | | (8,704 | ) | | | (10,767 | ) |
Interest income | | | 51 | | | | 135 | | | | 113 | | | | 606 | |
Other income, net | | | 363 | | | | 1,013 | | | | 4,931 | | | | 3,860 | |
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Income (loss) before income taxes | | | 1,746 | | | | (42,247 | ) | | | (18,221 | ) | | | (78,607 | ) |
Income tax benefit (expense) | | | (1,548 | ) | | | 17,344 | | | | (4,385 | ) | | | 14,920 | |
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Income (loss) before cumulative effect of change in accounting principle and minority interest in consolidated entity | | | 198 | | | | (24,903 | ) | | | (20,606 | ) | | | (63,687 | ) |
Cumulative effect of change in accounting principle, net of tax | | | — | | | | — | | | | — | | | | (8,898 | ) |
Minority interest in consolidated entity | | | 543 | | | | 523 | | | | 2,106 | | | | 786 | |
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Net income (loss) | | $ | 741 | | | $ | (24,380 | ) | | $ | (20,500 | ) | | $ | (71,799 | ) |
Accretion of preferred interests | | | — | | | | — | | | | — | | | | (15,319 | ) |
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Net income (loss) attributable to common shareholders | | $ | 741 | | | $ | (24,380 | ) | | $ | (20,500 | ) | | $ | (87,118 | ) |
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Basic and diluted net income (loss) per share: | | | | | | | | | | | | | | | | |
Net income (loss) attributable to common shareholders | | $ | 0.03 | | | $ | (1.29 | ) | | $ | (0.72 | ) | | $ | (5.59 | ) |
Weighted average number of shares outstanding: | | | | | | | | | | | | | | | | |
Basic and diluted | | | 28,363 | | | | 18,971 | | | | 28,363 | | | | 15,576 | |
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| Nexstar Broadcasting Group Q4 2004 Results, 3/4/05 | | page 8 |
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 Ended
December 31,
| | | Year Ended
December 31,
| |
| | | 2004
| | 2003
| | | 2004
| | 2003
| |
| | | (Unaudited) | | | (Unaudited) | |
Income (loss) from operations | | $ | 14,592 | | $ | (13,149 | ) | | $ | 37,704 | | $ | (3,964 | ) |
Add: | | | | | | | | | | | | | | |
Depreciation | | | 4,511 | | | 5,115 | | | | 17,949 | | | 20,467 | |
Amortization of intangible assets | | | 6,266 | | | 7,226 | | | | 26,463 | | | 24,934 | |
Amortization of broadcast rights, excluding barter | | | 2,627 | | | 3,599 | | | | 11,458 | | | 11,816 | |
Merger and related expenses | | | — | | | 11,754 | | | | 456 | | | 11,754 | |
IPO related expenses | | | — | | | 4,058 | | | | — | | | 4,058 | |
Time brokerage agreement expenses | | | 143 | | | 150 | | | | 653 | | | 389 | |
Corporate expenses | | | 4,080 | | | 4,377 | | | | 10,941 | | | 12,607 | |
Program buyouts | | | — | | | 1,152 | | | | 55 | | | 1,152 | |
| | | | |
Less: | | | | | | | | | | | | | | |
Payments for broadcast rights | | | 2,622 | | | 4,122 | | | | 10,520 | | | 12,395 | |
| | |
|
| |
|
|
| |
|
| |
|
|
|
Broadcast cash flow | | $ | 29,597 | | $ | 20,160 | | | $ | 95,159 | | $ | 70,818 | |
| | | | |
Less: | | | | | | | | | | | | | | |
Corporate expenses | | | 4,080 | | | 4,377 | | | | 10,941 | | | 12,607 | |
| | |
|
| |
|
|
| |
|
| |
|
|
|
Adjusted EBITDA | | $ | 25,517 | | $ | 15,783 | | | $ | 84,218 | | $ | 58,211 | |
| | |
|
| |
|
|
| |
|
| |
|
|
|
Nexstar Broadcasting Group, Inc.
