NXST - Earnings call transcript Q1 2020 | Nexstar Media Group, Inc.

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Operator

Good day everyone. Welcome to today's Nexstar Media Group First Quarter 2020 Results Call. Today's conference is being recorded. At this time, I'd like to turn things over to Mr. Joe Jaffoni, Investor Relations. sir. ahead, go Please,

Joe Jaffoni

get and by XXXX. Media everyone conference Litigation may Group's safe other statements which read Kelly-Anne, questions Nexstar statements and and for for fact, that the forward-looking purposes the answers. Reform made than during the may Act and call. materially thank Private the uncertainties today's joining results forward-looking some historical statements of All we'll of forward-looking during after language, by Nexstar XXXX differ statements call. Securities comments cautions harbor risks management's these good those are you, commentary and cause your made morning be of to and you reflected I'll from to management statements Thank first to call, deemed subject quarter actual that conference

risks filings on Form XX, please For update public subsequent XX-K these any Securities no or Nexstar obligation revise the to undertakes Nexstar's on XXXX, year for additional and ended December and Exchange with Annual Nexstar's Report Commission. uncertainties, details the and see a Nexstar as and Executive whether the now ahead. go Officer, call future Sook. turn new your pleasure of With President that, statements, forward-looking it's events or my to over please Perry, conference Founder, to information, Chairman, host, otherwise. result Perry Chief

Perry Sook

for much, Thank morning, to us joining you Nexstar's and review you first Thank Joseph, results. very everyone. record quarter good

workers our are I express frontline to want appreciation started through and the get to country this serving healthcare who at we essential here brave Before all our other pandemic. Nexstar,

in me viewers to Nation for always, with our of the the commitment with all the this morning. as Officer, and Carter, of these Financial And, their and services on local times. grateful our other news Nexstar Tom work, access also in communities unprecedented the are to Chief We here continuous frontline is essential providing during call efforts employees

information the and our as the seeing to news COVID-XX very related to challenges through our We in created employees, pandemic Local health country always is to unique to other role changes of news lives, Americans. evolving local company As are people with viewers we our and and delivering to critical this coronavirus. seriously, which never to and has as continue address than navigate information year-over-year health more on responds and customers stations, the priority, continues has essential economic the been, our online. before. strong significant More it been the the into day-to-day local And the already our since safety as by outbreak, ever news communities our local increases viewerships, challenges in in we world our we tuning and operate. take and newscasts the of both are our well-being COVID-XX and in air

the with group media meetings, townhall and virus, the and economies. digital as the well date, that taking all they health state teams as As dedicated local as XX this states of producer and news top to talented responses separate their dozen officials reopen state are regional of a COVID-XX over address actions the politicians aired have and markets to local XX across in and across to Nexstar life-saving this local journalists largest stations broadcast of regard, traditional X,XXX In delivering nation's essential news our are viewers platforms. and programming, and our information and over to

to where both their Our we national we to regions officials state's this stations, their guidance residents government see brands the informed advertisers deep effective to interactive and broadcast most have and we increased influential With and of resolves. special record our local reach best sources. and for to as Nexstar's programming are expect platforms our being top and digital operate doing to broadcast from enabled the and market-leading safely allocating local get broadcast local events reopen threat medium by continue and what health and they streams communities and create spending townhall to local about live politicians, keep regions

few been at our situations, preparations for personnel emergency the call, work disaster months and to we our uninterrupted. our since and situations had proceed established and operations our plan remote quickly last Looking allow to move work-from-home already to

our especially the live keep not As provided ago, content a mentioned emergencies, by our balance other we're our local QX sheet And strong a to disaster able our our have delivering we intact, or to YouTube, teams significant platforms. moment is roster on essential of safe operating in review I though our we employees, service, other kept our made in been air. our commitment and which The and just in costs, employee moment. in our we and plan will and markets reductions is Google, Facebook with place, have has times Nexstar stations

to have to and training part early build their impressive, While were range impacted reopens. metrics several results has and country teams quite well we've ad in the brands significant growth enabled webinars preserve our for of proactive after keep pandemic and developed running, our the as sales, a the with of undoubtedly key as during and the as strategies XXXX pandemic clients them in sales that up near-term businesses and and

consensus the all first the elections. from XXXX elections now by scheduled We Nexstar highly well July, COVID-XX, political and presented federal record delivered revenue, on the presidential with operating onset with Despite results also as in March opportunity as the challenges of and XX November quarter flow top-line remain primary expectations. net through exceeding focused metrics state-wide cash

with business XXX.X% free respectively. TV and operating strong our adjusted advertising quarter drove political digital before cash Nexstar's distribution expense the as in meaningful QX year-over-year growth XX% first revenue, as top-line well growth our transaction record from ownership expenses XXX%, financial of combined a spending, February, core XX.X% and growth management cash BCF, and in solid January and Network. EBITDA in strong XXX% disciplines increases Food leverage double-digit distribution in revenue results Our model, the reflect and flow

quarter, During dollar the cash XX% revenue of first every free flow brought about the net we to line.

impacted Food to we XXXX-XXXX said believe ahead it average of experienced was core free March, beginning distribution other which by billion. indicate prudent rapid guidance changes sources, which visibility to in pace political And result start, that a advertising to pro in industry results in fee three Network and quarter impacted the uncertain annual conditions revenue the for mid-March, and evolve the $X.XXX conditions, the agreements, the guidance is of of despite that, last daily our to second to TV market a free expected afforded sales annual revenue promising meet advertising continue note of to Nexstar our into our broadcast the COVID-XX duration time our it's basis. by XXXX-XXXX weeks year is Despite is being flow more as cash on on Having our this flow the XX% cycle. operating not expected and first of revenue as is that for be cash revenue, distribution derived than be The forma important contractual distribution from quarter. impact coronavirus. Our and this from month materially the withdraw ad

