Exhibit 99.1
News Announcement | For Immediate Release |
Nexstar Broadcasting Group Reports 2005 Third Quarter Results
Irving, TX – November 2, 2005—Nexstar Broadcasting Group, Inc. (NASDAQ: NXST) today reported financial results for the third quarter ended September 30, 2005.
Summary 2005 Third Quarter Highlights:
Reported total net revenue for the 2005 third quarter was $54.0 million, a decrease of 9.9% from net revenue of $59.9 million in the 2004 third quarter. Nexstar’s guidance, issued on August 2, 2005, was for total net revenue in the 2005 third quarter of approximately $52.0 to $53.0 million.
The following table summarizes reported highlights for the three-month period ended September 30, 2005:
| | | | | | | | | | | |
| (dollars and shares in millions, except per share data) | | Three Months Ended September 30,
| | | | |
| | | 2005
| | | 2004
| | | Change
| |
Gross local and national advertising revenue, excluding political | | $ | 53.5 | | | $ | 54.5 | | | (1.8 | )% |
Gross political advertising revenue | | $ | 0.2 | | | $ | 6.1 | | | (96.7 | )% |
Total gross advertising revenue | | $ | 53.7 | | | $ | 60.6 | | | (11.4 | )% |
Total net revenue(1) | | $ | 54.0 | | | $ | 59.9 | | | (9.9 | )% |
Station direct operating expenses, SG&A expenses and cash program payments | | $ | 32.9 | | | $ | 32.4 | | | 1.5 | % |
Broadcast cash flow(2) | | $ | 16.7 | | | $ | 22.7 | | | (26.4 | )% |
Corporate expenses | | $ | 2.8 | | | $ | 2.6 | | | 7.7 | % |
Adjusted EBITDA(2) | | $ | 13.8 | | | $ | 20.0 | | | (31.0 | )% |
Loss on extinguishment of debt | | $ | — | | | $ | (1.9 | ) | | — | |
Net loss attributable to common shareholders | | $ | (8.9 | ) | | $ | (5.7 | ) | | (56.1 | )% |
Diluted net loss per share attributable to common shareholders | | $ | (0.31 | ) | | $ | (0.20 | ) | | (55.0 | )% |
Weighted basic and diluted shares outstanding | | | 28.4 | | | | 28.4 | | | — | |
Free cash flow(2) | | $ | 1.9 | | | $ | 5.7 | | | (66.7 | )% |
| (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 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. |
Summary Pro Forma Highlights:
Pro forma results reflect the completed acquisitions of certain television stations as if they had occurred on January 1, 2004. The following table summarizes pro forma highlights for the three-month period ended September 30, 2005:
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Nexstar Broadcasting Group Q3 2005 Results, 11/2/05 | page 2 |
| | | | | | | | | |
Summary 2005 Pro Forma Highlights: (1)
| | Three Months Ended September 30,
| | | |
| (dollars in millions) | | 2005(2)
| | 2004
| | Change
| |
Total net revenue | | $ | 54.0 | | $ | 61.3 | | (11.9 | )% |
Station direct operating expenses, SG&A expenses and cash program payments | | $ | 32.9 | | $ | 33.6 | | (2.1 | )% |
| (1) | “Pro forma” is a non-GAAP financial measure. For a more complete definition of “pro forma” and reconciliation of these results to 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. |
| (2) | There are no pro forma adjustments presented for the three months ended September 30, 2005 as there were no acquisitions or dispositions completed during the period. |
CEO Comment
Perry A. Sook, Chairman, President and Chief Executive Officer of Nexstar Broadcasting Group, Inc., commented, “In the third quarter, Nexstar performed slightly ahead of its net revenue guidance, despite the challenging advertising environment, which included continued weakness in the automotive category and the absence of Olympic related advertising on our NBC affiliates. We partially offset these negative industry trends by attracting new advertisers to our stations and increasing the amount of project revenue that our stations generate. Year-over-year quarterly revenue comparisons also reflect the absence of approximately $6.1 million of revenue related to political advertising.