Reconciliation Between Actual Consolidated Statements of Operations
and Free Cash Flow (Non-GAAP Measure)
(dollars in thousands)
| | | | | | | | | | | | | | |
| | | Three Months Ended
December 31,
| | | Year Ended December 31,
| |
| | | 2004
| | 2003
| | | 2004
| | 2003
| |
| | | (Unaudited) | | | (Unaudited) | |
Income (loss) from operations | | $ | 14,592 | | $ | (13,149 | ) | | $ | 37,704 | | $ | (3,964 | ) |
Add: | | | | | | | | | | | | | | |
Depreciation | | | 4,511 | | | 5,115 | | | | 17,949 | | | 20,467 | |
Amortization of intangible assets | | | 6,266 | | | 7,226 | | | | 26,463 | | | 24,934 | |
Amortization of broadcast rights, excluding barter | | | 2,627 | | | 3,599 | | | | 11,458 | | | 11,816 | |
| | | | |
Less: | | | | | | | | | | | | | | |
Payments for broadcast rights | | | 2,622 | | | 4,122 | | | | 10,520 | | | 12,395 | |
Cash interest expense | | | 10,085 | | | 21,907 | | | | 40,482 | | | 46,437 | |
Capital expenditures | | | 3,182 | | | 1,786 | | | | 10,552 | | | 10,311 | |
Cash taxes, net of refunds | | | 16 | | | 27 | | | | 818 | | | 210 | |
| | |
|
| |
|
|
| |
|
| |
|
|
|
Free Cash Flow | | $ | 12,091 | | $ | (25,051 | ) | | $ | 31,202 | | $ | (16,100 | ) |
| | |
|
| |
|
|
| |
|
| |
|
|
|
- tables follow -
| | |
| Nexstar Broadcasting Group Q4 2004 Results, 3/4/05 | | page 9 |
Nexstar Broadcasting Group, Inc.
Reconciliation of Historical GAAP and Pro Forma Results (unaudited)
(dollars in thousands)
| | | | | | | | | | | | | | | | | | | | | | | |
| | | Q1 2003
GAAP
| | Adjustments
| | | Q1 2003
Pro Forma
| | | Q2 2003
GAAP
| | | Adjustments
| | | Q2 2003 Pro Forma
| |
Revenue | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Local | | $ | 30,041 | | $ | 3,810 | | | $ | 33,851 | | | $ | 35,690 | | | $ | 2,981 | | | $ | 38,671 | |
National | | | 14,435 | | | 1,776 | | | | 16,211 | | | | 17,464 | | | | 1,606 | | | | 19,070 | |
Political | | | 257 | | | 15 | | | | 272 | | | | 1,533 | | | | 44 | | | | 1,577 | |
Network Compensation | | | 2,088 | | | 233 | | | | 2,321 | | | | 2,169 | | | | 225 | | | | 2,394 | |
Other | | | 1,480 | | | 61 | | | | 1,541 | | | | 1,636 | | | | 53 | | | | 1,689 | |
| | |
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Gross Revenue | | | 48,301 | | | 5,895 | | | | 54,196 | | | | 58,492 | | | | 4,909 | | | | 63,401 | |
| | | | | | |
National Rep and Agency Commissions | | | 6,207 | | | 869 | | | | 7,076 | | | | 7,653 | | | | 738 | | | | 8,391 | |
| | |
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Net Broadcast Revenue | | | 42,094 | | | 5,026 | | | | 47,120 | | | | 50,839 | | | | 4,171 | | | | 55,010 | |
Trade and Barter Revenue | | | 5,160 | | | 176 | | | | 5,336 | | | | 4,346 | | | | 63 | | | | 4,409 | |
| | |
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total Net Revenue | | | 47,254 | | | 5,202 | | | | 52,456 | | | | 55,185 | | | | 4,234 | | | | 59,419 | |
| | | | | | |
Station Direct Operating expenses, net of trade | | | 12,840 | | | 2,487 | | | | 15,327 | | | | 13,184 | | | | 1,868 | | | | 15,052 | |
Selling, General and Administrative expenses | | | 12,921 | | | 2,648 | | | | 15,569 | | | | 14,878 | | | | 2,105 | | | | 16,983 | |
Corporate Overhead | | | 2,255 | | | — | | | | 2,255 | | | | 2,471 | | | | — | | | | 2,471 | |
Merger related expenses | | | — | | | — | | | | — | | | | — | | | | — | | | | — | |
IPO related expenses | | | — | | | — | | | | — | | | | — | | | | — | | | | — | |
Trade and barter expense | | | 5,200 | | | 151 | | | | 5,351 | | | | 4,136 | | | | 71 | | | | 4,207 | |
Depreciation and amortization | | | 10,756 | | | 349 | | | | 11,105 | | | | 10,602 | | | | 251 | | | | 10,853 | |
Amortization of Broadcast rights, excluding barter | | | 2,706 | | | 163 | | | | 2,869 | | | | 2,655 | | | | 163 | | | | 2,818 | |
| | |
