LIN TV Corp. (NYSE: TVL) today reported net income of $3.5 million
for the second quarter ended June 30, 2007, compared to a net loss
of $244.4 million for the same period in 2006. The increase in net
income was largely due to two charges against second quarter 2006
earnings that did not recur in 2007: a $333.6 million impairment
charge for intangible assets and broadcast licenses; and a $6.9
million severance charge related to the retirement of the Company�s
former CEO. Excluding the 2006 impairment and severance charges,
second quarter 2007 operating income decreased by 3% to $23.3
million, due primarily to the expected impact of lower political
advertising in the current off-election year. The second quarter
2007 operating summary is as follows: Three months ended June 30, �
Increase / (Decrease) 2007 � � 2006 � � � � Net revenues $ 103,278
$ 102,709 $ 569 1 % Total operating costs and expenses � 79,975 � �
419,118 � � (339,143 ) -81 % Operating income (loss) 23,303
(316,409 ) 339,712 107 % � Income (loss) from continuing
operations, net of provision for (benefit from) income taxes 3,933
(244,869 ) 248,802 102 % � Income (loss) from discontinued
operations, net of provision for (benefit from) income taxes - 512
(512 ) N/M � Loss (gain) from the sale of discontinued operations,
net of provision for (benefit from) income taxes � (419 ) � - � �
(419 ) N/A � Net income (loss) $ 3,514 � $ (244,357 ) $ 247,871 �
101 % � Basic and diluted income (loss) per share $ 0.07 $ (4.87 )
$ 4.94 N/M �We are pleased with our second quarter 2007 operating
results and the continued execution of our strategy by our station
management teams, particularly in light of the current cyclical
challenges facing the TV industry,� said Vincent L. Sadusky,
president and chief executive officer of LIN TV. �Our ability to
develop multi-platform local marketing programs and reduce same
station operating costs have helped offset declines in political
and national automotive advertising.� "Underscoring our focus on
localism, our station brands and news programs once again performed
well in the second quarter, with many of our stations dominating
the May 2007 Nielsen ratings in their local markets, as well as
significantly advancing our local website businesses,� added
Sadusky. �Our key online audience metrics continue to grow at a
rapid pace and our Company is well-positioned to capitalize on the
growing digital media and interactive businesses.� Second Quarter
2007 Compared to 2006 Net revenues for the three months ended June
30, 2007 increased 1% to $103.3 million, compared to $102.7 million
for the same period in 2006. The increase was primarily due to the
acquisition of KASA-TV, the Company�s FOX affiliate in Albuquerque,
substantial growth in digital revenues and growth in the Company�s
local advertising market shares, which were offset in part by
decreases in political and national advertising for the quarter.
The Company�s national advertising decline was primarily due to
continued softness in the Automotive category, which decreased by
7% on a gross time sales basis compared to the second quarter of
2006. Digital revenues, which include Internet-only and
retransmission consent fees, were $3.4 million for the second
quarter of 2007, representing an increase of 102% versus the second
quarter of 2006. On a pro-forma or same-station basis, as if the
KASA-TV acquisition had occurred at January 1, 2006, net revenues
decreased by $3.0 million, or 3%, for the second quarter of 2007
compared to the second quarter of 2006. This pro forma decrease was
again primarily driven by the anticipated impact of lower political
revenues in the off-election year, which were down by approximately
$3.6 million on a net revenue basis in the second quarter of 2007.