“We continue to reposition the Company for a return to growth in 2006 by pre-selling advertising in advance of the Winter Olympics, expanding project revenue programs, and launching additional local news broadcasts in several of our markets.
“We are also making progress in retransmission consent negotiations across our markets. Last month, we completed a retransmission consent agreement with Cox Communications, one of the cable industry’s largest operators, spanning a combined 21 stations across 12 markets. Although the confidentiality provisions limit Nexstar and Cox from discussing publicly the financial aspects of this agreement, we are pleased to have reached an economic agreement that is acceptable to both parties. We look forward to announcing additional agreements in the periods ahead.”
Additional Expense Detail on Reported 2005 Third Quarter Results
Depreciation and amortization was $10.6 million in the third quarter of 2005, compared to $10.4 million in the third quarter of 2004. The higher depreciation and amortization expense for the third quarter of 2005 is primarily the result of the amortization of intangible assets from newly acquired television station WTVO, partially offset by assets at certain stations becoming fully amortized.
Interest expense in the third quarter of 2005 was $11.4 million, compared to $13.1 million for the same period in 2004. 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, 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 debt outstanding incurred in 2005 under our and Mission Broadcasting Inc.’s senior credit facilities.
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Nexstar Broadcasting Group Q3 2005 Results, 11/2/05 | page 3 |
Capital expenditures in the third quarter of 2005 were $3.5 million, compared to $3.3 million in the third quarter of 2004. Cash interest for the third quarter of 2005 was $8.4 million, compared to $10.3 million for the same period in 2004. 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 7% senior subordinated notes.
Liquidity and Cash Flow
Free cash flow for the 2005 third quarter was $1.9 million, compared to $5.7 million in the year-ago quarter. The decrease in free cash flow for the 2005 third quarter is primarily due to a decline in political advertising revenue compared to the year-ago third quarter.
At September 30, 2005, the Company’s total debt, which reflects a repayment of $6.5 million under Nexstar’s credit facility, was approximately $644.5 million and cash balances were $5.8 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 was $540.2 million at September 30, 2005, net of cash on hand, which resulted in a leverage ratio as defined per the credit agreement of 7.4x, compared to a permitted leverage covenant of 7.5x under the new credit facilities. Covenants under the credit facilities exclude Nexstar Finance Holdings, Inc.’s 11.375% notes, which have accreted to $98.5 million as of September 30, 2005.
Amended Credit Facility
Subsequent to the close of the quarter, Nexstar Broadcasting, Inc., an indirect operating subsidiary of Nexstar, and Mission Broadcasting, Inc., borrowers under the senior secured credit facilities, successfully amended the facilities to adjust certain financial covenants under the agreements. Pursuant to the amendments, the maximum consolidated total and senior leverage ratios (as defined per the credit agreements) for Nexstar and Mission were adjusted to 8.5x and 5.5x times, respectively, with quarterly reductions starting in the period commencing January 1, 2006. As of September 30, 2005, Nexstar had $175.8 million outstanding under its facility, while Mission had $172.7 million outstanding under its facility.
Retransmission Consent Agreement with Cox Communications
On October 20, 2005, Cox Communications, Inc., Nexstar Broadcasting Group, Inc. and Mission Broadcasting, Inc. signed a retransmission consent agreement for analog and digital carriage rights. The agreement covers 12 Nexstar stations and 9 Mission stations serving the following Designated Market Areas: Abilene-Sweetwater, San Angelo, Lubbock, Amarillo, Odessa-Midland and Beaumont-Port Arthur, TX; Shreveport, LA.; Fort Smith, Little Rock and Monroe-El Dorado, AR; Springfield and Joplin, MO and Pittsburg, KS. Pursuant to the new agreement, all affected Nexstar and Mission stations have returned to their respective cable systems.