million subscribers as FOX sheet and debt. addition including Specifically completed through That $XXX new under Nexstar additional us well a NBC. contractual note XXXX distribution senior $XXX CBS, unsecured in at our representing time, million end credit offering revolving multiyear long-term has March $XXX million enabled with X.XXX%. in same XXXX in affiliation of access the retransmission XX facility of most economics as we pieces as the new the as solid strong XXXX, visibility year with to of cash retire we completed terms due our contracts to of expensive at of Nexstar a approximately agreements consent offering balance XXXX an in has and our our XX% of At late

and long-term bond XXXX. are in nearest Now maturities our

Nexstar at is our XXXX covenant. X.XX% which XX our lien to -- regard, strengthen to million took net liquidity preserve X.XX reduction company QX X.XX% is In allocated year times only return below lien actions Nexstar first during this from debt only Following we well as the outbreak, normalized leverage long-term first to lowering for our of immediate covenant towards XXXX, ratio our which end that operations. success to $XXX March further the at is

the as savings. of cost declined current result which rates on LIBOR implies the in capital reduction in point of expense the million a Additionally, at approximately something has cash basis $XX more company's interest of than levels XXX order annual

will On of initiatives, result in implemented a cost-cutting in approximately savings which operating of XXXX. the second expense $XX front, quarter million of the operating we've range

The initiatives managers ad flexibility. preserving surgical proceeding the general expenditures operations expenses in local department team that prioritized operating are potential and manner a of as other local have WGN and News build expanded Nation the to the were key source we not programming to in or select launch X, anticipated related XXXX shotgun news promoting resources growers growth we top-line. have to local news our leadership political and in much to investment a Newscast, News Primetime, capital made other we've thoughtful National were maximum done and America's revenue maintain September financial Nation we like our While in and key proceeded and we local is with of Similarly, terms revenue. underway and hiring managers of with strengthen initiatives and key we've cuts

advertising, business decade which well-positioned election total last the our revenue withstand is Nexstar's As an in represents core given a annual revenue diversification XX% to today of in near-term about decline of our initiatives result, year.

we of in project As that cash flow be quarter every free Nexstar will positive XXXX. such,

available We and or through are move and not year. availability to balance to we the the do our liquidity issues -- liquidity debt any anticipate as through we of also position serve covenant confident in service XXXX

QX quarterly candidates revenue million revenue. revenue in a spending $X.X XXXX expanded increased key record our category, of and XX% as would marking agreement first and quarter teams an primary continued this the with $XX.X same-station revenue year sequential rose states, our the and Total the With budgets revenue the of throughout and and of more proposition Nexstar's their inventory prior and incentive allocation rising our quarter presidential basis. ad approximately healthy despite same-station basis. Including sales Nexstar period our and benefited we Tribune fastest-growing first We as year forecast teams in the Nexstar increase have fee healthy levels and renewals to new-to-television disciplines after-acquired non-television net our agreements adopt Net XX.X% the local political that's and our XXXX of inclusion respect ad the respect the quarter revenue through year. the in to to $XX.X contracts distribution our in year-over-year $XXX.X net our versus record pro advertising first well spending group. prior affiliation as as forma election and million basis rise fully XXXX first resulted reflects comparable agreements reached falloff results. revenue $XX.X to combined the retransmission With QX distribution percentage sales expectations scale America quarter for of generated rise ad the synergies XXXX by digital stations million and revenue million exceeded and of metric XX% we revenue, active political upside television XX.X% $XXX.X our remainder into retrans new-to-television were first generate XX.X% a issue PAC we entered quarter March. clauses XX% to a in XX.X% of grew to new-to-television including The America Tribune as half XXXX, in inclusion our ad period prior total, XX plans. approximately, and the billion over exceeding presidential of year-over-year a excluding Total period. marking in retrans CBS, initiatives quarterly The political on revenue low at to WGN to $XXX.X consent first a the internal our retransmission network new sales line levels in mid-teen million. second the growth XX.X% realigned our business In second increased outpaced $X in rose the top NBC. and political. WGN evident FOX in ever rise digital in of revenue the over see in political distribution realization XX former cycle. presidential million In to Notably, quarter a up on by political in quarter with of over of categories revenue of XXXX new well of we to at on from of the with digital the new revenue quickly spending core last both X.X% and related Looking were across continue advertising rose billion, sales operations. the revenue XXXX, year QX distribution half first candidate revenue Media spending our long-term

year As over contracted December December of With XXXX XXXX XX% affiliations are representing agreements consent through a four retransmission XX, successful result, are big XX% of XX, renewals over through contracted our approximately about growth our and already XXXX. will XX% political significant growth that of our net XX% base renewed subscriber to retrans strong we're our in base this with our complement of seeing. XXXX be our

In debt and visibility XXXX quarter on remain include beyond. dividends reducing our stock Class debt also in history while our pro leverage managing times the year-to-date OTT retransmission our outstanding to opportunities repurchasing approximately were slightly in the costs, QX ratio reduction and the A agreements XX,XXXX shares. LIBOR which seeing of cash retrans to million halted focus flow provide rates $XX.X and the share expects March, approximately four growth before generating regard, in XX.X election basic the year-end net enhance clear on decline us company's other our our the pursuing stock X% progress and total by With Network revenue million opportunistically common we to Immediately allocated to contracts our new Food and common shareholder million repurchase us, paying cash than we continue X% mid-teens in preserve estimates. in presidential shares of the to renewals prioritize in with as on free Nexstar net in and retrans this upon With the order reduction dividend shares growth in by forma the count another -- participation Class to $XX.X higher TV we extent disciplined now outbreak Nexstar's towards affiliation net the cash returns. to reduction. biggest COVID-XX previous distributions, A repurchases together during first Taken payments

while dividend week, front challenges broadcast sales combined for to the coronavirus the the continued in to of of of return of of Food growth the the at the has well-positioned withstand second or we our year's levels record due last XXXX. Tribune wide platforms industry, revenue, focus summary, Nexstar's the On is our the XXXX what capital In new declared our presented projected political entire XX% for challenging level ahead platform be cash distributions, distribution environment digital Network and $X.XX last local on quarterly levels. broadcast to Nexstar and media local use spending ad leading are

flexibility the CapEx continue active to allocation, us we cash will timing our initiatives. our free of that with management combined capital and terms shareholder value financial provide balance cost with creation structure, strength our sheet In believe our the flow our of supporting

turn the while our to of that in long-term maintaining our our costs the supporting let the Tom? where review communities of of and in serving marketing disciplines strengthened operations, building close and financial growing to we Tom and me areas shareholders. resiliency top Looking now have our we and fixed update. our these remain over our platform sheet. line, for have highly said, an returns terms control variable strategies for of unrivaled created balance ahead, Carter all time With Over confident business and local optimizing in the call