Total operating expenses for the three months ended June 30, 2007
decreased 81% to $80.0 million, compared to $419.1 million for the
same period in 2006. The decrease was primarily due to costs that
occurred in the second quarter of 2006 that did not recur in 2007,
which included a $333.6 million impairment charge for intangible
assets and broadcast licenses and a $6.9 million severance charge
relating to the retirement of the Company�s former CEO. These
non-recurring costs were offset somewhat by increased operating
expenses for the three months ended June 30, 2007 due to the
KASA-TV acquisition in February 2007. On a pro-forma or
same-station basis, as if the KASA-TV acquisition had occurred on
January 1, 2006, and excluding the $333.6 million impairment and
the $6.9 million severance charges in the second quarter of 2006,
total operating expenses decreased by $1.8 million or 2% for the
second quarter of 2007 compared to the prior year period. This pro
forma decrease was primarily due to a number of discretionary cost
savings, including lower personnel, promotion and SG&A expenses
plus reduced depreciation and amortization expense. Operating
income for the three months ended June 30, 2007 was $23.3 million
compared to an operating loss of $316.4 million for the same period
in 2006. Net income for the three months ended June 30, 2007 was
$3.5 million compared to a net loss of $244.4 million for the same
period last year. On a pro-forma or same-station basis, as if the
KASA-TV acquisition had occurred on January 1, 2006, and excluding
the $333.6 million impairment and the $6.9 million severance
charges in the second quarter of 2006, operating income decreased
by $1.2 million or 5%. Diluted earnings per share for the second
quarter ended June 30, 2007 were $0.07, compared to a loss per
share of $4.87 for the same period in 2006. Operating Highlights TV
Station Ratings and Revenue According to Nielsen, most of the
Company�s CBS, NBC, ABC and FOX stations were once again ranked
number one for the adults aged 18-49 and the adults aged 25-54
categories. The Nielsen data also showed that the Company�s
stations outperform their national networks in the category of
�household share� on an average of 43%. The Company�s stations
ranked #1 or #2 in 82% of its markets, weekdays sign-on to
sign-off. WTNH-TV and WISH-TV were two out of only four local
stations in the country to receive George Foster Peabody Awards;
considered one of journalism�s most prestigious honors. Local
advertising revenues, excluding political advertising revenues,
increased by 3% in the second quarter of 2007 and 5% for the six
months ended June 30, 2007. The acquisition of KASA-TV and the
Company�s focus on integrated media and new business development
efforts at all of the Company�s stations contributed to these
results. On a pro forma basis, as if the KASA-TV acquisition had
occurred on January 1, 2006, local advertising revenues were flat
for the second quarter of 2007 versus the same period last year.
Local advertising revenues represented 65% of total advertising
revenues for the second quarter of 2007. National advertising
revenues, excluding political advertising revenues, decreased by 2%
for the second quarter of 2007. The decrease in national time sales
was due in large part to lower spending by automotive advertisers
compared to the same period last year. On a pro forma basis, as if
the KASA-TV acquisition had occurred on January 1, 2006, national
advertising revenues decreased by 5% for the second quarter of 2007
versus the same period last year. National advertising revenues
represented 34% of total advertising revenues for the second
quarter of 2007. The Company�s political advertising revenues were
$1.0 million for the second quarter of 2007, compared to $5.1
million in the same period last year. Political advertising
revenues represented 1% of total advertising revenues for the
second quarter of 2007. Interactive and Digital Initiatives
Internet-only revenues increased by 104% versus the second quarter
of 2006. The Company continues to focus on optimizing web site
traffic and revenues through growth initiatives that drive
increased unique visitors, page views, time spent and monetization
of ad units. The Company currently has 29 live websites and
launched or re-launched 18 new station websites in the second
quarter of 2007. Six new FOX interactive platforms were launched as
a complimentary brand extension at our FOX affiliate stations, and
the sites also included FOX-On-Demand Video players. Total page
views for the Company�s stations� websites were 98.2 million in the
second quarter of 2007, compared to 73.6 million in the second
quarter of 2006, representing a 33% increase. The Company
attributes this traffic growth to a number of factors and new
initiatives, but primarily to additional content, as well as its
stations� enhanced promotion of their local news, sports and
weather services on the web. During the second quarter of 2007 the
Company announced a new online video partnership with VMIX, an
interactive media, video hosting and social networking company.