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Nexstar Broadcasting Group Q3 2005 Results, 11/2/05 | page 4 |
Summary 2005 Fourth-Quarter Outlook
Nexstar issued the following outlook for the three- and twelve-month periods ending December 31, 2005:
| | | | | | | | | | | | | | | | |
2005 Fourth Quarter Estimates (in millions) | | Three Months Ended December 31,
| |
| | Twelve Months Ended December 31,
| |
|
| | | 2005 Estimate
| | 2004
Actual
| | Approximate Change
| | 2005 Estimate
| | 2004
Actual
| | Approximate Change
|
Gross local and national advertising revenue, excluding political | | $ | 58.0 -59.0 | | $ | 57.7 | | 0.5 -2.3% | | $ | 219.3 – 220.3 | | $ | 219.7 | | (0.2) - 0.3% |
Gross political advertising revenue | | $ | 0.4 - 0.5 | | $ | 12.9 | | (96.9) -(96.1)% | | $ | 1.8 – 1.9 | | $ | 26.7 | | (93.3) –(92.9)% |
Total gross advertising revenue | | $ | 58.4 -59.5 | | $ | 70.6 | | (17.3) -(15.7)% | | $ | 221.1 – 222.2 | | $ | 246.4 | | (10.3) – (9.8)% |
Total net revenue | | $ | 58.0 -59.0 | | $ | 70.5 | | (17.7) -(16.3)% | | $ | 222.5 – 223.5 | | $ | 245.7 | | (9.4) – (9.0)% |
Station direct operating expenses, SG&A expenses and cash program payments | | $ | 34.2 -34.7 | | $ | 34.3 | | (0.3) - 1.2% | | $ | 131.0 – 131.5 | | $ | 129.7 | | 1.0 – 1.4% |
The Company’s financial outlook for the fourth quarter ending December 31, 2005 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. 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.
Third-Quarter Conference Call
Nexstar will host a conference call at 10:00 a.m. ET today. Senior management will discuss the financial results and host a question and answer session. A live audio webcast of the call will be accessible to the public on the Company’s web site, www.nexstar.tv. A recording of the webcast will subsequently be archived on the site. The dial in number for the audio conference call is
800-967-7141, (719-457-2630 for international callers); no access code is needed. A replay of the call will be available through November 9, 2005 by dialing 888-203-1112, (719-457-0820 for international callers), and entering access code 1346445.
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, 2004. Pro Forma results for the three-month period ended September 30, 2004 includes the acquisition of WTVO in Rockford, IL, by Mission Broadcasting, Inc., Nexstar’s broadcasting associate, which Mission began providing services to in November 2004. Pro forma results for the nine-month period ended September 30, 2004 includes WTVO, as well as Mission’s acquisition of WUTR in Utica, NY, which Mission completed in April 2004 and Nexstar’s acquisition of KLST in San Angelo, TX, which Nexstar began operating under a TBA in June 2004.