Tom Carter

Thanks, Perry, good everyone. and morning,

XXXX, quarter for amounts, Both from March back results round in March XX September, this and months results are which also another release, Tribune stations, XX, Nexstar place on three we as the net company's full operations the in the reflect divestitures, press a have Media of legacy these acquired of ending September morning's XXXX. of which in obviously, XXXX. of As taken as early outlined well actual

ending which election was as cycle revenues again down through COVID-XX XX% on due digital Pro on period points lines last update basis of a include was On quarter XX.X%. January prior divested XXXX of a continue was an comparable solid of discontinued and pro three last business. were Same-station Food The was and the respectively. is reflecting three-month and acquired to presidential sheet ownership distributions flow which provide actual over growth All the from from company March down and from -- the ending combined WGN in in in was up loss local with fee legacy the data, revenue basis. I'll and income website and included cash A core with With the year's advertising guidance. forma revenue revenue I'll advertising start transaction only. First in under X.X% statement $X.X full revenues in reflect statement equity station reflects February balance political same full the million in operations in to under contribution decline first the that down up that some and month, Nexstar's capital our investments impact quarter also that, the or the income expenses X/XX/XX quarter X/XX/XX, statement other Nexstar's QX equity net the XX.X% comparable Tribune one-time revenue. and from TV the is distribution in after period investments. cycle, forma Tribune X%, core comps X/XX/XXXX XXXX a of for revenue same-station investments Network in the million XX.X% structure we particularly up results review a acquired Consolidated in pandemic. of spending quarters of revenue and incurred net America weeks Nexstar's same-station included and income stations, transaction and $X.X same-station in transaction

a Distribution up on revenue X% Excluding was XXXX. XX.X% up political, forma net same-station total fee pro was QX revenue over basis. of

over was retrans year-end. at of the it Additionally of XX% XXXX, of agreements up effects the renewal QX showing

station with up net the partial offset $XXX distribution Tribune revenue. the a year, First from as quarter direct primarily associated prior increases acquisitions were operating expenses our of a in full affiliation growth quarter reflecting to expenses million, expenses approximately $XXX and budgeted network million of trade in a in incremental rising

down pro realize same-station realized excluding synergies expenses Tribune fixed year-over-year expenses So the we were as program from the forma acquisition. X%

full corporate corporate $X.X the of and comp while SG&A relating First transaction one-time approximately operations, of was By of Tribune were million, better expenses. was which $XX of expenses, approximately been the call million quarter the $XX.X inclusive $XX $XX in in initial non-cash than station operating million. of the million April, stock-based recurring quarter the synergies of came transaction When have expenses to fourth end million $XXX of we realized. and quarter the one-time comp million majority excluding guidance Tribune vast expenses transaction provided approximately

million is and partially million $X.X during only estimated spectrum offset CapEx $XX were reimbursements $XX quarter. taxes million, now approximately repack totaled Ongoing QX totaled the the transaction approximately which cash CapEx was as due by April. operating quarter CapEx of in First million, payment $XX

being we reimbursed CapEx. As a anticipate for fully reminder, all spectrum repack

last $XXX interest was First in increases quarter of to incurrence same the amounted while to to to interest debt year million expense cash due compared $XX $XX million total XXXX in up from Tribune. expense fund million with the the $XX million, period

cash to synergies in and primarily consensus as executed free expectations second in and of TV and reflect growth $XXX flow EBITDA million approximately pre-transaction and as realized related Food -- free million expenses XX% distributions of Adjusted ownership million well reflect of equity exceeded XXXX. the of distribution the million, related broadcast from agreement quarter our cash cash $XXX First EBITDA adjusted investments realization half Network. of $XXX flow $XXX in all flow renewals

Food received a As distributions on basis during a year. TV large we quarter the quarterly with reminder, of payment first each recorded from cash the

For million the quarter network of second XXXX, distribution. $XX approximately Food anticipate we TV recording in

million our anticipated which will savings Nexstar quarter in the approximately commercial the offset initiatives operating advertising $XX and late revenue, of XXXX. to of in impact cost-cutting of first corporate quarter second COVID-XX result of ahead on implemented Looking range a in the expense

approximately cash, approximately million recurring meet corporate $XX.X project corporate we of the stock $XX Noncash is comp decline and million guidance expenses of year. our for $XX.X transaction of remainder expenses during the for quarter year.\\ and million exclusive overhead be be and million quarter, million to $XXX the comp for for projected approximately Transaction second year. overhead second the will quarter the the approximately and be easily run will the For $X we'll to rate

Second below be estimated are operating cash $XX and in come year cash the the $XX between $XXX taxes will million million taxes million estimated. for and well previously quarter operating to

CapEx $XXX launch Second proceeding to And come quarter of still in year and million should mentioned, the Primetime we're our National Nation. million. summer approximately approximately investment Newscast the budgeting America's Perry at $XX News for XXXX WGN as with related

timing Additionally, the we a to financial prioritized environment flexibility maximum capital maintain for current can CapEx quarters. have in certain of the number expenditures of meaning be delayed