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total operating expenses | | | 46,678 | | | 5,798 | | | | 52,476 | | | | 47,926 | | | | 4,458 | | | | 52,384 | |
| | | | | | |
Income (loss) from operations | | | 576 | | | (596 | ) | | | (20 | ) | | | 7,259 | | | | (224 | ) | | | 7,035 | |
| | | | | | |
Supplemental information: | | | | | | | | | | | | | | | | | | | | | | | |
Broadcast film payments | | | 2,849 | | | 163 | | | | 3,012 | | | | 2,648 | | | | 163 | | | | 2,811 | |
Overhead related to Quorum | | | 1,106 | | | — | | | | 1,106 | | | | 1,093 | | | | — | | | | 1,093 | |
Program buyouts | | | — | | | — | | | | — | | | | — | | | | — | | | | — | |
| | | | | | |
| | | Q3 2003
GAAP
| | Adjustments
| | | Q3 2003
Pro Forma
| | | Q4 2003
GAAP
| | | Adjustments
| | | Q4 2003 Pro Forma
| |
Revenue | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Local | | $ | 34,103 | | $ | 2,801 | | | $ | 36,904 | | | $ | 37,861 | | | $ | 2,287 | | | $ | 40,148 | |
National | | | 16,471 | | | 1,296 | | | | 17,767 | | | | 16,586 | | | | 925 | | | | 17,511 | |
Political | | | 1,045 | | | 79 | | | | 1,124 | | | | 2,236 | | | | 57 | | | | 2,293 | |
Network Compensation | | | 2,143 | | | 222 | | | | 2,365 | | | | 1,929 | | | | 199 | | | | 2,128 | |
Other | | | 1,626 | | | 51 | | | | 1,677 | | | | 1,633 | | | | 65 | | | | 1,698 | |
| | |
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Gross Revenue | | | 55,388 | | | 4,449 | | | | 59,837 | | | | 60,245 | | | | 3,533 | | | | 63,778 | |
| | | | | | |
National Rep and Agency Commissions | | | 7,211 | | | 669 | | | | 7,881 | | | | 7,812 | | | | 482 | | | | 8,294 | |
| | |
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Net Broadcast Revenue | | | 48,177 | | | 3,780 | | | | 51,956 | | | | 52,433 | | | | 3,051 | | | | 55,484 | |
Trade and Barter Revenue | | | 4,692 | | | 109 | | | | 4,802 | | | | 6,591 | | | | 74 | | | | 6,665 | |
| | |
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total Net Revenue | | | 52,869 | | | 3,889 | | | | 56,758 | | | | 59,024 | | | | 3,125 | | | | 62,149 | |
| | | | | | |
Station Direct Operating expenses, net of trade | | | 14,128 | | | 1,916 | | | | 16,044 | | | | 14,158 | | | | 1,311 | | | | 15,469 | |
Selling, General and Administrative expenses | | | 14,534 | | | 2,097 | | | | 16,630 | | | | 15,435 | | | | 1,509 | | | | 16,944 | |
Corporate Overhead | | | 3,506 | | | — | | | | 3,508 | | | | 4,377 | | | | — | | | | 4,377 | |
Merger related expenses | | | — | | | — | | | | — | | | | 11,754 | | | | — | | | | 11,754 | |
IPO related expenses | | | — | | | — | | | | — | | | | 4,058 | | | | — | | | | 4,058 | |
Trade and barter expense | | | 4,795 | | | 92 | | | | 4,886 | | | | 6,445 | | | | 72 | | | | 6,517 | |
Depreciation and amortization | | | 11,702 | | | 245 | | | | 11,947 | | | | 12,341 | | | | 183 | | | | 12,524 | |
Amortization of Broadcast rights, excluding barter | | | 2,854 | | | 169 | | | | 3,020 | | | | 3,605 | | | | 183 | | | | 3,788 | |
| | |
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total operating expenses | | | 51,519 | | | 4,519 | | | | 56,035 | | | | 72,173 | | | | 3,258 | | | | 75,431 | |
| | | | | | |
Income (loss) from operations | | | 1,350 | | | (630 | ) | | | 723 | | | | (13,149 | ) | | | (133 | ) | | | (13,282 | ) |
| | | | | | |
Supplemental information: | | | | | | | | | | | | | | | | | | | | | | | |
Broadcast film payments | | | 2,776 | | | 169 | | | | 2,943 | | | | 4,123 | | | | 183 | | | | 4,306 | |
Overhead related to Quorum | | | 1,780 | | | — | | | | 1,780 | | | | 1,680 | | | | — | | | | 1,680 | |
Program buyouts | | | — | | | — | | | | — | | | | 1,152 | | | | — | | | | 1,152 | |
- tables follow -
| | |
| Nexstar Broadcasting Group Q4 2004 Results, 3/4/05 | | page 10 |
Nexstar Broadcasting Group, Inc.