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Nexstar Broadcasting Group Q3 2005 Results, 11/2/05 | page 5 |
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 47 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 7.0% 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 |
54 | | Wilkes Barre-Scranton, PA | | WBRE | | NBC | | O&O |
| | | | | WYOU | | CBS | | LSA |
57 | | Little Rock-Pine Bluff, AR | | KARK | | NBC | | O&O |
77 | | Springfield, MO | | KOLR | | CBS | | LSA |
| | | | | KSFX(4) | | Fox | | O&O |
79 | | Rochester, NY | | WROC | | CBS | | O&O |
| | | | | WUHF | | Fox | | LSA |
81 | | Shreveport, LA | | KTAL | | NBC | | O&O |
82 | | Champaign-Springfield-Decatur, IL | | WCIA | | CBS | | O&O |
| | | | | WCFN | | UPN | | O&O |
100 | | Evansville, IN | | WTVW | | Fox | | O&O |
104 | | Ft. Smith – Fayetteville – Springdale – Rogers, AR | | KFTA/ KNWA | | NBC | | O&O |
106 | | Ft. Wayne, IN | | WFFT | | Fox | | O&O |
117 | | Peoria-Bloomington, IL | | WMBD | | CBS | | O&O |
| | | | | WYZZ | | Fox | | LSA |
131 | | Amarillo, TX | | KAMR | | NBC | | O&O |
| | | | | KCIT | | Fox | | LSA |
| | | | | KCPN-LP | | — | | LSA |
133 | | Rockford, IL | | WQRF WTVO | | Fox ABC | | O&O LSA |
135 | | Monroe, LA-El Dorado, AR | | KARD | | Fox | | O&O |
140 | | Beaumont-Port Arthur, TX | | KBTV | | NBC | | O&O |
142 | | Erie, PA | | WJET | | ABC | | O&O |
| | | | | WFXP | | Fox | | LSA |
144 | | Wichita Falls, TX- Lawton, OK | | KFDX | | NBC | | O&O |
| | | | | KJTL | | Fox | | LSA |
| | | | | KJBO-LP | | UPN | | LSA |
145 | | Joplin, MO-Pittsburg, KS | | KSNF | | NBC | | O&O |
| | | | | KODE | | ABC | | LSA |
146 | | Lubbock, TX | | KLBK | | CBS | | O&O |
| | | | | KAMC | | ABC | | LSA |
150 | | Terre Haute, IN | | WTWO WFXW(5) | | NBC Fox | | O&O LSA |
159 | | Odessa-Midland, TX | | KMID | | ABC | | O&O |
164 | | Abilene-Sweetwater, TX | | KTAB | | CBS | | O&O |
| | | | | KRBC | | NBC | | LSA |
Nexstar Broadcasting Group Q3 2005 Results, 11/2/05 | page 6 |
| | | | | | | | |
166 | | Utica, NY | | WUTR | | ABC | | LSA |
| | | | | WFXV | | Fox | | O&O |
| | | | | WPNY-LP | | UPN | | O&O |
171 | | Billings, MT | | KSVI | | ABC | | O&O |
| | | | | KHMT | | Fox | | LSA |
172 | | Dothan, AL | | WDHN | | ABC | | O&O |
197 | | 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:Nielsen Media Research Local Universe Estimates. |
| (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 June 1, 2005, WBAK changed its call letters to WFXW. |
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 or nxst@jcir.com |
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Nexstar Broadcasting Group Q3 2005 Results, 11/2/05 | page 7 |
Nexstar Broadcasting Group, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended September 30,
| | | Nine Months Ended September 30,
| |
| | | 2005
| | | 2004
| | | 2005
| | | 2004
| |
| | | (Unaudited) | | | (Unaudited) | |
Revenue (excluding trade and barter) | | $ | 56,767 | | | $ | 63,948 | | | $ | 172,191 | | | $ | 185,634 | |
Less: commissions | | | (7,387 | ) | | | (8,571 | ) | | | (22,383 | ) | | | (24,821 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Net broadcast revenue (excluding trade and barter) | | | 49,380 | | | | 55,377 | | | | 149,808 | | | | 160,813 | |