Finally $XXX interest $XX less to expense reflecting decline expense year, full for approximately less and to we million than substantially interest the of -- than rates. million XXX expect guidance the the savings LIBOR substantially $XXX previous quarter the in for approximately related cash million Nexstar's and second

quarter first $X.X $XXX two one XX/XX/XX. maturity one and balance Net to And lien $X.X at we balance billion a Perry Turning with approximately compared $X.X series with X/XX/XXXX in and $XXX mentioned a outstanding XXXX of approximately -- debt approximately maturity X.XXX% term consisted $X.XXX of approximately amounted at and $X.X debt end. term loans before, of billion. cash sheet. of million was healthy as to billion of million senior billion to sub-debt at the XXXX a billion Nexstar's had

actions lowering immediate million to covenant at business below operate the first our current well at of to this in adopt long-term March, In $XXX X.XX of With preserve times. liquidity return lien quarter for net we in in X/XX/XX to to the company towards ratio from as the position which environment year-end and our allocated debt X.XX X.XX order the first is took best first covenant regard, in our operations the Nexstar success operations. XXXX onset funds reduction to normalized coronavirus in from and lien investments Nexstar

our As as lien net a lien a of maximum reminder $XXX -- to first reminder cash limits a million. covenant our netting first

net total year-end to quarter compared leverage XXXX. X.XX was X.XX Our at at end

the Nexstar's covenant X.XXx. As only first debt a is aforementioned is lien which our reminder, covenant

suspended to we reduction strong repurchase $XXX extent common activity, to the our A during In outbreak cash first the Nexstar $XX.X stock, additional million at COVID-XX allocated has prioritize quarter leverage shares upon aforementioned Immediately a and the share million the $XX.X short under count quarter were in dividend million seeing just order access shares our balance coming in retention. cash $XXX towards March, sheet addition reducing outstanding an anticipated of revolving with facility. challenges cash X/XX of at opportunistically payments including basic purchases months, million of to Class our stock in another one Nexstar million credit to in XX.X to Despite million end. the

XXXX, prior us completed to are our And the nearest-term nearest X.XXX% expensive maturities in notes offering the XXXX term million XXXX, senior of we in of maturities bond enabled of of unsecured most which as debt well as the fourth XXXX. pieces to maturity. addition, retire our the In the quarter due $XXX

by levels XXXX. our in coronavirus the visibility year-over-year a continued revenue do have to we and in excellent expect over we growth what the Looking spending XX% upcoming annual substantial which presidential ahead with double-digit materially elections, to impacted be revenue of not on many to expect related be distribution

and XXXX. our be in cash to significant capacity additional quarter flow free under expect strong we enjoy made cash plan in progress has such, already with Nexstar we position reduction As of revolver. leverage our positive every a

approximately to quarter second prioritization operating us -- interest expenditure reduction rates capital in the addition will our savings expected well million in favorable expense will quarters. coming related expense and in In our the LIBOR $XX serve allow

in times liquidity ability a As and do and debt our challenging through year. the service as liquidity we to covenant our move position anticipate issues not our these or through confident we're result,

times summary, onset reaching are committed revised the our total the generating flow payments, XXXX. leverage realization synergy four of confident unprecedented to allocating for of dividend by cash reducing and continuing target XX/XX towards addition vast remain our our with the slightly net of integration, plans to and in challenges In the reduction leverage majority In we are free to the results. range despite operation coronavirus, our

structure our the ability access – from addition capital Our of service cost maturity to a local great leverage local to to and in never advertisers our national shape capital and been is address communities in stronger. and has

in disciplines growth as driven well these areas results. of and have consistency visibility Our significant as

remarks we transaction call. pandemic. withdrawn of the cash before other this the at remain value on ability While concludes some I'll Tribune financial for the of the our And billion turn of long-term review closing over annual now in side That on it guidance back Q&A. forma to Perry for $X.XXX pro deliver flow for we deliver confident free have the to XXXX/XXXX our time, to –

Perry Sook

you support storm value Throughout each recession sustain and XX very times followed. employees, and always and employees local stronger our the of communities burst the and returns and over we Tom. case, more years weathered these Nexstar much, XXXX – worked Nexstar's management financial team, of would which of dot-com we today years than XX businesses and crisis company, came it record have that been more business as our side other Thank better business board than our in we this. to each long-term operate. support is shareholders outsized been this In deliver approach our on ever to out before. public In the to the to our has creation equipped the of always the X/XX, and our a important and has

history become doubt our pandemic no will books, our to address all in that of a remains As we a chapter the unwavering. constituents commitment

we've that the by fact outbreak, endured strength and upon scales model. us I our Nexstar's we of the the the challenges resilience comments set remain diversified and today COVID-XX in reinforce confident While business hope

focus decade Our over last revenue new business necessary is well States. steps now a XX us create nearly recession candidates as the the platform XX serving because in regional advertisers every ago leading is or less our for impacted as looking than political took during it contributing our sources. to we in was significant years And national to the the United expanding reach scale local as demographic some

Our leverage coming down. and is very manageable

Nexstar us positive great remain continuing cash combined pay Board of intend our throughout our XXXX. long-term operating quarterly our joining free will and We strategies your near-term on support in liquidity focus to to dividend. we creation. you integration today. us And value reporting record interest overcome extend and with continued time-proven continued and Our our accomplishments growth shareholder on This company, and to Management the your is challenges for our and team, the the enable Nation, for look flow of entire thank while forward to behalf

open to areas interests. the to Operator? of Q&A specific call let's address your Now

Operator

Instructions] We'll today Kurnos Dan Company. Benchmark from hear first with [Operator

Dan Kurnos

Great. morning. Thanks. Good

thought views you outweighs declines. know don't near-term in Obviously, But Or about that I if choppiness? if just high get your Tom our near-term bled you know trying back. if to believe mentioned your just crushed of it had net Or guys talked of like You I street remarks any in guys kind noise a around they'll that just if sense retrans kind there there? I'm confidence then kind carriage XXXX? AT&T come I retrans – anything there? from Perry was feels just that number. of you'd pushout mentioned sub into some of there estimate potential expectations you upside was here. some any And think prepared on

Perry Sook

which Zimmer all our that declines of this the develop in that that as in sub as our we reported sub been less and internal projects is produced have just Well, model can declines her have tell sure. Listen go guidance the expert attrition Dana models you. model. sub and all give you a team how we than assumptions I we year far to