Reconciliation of Historical GAAP and ProForma Results (unaudited)
(dollars in thousands)
| | | | | | | | | | | | | | | | | | | |
| | | Q1 2004
GAAP
| | Adjustments
| | | Q1 2004
Pro Forma
| | Q2 2004
GAAP
| | Adjustments
| | Q2 2004 Pro Forma
|
Revenue | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Local | | $ | 33,849 | | $ | 1,737 | | | $ | 35,586 | | $ | 39,066 | | $ | 1,572 | | $ | 40,638 |
National | | | 16,075 | | | 724 | | | | 16,799 | | | 18,485 | | | 583 | | | 19,068 |
Political | | | 3,383 | | | 187 | | | | 3,570 | | | 4,293 | | | 6 | | | 4,299 |
Network Compensation | | | 2,078 | | | 209 | | | | 2,287 | | | 2,151 | | | 189 | | | 2,340 |
Other | | | 1,042 | | | 64 | | | | 1,106 | | | 1,264 | | | 54 | | | 1,318 |
| | |
|
| |
|
|
| |
|
| |
|
| |
|
| |
|
|
Gross Revenue | | | 56,427 | | | 2,921 | | | | 59,348 | | | 65,259 | | | 2,404 | | | 67,663 |
| | | | | | |
National Rep and Agency Commissions | | | 7,459 | | | 420 | | | | 7,879 | | | 8,791 | | | 339 | | | 9,130 |
| | |
|
| |
|
|
| |
|
| |
|
| |
|
| |
|
|
Net Broadcast Revenue | | | 48,968 | | | 2,501 | | | | 51,469 | | | 56,468 | | | 2,065 | | | 58,533 |
Trade and Barter Revenue | | | 5,268 | | | 55 | | | | 5,323 | | | 4,688 | | | 28 | | | 4,716 |
| | |
|
| |
|
|
| |
|
| |
|
| |
|
| |
|
|
Total Net Revenue | | | 54,236 | | | 2,556 | | | | 56,792 | | | 61,156 | | | 2,093 | | | 63,249 |
| | | | | | |
Station Direct Operating expenses, net of trade | | | 14,307 | | | 1,109 | | | | 15,416 | | | 14,184 | | | 767 | | | 14,951 |
Selling, General and Administrative expenses | | | 14,458 | | | 1,151 | | | | 15,609 | | | 14,592 | | | 831 | | | 15,423 |
Corporate Overhead | | | 2,036 | | | — | | | | 2,036 | | | 2,205 | | | — | | | 2,205 |
Merger and time brokerage agreement expenses | | | 681 | | | — | | | | 681 | | | 128 | | | — | | | 128 |
Trade and barter expense | | | 5,049 | | | 66 | | | | 5,115 | | | 4,522 | | | 28 | | | 4,550 |
Depreciation and amortization | | | 12,043 | | | 273 | | | | 12,316 | | | 11,177 | | | 200 | | | 11,377 |
Amortization of Broadcast rights, excluding barter | | | 3,003 | | | 185 | | | | 3,188 | | | 2,656 | | | 113 | | | 2,769 |
| | |
|
| |
|
|
| |
|
| |
|
| |
|
| |
|
|
Total operating expenses | | | 51,577 | | | 2,784 | | | | 54,361 | | | 49,464 | | | 1,939 | | | 51,403 |
| | | | | | |
Income (loss) from operations | | | 2,659 | | | (228 | ) | | | 2,431 | | | 11,692 | | | 154 | | | 11,846 |
| | | | | | |
Supplemental information: | | | | | | | | | | | | | | | | | | | |
Broadcast film payments | | | 2,782 | | | 185 | | | | 2,967 | | | 2,649 | | | 113 | | | 2,762 |
| | | | | | |
| | | Q3 2004
GAAP
| | Adjustments
| | | Q3 2004
Pro Forma
| | Q4 2004
GAAP
| | Adjustments
| | Q4 2004 Pro Forma
|
Revenue | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Local | | $ | 36,876 | | $ | 1,089 | | | $ | 37,965 | | $ | 39,856 | | $ | 415 | | $ | 40,271 |
National | | | 17,627 | | | 267 | | | | 17,894 | | | 17,855 | | | 106 | | | 17,961 |