Trade and barter revenue | | | 4,585 | | | | 4,507 | | | | 14,720 | | | | 14,464 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total net revenue | | | 53,965 | | | | 59,884 | | | | 164,528 | | | | 175,277 | |
| | |
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| |
|
|
| |
|
|
| |
|
|
|
Operating expenses: | | | | | | | | | | | | | | | | |
Station direct operating expenses, net of trade (exclusive of depreciation and amortization shown separately below) | | | 15,298 | | | | 14,832 | | | | 44,789 | | | | 43,323 | |
Selling, general, and administrative expenses (exclusive of depreciation and amortization shown separately below) | | | 15,285 | | | | 15,121 | | | | 44,664 | | | | 44,171 | |
Merger related expenses | | | | | | | — | | | | — | | | | 456 | |
Loss on property held for sale | | | — | | | | — | | | | 616 | | | | — | |
Loss (gain) on asset disposal (including deferred gain recognition), net | | | (2 | ) | | | (109 | ) | | | 29 | | | | (185 | ) |
Time brokerage agreement expenses | | | — | | | | 157 | | | | 8 | | | | 510 | |
Trade and barter expense | | | 4,378 | | | | 4,807 | | | | 14,313 | | | | 14,378 | |
Corporate expenses | | | 2,844 | | | | 2,620 | | | | 7,971 | | | | 6,861 | |
Amortization of broadcast rights, excluding barter | | | 2,668 | | | | 3,172 | | | | 7,649 | | | | 8,831 | |
Amortization of intangible assets | | | 6,630 | | | | 6,308 | | | | 20,039 | | | | 20,197 | |
Depreciation | | | 3,996 | | | | 4,107 | | | | 12,746 | | | | 13,438 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total operating expenses | | | 51,097 | | | | 51,015 | | | | 152,824 | | | | 151,980 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Income from operations | | | 2,868 | | | | 8,869 | | | | 11,704 | | | | 23,297 | |
Interest expense, including amortization of debt financing costs | | | (11,364 | ) | | | (13,132 | ) | | | (35,332 | ) | | | (39,005 | ) |
Loss on extinguishment of debt | | | — | | | | (1,880 | ) | | | (15,715 | ) | | | (8,704 | ) |
Interest income | | | 61 | | | | 29 | | | | 144 | | | | 62 | |
Other income (expenses), net | | | 424 | | | | 753 | | | | 376 | | | | 4,383 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Loss before income taxes | | | (8,011 | ) | | | (5,361 | ) | | | (38,823 | ) | | | (19,967 | ) |
Income tax expense | | | (876 | ) | | | (924 | ) | | | (3,800 | ) | | | (2,837 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Loss before minority interest in consolidated entity | | | (8,887 | ) | | | (6,285 | ) | | | (42,623 | ) | | | (22,804 | ) |
Minority interest in consolidated entity | | | — | | | | 583 | | | | — | | | | 1,563 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Net loss attributable to common shareholders | | $ | (8,887 | ) | | $ | (5,702 | ) | | $ | (42,623 | ) | | $ | (21,241 | ) |
| | |
|
|
| |
|
|
| |
|
|
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|
Basic and diluted net loss per share: | | | | | | | | | | | | | | | | |
Net loss attributable to common shareholders | | $ | (0.31 | ) | | $ | (0.20 | ) | | $ | (1.50 | ) | | $ | (0.75 | ) |
Weighted average number of shares outstanding: | | | | | | | | | | | | | | | | |
Basic and diluted | | | 28,363 | | | | 28,363 | | | | 28,363 | | | | 28,363 | |
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Nexstar Broadcasting Group Q3 2005 Results, 11/2/05 | page 8 |
Nexstar Broadcasting Group, Inc.