So it say one would will sub few is months. and since time economic view one convenient recessions would to the an has schools and commitment are for is because that But the expenses. internet tell. may the MVPDs bills, next that unable the sneaking has previous say however stay kind There on not we look cheapest who people people be And that in I made think in things up are been have folks the here. least that at to their disconnects of cable not two time people But like think will to suffer I is well sub will of the pay anybody churn But our as a video sub there is bundle to no and navigation – cut been declines seen have movies in long-term – entertainment as pretty factored are what that obviously go. other last home is, apart, the – non-payment watch is that bundle a that some because to but television. providing yet I

where Our a have And saw non-payments I over – viewership that prioritizing report cable disconnects that. would been of yesterday, people other disconnect certainly sustain made. were because utilities for no

will what our we are the we'll as time. models that. That a real, AT&T against So I far over any quarter. the the for year, quarter solid numbers period don't manifest year. are no from consistent zero that projected the are to happen numbers first fourth no, we in what throughout But, significant up itself the we of with in pushed that and where continue and have effect numbers of history we There think this expect real was to to will we expect think quarter forward, variance as third be looking think

Tom Carter

the X% budget quarter in any our or there say I if would by Dan, was we beat first – so.

that's – on million call it million So fee. a distribution $XXX $X around

truing just was Tribune cetera. subscriber that numbers of up et with Some

bit So – obviously, mentioned, every a not see quarter. as you attribute Perry attrition be will slight little But of but we may a performance there a over there lot.

QX, So a see nominal. and year. in confident the between attrition some the of the end at fact numbers and in we're you'll pretty the in our the QX to especially see very were light continue But of growth repricings QX strong retrans through that

Perry Sook

MVPD a with not insignificant are those we We in with did significant have and a very QX happen pricing results. pleased

the beat on goes Dan. So

Dan Kurnos

prefer inform come about of having TV just to to you core give once conversations Super out your budgets' than maybe sense this? and optimistic with this to pacings we shifts just advertisers sure, or you're nothing talk there's helpful. but kind Perry And get then, your you'd of we I'm of on if stronger us more could out

Perry Sook

a than after Dallas, line Even on, hope different sit Texas because little the perspective opening. I going going that here two be in probably on are the here have in we to of one folks first and sitting in what's Well, months… northeast is in to Sure. barber businesses my on open Friday,

Dan Kurnos

for a to have to go anymore. Georgia haircut don't You

Perry Sook

I That's the exactly will right. QX view. it our worst in be of mean, But

of significantly we models And of is running under can those quarter. happen, is to the is a in recession in We case, expect -- anywhere this dent say, the door, worst And COVID-led have what than every all close remain in one it's a internally. not which base vehicle. and scenarios, the put going two totaling we One case worse but to to I profitable come big as that.

We will manage through it.

a significantly that's third than for but was core we've some canceled QX also it QX increased of small quarter budgets. in out folks pacing sample and into had advertising that better cases a with Our again, revenue number and QX. pushed have of size, But

projections all we chatter if better kind sobering are not. I but have line with operators braced of in other core, think also prepared be will heard it's and we're think made QX we are that, what these from pretty anecdotes, you've and than a on of people for Now but QX

Tom Carter

Nexstar's saw do end in We markets. way as we say, Texas this participate we and the pacings general given Ohio way, would in And April. the I a QX, obviously of meaningful better well. also in meaningful as of the through Florida a we see has the quarter progress And of some we just lot than towards to -- some footprint, in of breadth those; reopening a with of

I So better entered than enter -- pacing QX. exit I'm in QX position we'll a think we we'll sorry

Dan Kurnos

Thanks Got super it. very color is really guys. much. helpful That

Operator

next to We'll Research. John Wolfe move with Janedis

John Janedis

Thanks.

know Dan, outlook it it's extent what a not said I a put of and to that the shape Does And Understanding initial impacted to to guidance. the you in, I pulled timing feel political, but changed assumption leverage You getting your has money you around year-end. much your four at the expectations guess, you revenue reasonably then initiatives? COVID expense times all? to understanding about year factor has on good net when as or guys maybe to still for year, at or And talked year case impact, going non-advertising you your mean did in good EBITDA base the of work? of follow-up that be a

Perry Sook

I'll speak question the political to first.

political. out-performance related Bloomberg's expect we process, than the from QX in participation primarily necessarily With the would not to Mayor better that QX presidential QX in did be

from our revenue to played. guidance will the the think of come our and April Day performance year. expectations our Now don't on by with have do and will projections we and the it game seen any and election, accumulate July, Labor primaries XX% shift or the impact any that movement we but the change the ultimately a of there, XXXX. political June is is so not there'll think and September we've where our revenue into May between money is QX end -- of general it's be the in of QX will money political for

Tom Carter

it the this depending and to impact model how with works, And to with rollout on EBITDA. expect impact we of and which will QX the EBITDA and QX our it obviously, regard budget, potentially and QX affect

offset. for free to than EBITDA. advertising we have some the of difference cash you free core but the and Revenue substantially cash of down, revenue. reducing cash flow, experience levers revenue between do pull and market's be obviously, our to will subject a some were be is down -- taxes really So less, and the But but EBITDA obviously to We that more EBITDA EBITDA, not quite income going because between to offset flow will look are be can a between honestly year, EBITDA and regard of and at to degree, it because degree. with our we large because if reduced EBITDA operating and to

be manage. will to percent expense ability Capital interest rates be particularly manage Our of down. by LIBOR expenditures because reduced down and -- be will rates interest -- XX-plus to actively our

cash about affected EBITDA but than lot expectations flow key and not a is that's between amount by and three of know your free can in management, positively free be the we our in all don't think of kind John, variance EBITDA. cash areas that flow that's less I if responsive variance so and question So to it. or of our amount way the the

John Janedis

it. do will That Tom. Yes. Thanks

Operator

Stephens. move We'll on Evans Kyle with to

Kyle Evans

Thanks.

about just for rate XX% level double-digit you the in in that we net the high think growth referenced that renewed how at retrans the guys accelerators versus hike one about release. you maybe You Could should a years two talk three? year year and on

Perry Sook

and that's I QX I Well, -- out why between XX%. pointed growth of the QX

our all may the XX% may an was XX%. of remaining So -- those XX% growth had escalator of not at repriced, year-end. subscribers or XX%

generally, between it on arithmetic and you you a whole would would there on portfolio QX. can QX can but the say, -- an the value try in increase saw the that as I assign be somewhere there's where we a the and XX%, equation of XX% So above