Political | | | 6,052 | | | 27 | | | | 6,079 | | | 12,938 | | | 48 | | | 12,986 |
Network Compensation | | | 2,181 | | | 186 | | | | 2,366 | | | 2,098 | | | 37 | | | 2,135 |
Other | | | 1,212 | | | 19 | | | | 1,232 | | | 1,283 | | | 7 | | | 1,290 |
| | |
|
| |
|
|
| |
|
| |
|
| |
|
| |
|
|
Gross Revenue | | | 63,948 | | | 1,588 | | | | 65,536 | | | 74,030 | | | 613 | | | 74,643 |
| | | | | | |
National Rep and Agency Commissions | | | 8,571 | | | 215 | | | | 8,786 | | | 10,184 | | | 87 | | | 10,271 |
| | |
|
| |
|
|
| |
|
| |
|
| |
|
| |
|
|
Net Broadcast Revenue | | | 55,377 | | | 1,373 | | | | 56,750 | | | 63,846 | | | 526 | | | 64,372 |
Trade and Barter Revenue | | | 4,507 | | | 13 | | | | 4,520 | | | 6,617 | | | 5 | | | 6,622 |
| | |
|
| |
|
|
| |
|
| |
|
| |
|
| |
|
|
Total Net Revenue | | | 59,884 | | | 1,386 | | | | 61,270 | | | 70,463 | | | 531 | | | 70,994 |
| | | | | | |
Station Direct Operating expenses, net of trade | | | 14,832 | | | 563 | | | | 15,395 | | | 15,103 | | | 205 | | | 15,308 |
Selling, General and Administrative expenses | | | 15,121 | | | 593 | | | | 15,714 | | | 16,554 | | | 217 | | | 16,771 |
Corporate Overhead | | | 2,620 | | | — | | | | 2,620 | | | 4,080 | | | — | | | 4,080 |
Time brokerage agreement expenses | | | 157 | | | — | | | | 157 | | | 143 | | | — | | | 143 |
Trade and barter expense | | | 4,807 | | | 16 | | | | 4,823 | | | 6,587 | | | 3 | | | 6,590 |
Depreciation and amortization | | | 10,415 | | | 146 | | | | 10,561 | | | 10,777 | | | 58 | | | 10,835 |
Amortization of Broadcast rights, excluding barter | | | 3,172 | | | 69 | | | | 3,241 | | | 2,627 | | | 21 | | | 2,648 |
| | |
|
| |
|
|
| |
|
| |
|
| |
|
| |
|
|
Total operating expenses | | | 51,124 | | | 1,387 | | | | 52,511 | | | 55,871 | | | 504 | | | 56,375 |
| | | | | | |
Income (loss) from operations | | | 8,760 | | | (1 | ) | | | 8,759 | | | 14,592 | | | 27 | | | 14,619 |
| | | | | | |
Supplemental information: | | | | | | | | | | | | | | | | | | | |
Broadcast film payments | | | 2,467 | | | 69 | | | | 2,536 | | | 2,622 | | | 20 | | | 2,642 |
Note: Adjustments reflect amounts contributed by certain stations prior to Nexstar or Mission Broadcasting commencing operation under a local service agreement (or closing of acquisition), as if Nexstar or Mission had been operating those stations since January 1, 2003. Those stations include KARK in Little Rock, AR and WDHN in Dothan, AL, both of which Nexstar began operating under a TBA in February 2003; WBAK in Terre Haute, IN, which Mission began operating under a TBA in May 2003; KFTA/KNWA in Fort Smith-Fayetteville-Springdale-Rogers, AR, which Nexstar began operating under a TBA in October 2003; KLST, which Nexstar began operating under a TBA in June 2004; WUTR, which Mission began operating on April 1, 2004; and, WTVO in Rockford, IL, which Mission began operating under a TBA in November 2004.
# # #