Reconciliation Between Actual Consolidated Statements of Operations
and Broadcast Cash Flow/Adjusted EBITDA (Non-GAAP Measures)
(in thousands)
| | | | | | | | | | | | | | | |
| | | Three Months Ended
September 30,
| | | Nine Months Ended
September 30,
| |
| | | 2005
| | | 2004
| | | 2005
| | 2004
| |
| | | (Unaudited) | | | (Unaudited) | |
Income from operations | | $ | 2,868 | | | $ | 8,869 | | | $ | 11,704 | | $ | 23,297 | |
Add: | | | | | | | | | | | | | | | |
Depreciation | | | 3,996 | | | | 4,107 | | | | 12,746 | | | 13,438 | |
Amortization of intangible assets | | | 6,630 | | | | 6,308 | | | | 20,039 | | | 20,197 | |
Amortization of broadcast rights, excluding barter | | | 2,668 | | | | 3,172 | | | | 7,649 | | | 8,831 | |
Merger and related expenses | | | — | | | | — | | | | — | | | 456 | |
Loss on property held for sale | | | — | | | | — | | | | 616 | | | — | |
Loss (gain) on asset disposal (including deferred gain recognition), net | | | (2 | ) | | | (109 | ) | | | 29 | | | (185 | ) |
Time brokerage agreement expenses | | | — | | | | 157 | | | | 8 | | | 510 | |
Corporate expenses | | | 2,844 | | | | 2,620 | | | | 7,971 | | | 6,861 | |
Program buyouts | | | — | | | | — | | | | — | | | 55 | |
Less: | | | | | | | | | | | | | | | |
Payments for broadcast rights | | | 2,323 | | | | 2,467 | | | | 7,320 | | | 7,898 | |
| | |
|
|
| |
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|
| |
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| |
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|
Broadcast cash flow | | $ | 16,681 | | | $ | 22,657 | | | $ | 53,442 | | $ | 65,562 | |
Less: | | | | | | | | | | | | | | | |
Corporate expenses | | | 2,844 | | | | 2,620 | | | | 7,971 | | | 6,861 | |
| | |
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Adjusted EBITDA | | $ | 13,837 | | | $ | 20,037 | | | $ | 45,471 | | $ | 58,701 | |
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Nexstar Broadcasting Group, Inc.
Reconciliation Between Actual Consolidated Statements of Operations
and Free Cash Flow (Non-GAAP Measure)
(in thousands)
| | | | | | | | | | | | | | | |
| | | Three Months
Ended
September 30,
| | | Nine Months Ended
September 30,
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| | | 2005
| | | 2004
| | | 2005
| | 2004
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| | | (Unaudited) | | | (Unaudited) | |
Income from operations | | $ | 2,868 | | | $ | 8,869 | | | $ | 11,704 | | $ | 23,297 | |
Add: | | | | | | | | | | | | | | | |
Depreciation . | | | 3,996 | | | | 4,107 | | | | 12,746 | | | 13,438 | |
Amortization of intangible assets | | | 6,630 | | | | 6,308 | | | | 20,039 | | | 20,197 | |
Amortization of broadcast rights, excluding barter | | | 2,668 | | | | 3,172 | | | | 7,649 | | | 8,831 | |
Loss on property held for sale | | | — | | | | — | | | | 616 | | | — | |
Loss (gain) on asset disposal (including deferred gain recognition), net | | | (2 | ) | | | (109 | ) | | | 29 | | | (185 | ) |
Less: | | | | | | | | | | | | | | | |
Payments for broadcast rights | | | 2,323 | | | | 2,467 | | | | 7,320 | | | 7,898 | |
Cash interest expense | | | 8,360 | | | | 10,328 | | | | 26,374 | | | 30,397 | |
Capital expenditures | | | 3,539 | | | | 3,298 | | | | 10,644 | | | 7,370 | |
Cash taxes, net of refunds | | | 53 | | | | 597 | | | | 168 | | | 789 | |
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Free Cash Flow | | $ | 1,885 | | | $ | 5,657 | | | $ | 8,277 | | $ | 19,124 | |
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- tables follow -
Nexstar Broadcasting Group Q3 2005 Results, 11/2/05 | page 9 |
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 | | | $ | 39,065 | | $ | 1,572 | | $ | 40,637 |
National | | | 16,075 | | | | 724 | | | | 16,799 | | | | 18,486 | | | 583 | | | 19,069 |
Political | | | 3,383 | | | | 187 | | | | 3,570 | | | | 4,293 | | | 6 | | | 4,299 |