Kyle Evans

off sizable how are does probably of with it. I XQ blackouts you've a in kind gotten guess Got And theory mentioned, happy on saying that. the you and shape renewal game table the Perry done that you're renewing? with

Tom Carter

And doesn't deal don't really. parties I mean, have you obviously, in continuing both to It parties are negotiate a until faith. good agree.

it gets be business approximate have So, renewals mean I subscriber from XX% this don't expect And our will repriced year base any be continue other of significant QX. point think just real we forward that of this the that as to effect. until usual. we any we will don't

Kyle Evans

curiosity? XQ XX% in that Great. How of of out much is

Perry Sook

here. to you going playbook not We're give the

Tom Carter

say would a of large the I XX%. percentage

Perry Sook

XXXX, got to of piece be is after biggest it in something imagination. it's The the but

Kyle Evans

and you next about in and core the All plan non-political and and one. balance those ad high spots level how sell-through just cancellations right. people talk keeping those to my due Could to Well, with go rates between lower two? interplay you I'll lowering

Perry Sook

it's mean have -- I a inventory. sure. Well level we fixed of

less stay So, I'd need I to rates we're be And with but to love some if help. there's working lower. obviously, on air say the will demand advertisers

need do when some things. best we'll our We're business some at with other add -- our we're we'll billboards, partners So, partners. maybe we're -- we

generated to obviously But have to opportunity begin to good very some pricing And It's that. you been And available tell News we're use so more I will that is we Nation promote difficult -- promote to we inventory And working that lot we other some no and WGN January with markets supply of with things. than demand. but that. no it's inventory or there them. do for to with many to because at America's it's Obviously, -- canceled March now later a markets pushed the canceled have or March that political in more of a obviously got were peaks. were out out evaporated pushed things madness or revenue all that February, canceled. in price in many the markets primaries in not year

But the repair, biggest probably if Not year-over-year this so attorneys, travel is we probably our life we categories, now Pennsylvania open of intuitive. And going dealerships restaurants, what's terms look stores, life category in and declines Ohio you home grocery auto, way in stores, packaged then saw of people's increases retail. and surprisingly Texas. goods. and are fairly And intuitive certain in at of when and that's showing way But of the their and leisure, and drug think were on.

and -- here about and And daily are read rebound the to of [Technical we'll if advantage those NADA popular of see so begin posts you're now shortage we trucks offers shortage expect hearing People XX-month taking that financing. those you X% categories of Difficulty]

Operator

still you us? hear can Gentlemen

Kyle Evans

hear you. I can

Operator

Okay everyone speaker's standby our continue. reestablish please please standby. And we line. And gentlemen as phone

Joe Jaffoni

where in Sorry. about we sure answer We technical difficulties. Not cut sorry off. some Kyle, got that. had Perry's

Kyle Evans

models starting at are short. come truck We lost up certain you to

Perry Sook

Okay. true. Well, that's certainly

in end will right SUV in the ebb there demand is comment that supply models is demand and we So, the But now. even particularly shortages popular out. and flow after see the came of probably and causing that truck shortly that some and models, I guess,

Kyle Evans

Great. Thank you.

Operator

Jim We'll move Barrington on to Research. Goss with

Jim Goss

year? couple more a virtual if you campaigns regarding be will are items. hurt A One benefit just Hi. or this nit little spending, of political the

Perry Sook

the be some comfortable when going fill congregating. from to communication of expect we've maybe not through auditoriums is more advertising rallies, money you're And balance you're people money to on feel at holding the not spend that that of campaign I heard agencies means the spending would this until stadiums going stages late political primary you're that television. the if least and to on

would think to So, what on I it couldn't balance I would be though. positive. extent Jim, quantify net a

Jim Goss

a sort Yes, ad whether of will I -- if old political also into on laws at time party wonder equal national any play and a of come versus things about the buy buy they least another? one level

Perry Sook

equal Hard in do. to There's no have it into say. I we on air. play We terms time usually time obligation afford to mean time. certainly comes is equal and usually of to -- candidate's buy it

where we We senators into and move of will those basis -- and has particularly in on a governors in adept as in things. Illinois Tennessee, like to those entire continue Pennsylvania. the organizing a to do kinds state -- company political virtually the like statewide with markets we'll season continue at focus where debates become presence we representatives there in The Texas, the particularly turns have

as and well. in to the vigorous will continue us see participate hope be be you'll So, debate that and the spending will we

Jim Goss

wonder develop – I What news Is in? point advertisers? color target does if good will area. pure have and fit overlay a other or it WGNA if do potential you Where on it could sources blend political of one target little are local a a then national provide it the expansion maybe And following? you Okay. view more audience what you envisioning? you of if like, versus

Perry Sook

fact you time. that to the million news across according there's WGN real hard again homes. start distributed entertainment or or prime hopefully it's once if And prime entity XX with shows Nielsen approximately either programming part, sports the opinion at Sure. day America no look is the Well, we time in

we've with team. teams. X, And announced our and so live that head. be September anchor hours is negotiations it will hired anchor advertisers, to originate unabated launch. programming goes news. which hired of some from. on out demographic XXXX, virtual presentations that XX main people XXX trying not would be was weekend the we'll WGN to direction And reach. because hiring to never original to three certain approximately of Chicago, We We've talk with in excited going We've will about And our of date this. our very broadcast in that they're the launch we're and national We're of we're the probably XXX had upfront where the reruns Construction America,

that, and the into a news wants my timing to so backbone we're the rhetoricians can be we the make And The we XXX, country that's you that hiring they'll review creep serious what will It words have will barter we're using reporting absent the just be from news, and plus people this and better. will no tell people in for try do. serve. we're to unconscious couldn't the of I going their bias. panel Chicago. straight this And hard certain we our and may be bias that So decisions XXX% investor's use to broadcast be all of of our X,XXX said own that news for opinion XXX journalists hire based about

absent correspondence. and recognize will road. all from finalizing are working would promotion and we're names network-quality well There technical but you of it, bias And but local We as hired hopefully, aspects plan down based that today, Chicago. be no recognize as the you through of have it the our names

the the from strongest. which the be and center So heartland the will where distribution heartland, it this is calling directed and news is WGNA's we're for of primarily

Jim Goss

much. Thank right. All very you

Perry Sook

bet. You

Operator

from Partners, hear Huber Research from Huber. And Craig we'll

Craig Huber

an Thank subs benefit? the including they you. basis X% say X% retrans could. to year-over-year I the were questions OTT – A quarter This organic in down few if your on

Tom Carter

We're that down at the range. bottom end of

Perry Sook

Yeah.

Craig Huber

then the just outlook could? April much full can – is your people were ad month give I how Thank organic but for of asked the get on what's this I a before, And your your that. mean maybe sense sense Okay. core was revenues And for quarter what TV you can for going you there? us a also so down? you out if know,

Tom Carter

other say of regard specifics our different – some – We're seeing materially is they in the to not the experience revenue with some in are core not would to other our than peers quarter quarter. saw talking or our decline regard of but early about and this with obviously I that

Craig Huber

like does down When say that that Is XX%, that XX%? referencing? you you're say what mean

Perry Sook

cash give which detail. but we're to and of the We detail. to just advertising that that we've level core down We of to guidance flow level withdrawn don't guidance give performance, going not give because of guidance free just

Craig Huber

No. for to you when peers I for but the – I'm sorry, but is month April down referenced that just your please. understand. of XX% number XX%, April for referencing the peers just you're say your

Perry Sook

-- read. But you is That on what

Tom Carter

But number that's heard before. the I've Yes. that

Perry Sook

Yeah.

Craig Huber

can Okay. the curious if I news you out clarity households you to are watching there. you mean could there And more best you then the the lot the be a for can quantify stuff? I'd Perry, hold back obviously hear end this? Thank quantify news ratings and months? how that of of much mean been on up your And but mean, you help I tough, - of have how much I over know to the couple last here I it's do

Perry Sook

Sure. morning news – news mid-teens would Alabama average It look parts, say If in would with morning affiliate and up. say, up our we Dothan ABC is we early I in I KTLA but approximately depends on the day average the XX% at is across this board. but

more locally. that is habits evening there hopeful – some than in going seeing the the markets that, a are now. as some those actually be we're increase levels have of value audiences what's realizing and will news, early Where and XX% will tell, late increases. on in than zero that. been numbers new And those biggest think than this But I high product that something of and as evening time much it is that are less performing news the does that keep them think number forming we're the at we we're retain. I Some connected XXX% greater And with people how

Craig Huber

permanent a of of we about headcount I should Can quarter furloughs help in reductions? use questions just you cost here Then how think couple if versus the us second your could. –

Tom Carter

None.

Craig Huber

side? either On

Tom Carter

On side. either

Craig Huber

last And million just interesting. cost referenced for Okay. quarter. the That's that $XX second you of savings question. then The my

that's clear versus to being you that be true? of take be would already quarter to all number and your versus that you Just system anything and from it's base. cost were able thinking acquisition, beyond also the equal a out Tribune the first else above Is

Tom Carter

our to to they as addition in revenue and relative transaction that of and Tribune part budget. beyond, specifically discretionary anticipated. in the above It before It were I related really is reduction mentioned and are expense is to synergies the Tribune expense the

Craig Huber

Thank Okay. you guys.

Operator

from Deutsche We'll Watts hear next Aaron Bank. with

Aaron Watts

this for me here. Hi, sharper that still on the getting hair us. Perry, looking all time than I'm the from guys. Thanks tighter after away is barber sure even XX.X% and of

I'm worried there. So not

Perry Sook

support. Well, for thank your you

Aaron Watts

maybe I'm in SMBs you curious from more ad is also dealerships pie? important of you're maybe time? permanent how open, advertising your overall from that your somewhere between? of SMBs that Encouraging as seeing temporary broadly Or auto pullback is tilt what markets, feeling a to maybe group in nature hear the some there. this the in And to in of advertisers that are more but smaller hearing you're

Perry Sook

be And not close, advertising tell a visiting -- month percentage all to businesses be said anyway business What brink, advertising. about much Businesses but we've that presidents of marginal give the all people market hard in sitting weren't just that. you -- just this your it's talking including if saw and an listen to I and that was and And every and first with open I of vice And and about really asking way. as an that that one XXX around I ways not some that no your literally was been so might time every competitors up of that with your to and ago you Well general note but been of your order maybe our tag. the grocery down stores send I vertical in but of we our gain mandated their in to horn. in this and are don't at and segment a that drugstores managers. that. every kind we were every begin just we answer were said in for obviously come on the advertising to reopen talk share one company take order pivoting probably a Sure. we've accounts strong for one-size-fits-all going advertisers there's to uptick reopening should thanking to from month responders would ask doing the ideas and

COO Broadcast top the Our not advertisers the are vice phone as the so a and how call divided And regional as can President Division is in the how presidents we doing it's you getting of but and have well everyone XXX up company. much ahead we are a you help reopen do help way we as of the rebound you things can strong some have that here what your as you to curve can space gain market in we ideas you share. and bring and what have be ideas

be the there how going by appear spending recession. salon hair these business in the may forward. none -- businesses markets location not lot agent than but But the there been the helpful on would of some this; of they -- could the has I So we restaurant group and people beginning peer spending doing or and that's And and it's fewer appreciate recession I a one they true were location and will us throw be anyway. say be focus again, can that created is one to been every have an a no with in there'll our in towel. time But tell pre time question goodwill b that their feedback if we change and of you to the a,

the they're depends but not it piece on if level then spending of at make a so -- on you they're our not up if they're obviously to money And probably they how advertising living define small water right begin SMBs, with.

Aaron Watts

All right. helpful Thank stay context. well. That's and you

Perry Sook

you. Thank

You too.