Network Compensation | | | 2,078 | | | | 209 | | | | 2,287 | | | | 2,150 | | | 189 | | | 2,339 |
Other | | | 1,042 | | | | 64 | | | | 1,106 | | | | 1,265 | | | 54 | | | 1,319 |
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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 |
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Net Broadcast Revenue | | | 48,968 | | | | 2,501 | | | | 51,469 | | | | 56,468 | | | 2,065 | | | 58,533 |
Trade and Barter Revenue | | | 5,268 | | | | 55 | | | | 5,323 | | | | 4,689 | | | 28 | | | 4,717 |
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Total Net Revenue | | | 54,236 | | | | 2,556 | | | | 56,792 | | | | 61,157 | | | 2,093 | | | 63,250 |
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 |
Loss (gain) on asset disposal (including deferred gain recognition), net | | | (98 | ) | | | — | | | | (98 | ) | | | 22 | | | — | | | 22 |
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 |
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Total operating expenses | | | 51,479 | | | | 2,784 | | | | 54,263 | | | | 49,486 | | | 1,939 | | | 51,425 |
Income (loss) from operations | | | 2,757 | | | | (228 | ) | | | 2,529 | | | | 11,671 | | | 154 | | | 11,825 |
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 | | | | 2,367 | | | | 2,098 | | | 39 | | | 2,137 |
Other | | | 1,212 | | | | 19 | | | | 1,231 | | | | 1,283 | | | 7 | | | 1,290 |
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Gross Revenue | | | 63,948 | | | | 1,588 | | | | 65,536 | | | | 74,030 | | | 615 | | | 74,645 |
National Rep and Agency Commissions | | | 8,571 | | | | 215 | | | | 8,786 | | | | 10,184 | | | 87 | | | 10,271 |
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Net Broadcast Revenue | | | 55,377 | | | | 1,373 | | | | 56,750 | | | | 63,846 | | | 528 | | | 64,374 |
Trade and Barter Revenue | | | 4,507 | | | | 13 | | | | 4,520 | | | | 6,617 | | | 4 | | | 6,621 |
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Total Net Revenue | | | 59,884 | | | | 1,386 | | | | 61,270 | | | | 70,463 | | | 532 | | | 70,995 |
Station Direct Operating expenses, net of trade | | | 14,832 | | | | 563 | | | | 15,395 | | | | 15,102 | | | 205 | | | 15,307 |
Selling, General and Administrative expenses | | | 15,121 | | | | 593 | | | | 15,714 | | | | 16,555 | | | 217 | | | 16,772 |
Corporate Overhead | | | 2,620 | | | | — | | | | 2,620 | | | | 4,080 | | | — | | | 4,080 |
Time brokerage agreement expenses | | | 157 | | | | — | | | | 157 | | | | 143 | | | — | | | 143 |
Loss (gain) on asset disposal (including deferred gain recognition), net | | | (109 | ) | | | — | | | | (109 | ) | | | 331 | | | — | | | 331 |
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 | | | | 2,626 | | | 21 | | | 2,647 |
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Total operating expenses | | | 51,015 | | | | 1,387 | | | | 52,402 | | | | 56,201 | | | 504 | | | 56,705 |
Income (loss) from operations | | | 8,869 | | | | (1 | ) | | | 8,868 | | | | 14,262 | | | 28 | | | 14,290 |
Supplemental information: | | | | | | | | | | | | | | | | | | | | | |
Broadcast film payments | | | 2,467 | | | | 69 | | | | 2,536 | | | | 2,622 | | | 20 | | | 2,642 |
Note: Adjustments in the 2004 first quarter reflect contributions from KLST, which Nexstar began operating under a TBA in June 2004, WUTR, which Mission began operating in April 2004 after completing its acquisition of the station, and WTVO, which Mission began operating under a TBA in November 2004. Adjustments in the 2004 second quarter reflect contributions from KLST in April and May 2004 and WTVO for the entire quarter. Adjustments in the 2004 third quarter reflect contributions from WTVO for the entire quarter. Adjustments in the 2004 fourth quarter reflect contributions from WTVO in October 2004.
###