Operator

with on B. move Silver Zach Riley. to We'll

Zach Silver

great. Okay, Thanks the for question. taking

your economic And depressed just around year all first allocation. the The levels is a with of clearly But priority I is capital this stock leverage understand reduction uncertainty. is at here. that obviously us on what you color -- the repurchases would the visibility wondering to share gives what little give if in bit past? a you you've you give the of could resume opportunistic done

Tom Carter

market don't from But us about would the over We repurchases, of so. the economy see see million to need being buyback. core I on XX the doing I best visibility stock days $XX I active that left have we the $XX say revenue stock forward. authorization a next in do going and revenues back on now, over for effect under put -- up And revisit balance higher -- the right for QX. at its of authorization -- the suspended that necessarily that but is opening of we million anything into the advertising think repurchase don't I depending or that perspective to our could next potentially way point. the XX us Board

Zach Silver

Got it. I And one could. then more if

Just this on there $XX that processes And employees working any to do beyond guys digitization non-programming from that from $XX plays contemplating long-term could this? you structural more opportunities are your case efficiencies with be of guess then tailwinds longer-term OpEx out to side, flex structure in cost you think in more perhaps, quarter are there the bare home million? the I the million in second the

Tom Carter

I of hit into are available to areas would point and meat into at that it the We to takeouts and business less more more our there say but starts think expense the more? fatty us? we need manage dynamically discretionary it's of look Yes. If are We the part we I the kind -- to don't that. analogy. see see make the in structure, just of the there -- our current environment don't do Yes.

fording the is, it I just how how don't deep river think know we how we if a you're river wide is. know --

our core and the manage our pace of pace dynamically the of on potential we depending recovery so can business. the And

Perry Sook

I'll just add to that.

-- Tom there's news flexes reduction -- none can reductions you as that pull. quarter. in to there's anybody. this We that obviously based travel. third I And a affect have in a revenue imagine revenue, be said, And reduction will flex in quarter. commission, dynamically if is mean levers to enacted there's the how should reduction in cost of we certain third we have on the number will But

we front on need have anybody left essential -- we which the We've intact asked them furloughs layoffs. our we have because or in but serving services workforce take providing had and we lines not So any our communities the do. and to

play call, businesses on they robust year we've than even New see case-by-case for goes are York now Metro office the revisit so flexibilities basis. As good a our New here, April, senior way the with on City got I do to we've deal area by are the unless we're to that of by any to states different last governor need which issues they And York our But raised if dealing may see a and not reason. is keep the we the certainly, -- and end monthly it People will rest shelter-in-place. and making on at or I very say our employed open. point Probably compromised that happens participate going and managers or we in to this for we're that everything do allowances in with corporate rules of that be said child but stay-at-home care this have Upstate the open have York, have care the already for country the as recovery different are of you'll is order Listen, place New immunities to happening. does. got that. the wide And, never

So, I will the business are reopening we're their partners and grow forward. to seeing obviously of that want think, that that businesses what is, be of beginning going economies open our

capital there, prepared but us quarters. catch are base not surprise And have to And allocation our of business we and scenarios fourth happen so, side business managing as expect earlier if behind two we've different the worst-case on the I by will the is substantially will that. says, second, running. -- it manage the scenario case, got the other and that to over we is we'll to said and next the Tom what that pull revenue. in then we And levers actively as third us. based available the our a we And call, our is One cost we will worst-case

Zack Silver

Thanks, Thanks, Got Tom. it. Perry. Very helpful.

Operator

Steven We'll Fargo. Cahall now with hear Wells from

Steven Cahall

EBITDA and bit Thanks. cash Maybe, talked little about you Tom, flow. levers the first, free a between

cash You've interest tax cash on and savings done a lot savings.

So think lost if we about there for that impact flow the what cash in cash terms about a is to way free just of is us think or dollar an of to operating flow? advertising, easy

Tom Carter

No, actively of something it sales expense of that is sales direct and is managed some requires et and opposed it some discretionary. like That, because is and commissions more to cetera, as structural expense. again, just

of So to XX% of on of is it's terms sales. and the in say. we're XX% hard somewhere order direct the to say, at I kind rest looking probably would discretionary

Steven Cahall

when for then, we as they about I you've the how And or some Okay. as bit component guidance Network well? cash year, from stake about the just lower a generation advertising do we leverage EBITDA that? that assumed face imagine think the think a Food your little challenges since from of

Tom Carter

I for gave quarter. guidance mind But keep second Yes. in that,

those of two from XX% that add the XXXX. you be together if So approximate the flow cash to Network realized will in Food

has score been that the part. put for most already on So board, the

Steven Cahall

week buying game Could talked in maybe about think terms to of to Trump story Okay, be of of starting I roll at ad that was of of bit campaign, out then what for a little Labor already about played might interest political wads ads. you you really seeing is period? to a last And there sort that's expressions a couple the speak all November. you great. a from Day how And

or time know the start about on The expressions still sort if changed, don't already commentary that seen if the Thank already on of they've you've so level you're that restrategizing done based experiencing first the post-COVID. already have for I period? things of demand way that to democratic a of they're side, you. wave just

Perry Sook

through market, grid reservations where moved. market decision want heats advertisers, the up or really they options of the time stay current the pricing has at because as have That an We for Election as and it whether move political kind to Day. to all becomes -- of people need make way up to to

substantially So will the the obviously of And, bit it's that year. presidential ahead affect would has a election meaningful. what of interesting flux, money But, QX. between come for caveat would not Election I as will expect will in be it out not is our Day again, that demand is, current QX. half and the we been. internal assumptions the any Labor to Day and in got atypical QX but to don't primaries again, year. that, that, say were expectations we because a always And our if moved in But, expect we anything, some revenue political is

Operator

Anything further, Steven?

Steven Cahall

Super you. helpful. Thank

Operator

things Perry I'd back you to like Thank turn you. And remarks. for time this at closing to

Perry Sook

again and important you. joining August all We very the We our forward and call us much us. We'll to year. in QX you joining a can remainder of our early for for time was report it on everyone on for the as it you longer talk soon. look And as gathering Thank again, again to increased report spend our Thanks, usual. visibility than today. of we thoughts Thank thought to much. with share

Operator

joining Again, And thank today's conclude that does us today. for conference. you

Nexstar Media (NXST) 7 May 202020 Q1 Earnings call transcript