VMIX will provide technology that will enable the Company to
showcase user-generated videos, photos, audio, blogs, ratings,
polls, and other community-driven content and features on its TV
station websites. The user-generated content sites will launch in
the third quarter of 2007. During the second quarter of 2007, the
Company reached agreements with several cable operators for the
retransmission services of its broadcast stations for both analog
and high-definition channels. The deals enable hundreds of
thousands of current and new viewers to watch award-winning news,
sports and entertainment programs in high-definition from the
Company�s affiliate stations. Key Balance Sheet and Cash Flow Items
Total debt outstanding on June 30, 2007 was $879.8 million, and
cash and cash equivalent balances at June 30, 2007 were $16.7
million. The Company�s revolving credit facility balance remained
at zero as of June 30, 2007 and there continues to be $275.0
million available for borrowing under that facility. Consolidated
leverage, as defined in the Company�s credit agreement, was
approximately 5.9x as of June 30, 2007, compared to 6.0x at
December 31, 2006. Other components of cash flow for the second
quarter of 2007 were capital expenditures of $3.2 million and
program payments of $7.1 million. Business Outlook Third Quarter
2007 Based on current sales order pacings and the anticipated
impact of lower political advertising in the current off-election
year, the Company expects that third quarter 2007 net revenues will
decrease in the range of 8% to 10% (or $8.5 million to $10.5
million) compared to reported net revenues of $103.7 million for
the third quarter of 2006. This decline is again primarily driven
by the expected impact of lower political revenues in the
off-election year, which are expected to decrease in the range of
$12.3 million to $12.7 million on a net revenue basis for the third
quarter of 2007. Due to current year cost saving programs and the
impact of prior year�s restructuring efficiencies, the Company
expects that its station direct operating and SG&A expenses,
excluding non-cash stock-based compensation expense, will decrease
in the range of 2% to 4% for third quarter 2007 compared to third
quarter 2006 actual expenses. 2007 Year Based on historical trends
and current economic and industry information, the Company now
anticipates that local TV advertising, excluding political
advertising, for the markets where it presently operates stations
(LIN Markets) will grow in the range of 1% to 3% for the full year
2007. The Company also now anticipates that national TV
advertising, excluding political advertising, for LIN Markets will
decline in the range of 7% to 9% for the full year 2007, primarily
due to lower Automotive category spending in the first half of the
year. Due to its strong station brands, news rankings and audience
ratings the Company anticipates that its station market shares of
the revenues described above will continue to be maintained at or
above the levels it has historically achieved in prior years. The
Company also anticipates that total full year 2007 political
advertising in LIN Markets, reflecting the normal cycle of
off-election years lacking significant national political spending,
will now be in the range of $14.0 to $18.0 million and that its
leading local news stations will continue to achieve their
consistent historical market shares of these revenues. In addition,
the Company anticipates that its digital revenues, which include
Internet-only advertising and retransmission consent fees, will be
in the range of $14.0 to $15.5 million for the 2007 year. However,
as the Company has stated previously, these revenues, particularly
for retransmission services, continue to be highly dependent on the
timing of completion of these agreements. Lastly, due to the
expected impact of cost savings programs and restructuring
efficiencies in the second half of the year, offset by investment
spending in new interactive and digital initiatives in the first
six months of 2007, station direct operating and SG&A expenses,
excluding non-cash stock-based compensation expense, are expected
to decrease in the range of 1.5% to 2.5% for the full year 2007
compared to full year 2006 actual expenses. As a result, the
Company�s current outlook for revenues, expenses and cash flow
items for the third quarter of 2007 and 2007 year are anticipated
to be in the following ranges: � Third Quarter 2007 2007 Year Net
advertising revenues $85.0 to $86.0 million $362.6 to $370.1
million Net digital revenues $4.1 to $4.6 million $14.0 to $15.5
million Network compensation $0.9 to $1.0 million $3.6 to $3.8
million Other revenue $0.9 to $1.1 million $3.8 to $4.0 million
Barter revenue $2.3 to $2.5 million $9.0 to $9.6 million Total net
revenues $93.2 to $95.2 million $393.0 to $403.0 million � � �
Direct operating and SG&A expenses(1) $56.9 to $58.7 million
$231.7 to $235.2 million Amortization of program rights $6.0 to
$6.5 million $24.0 to $26.0 million Cash payments for programming
$7.0 to $7.4 million $28.0 to $29.0 million Corporate expense(2)
$5.0 to $6.0 million $21.0 to $23.0 million Depreciation and
amortization of intangibles $7.8 to $8.4 million $33.0 to $37.0
million � � � Capital expenditures $7.0 to $8.0 million $24.0 to
$26.0 million Cash interest expense and principal amortization
$13.2 to 13.7 million $65.8 to $66.8 million Cash taxes $0.2 to
$0.3 million $0.6 to $0.9 million Effective tax rate 36.0% to 44.0%
36.0% to 44.0% Distributions from equity investments $0.6 to $1.0
million $3.0 to $3.8 million (1) Direct operating and SG&A
expenses include approximately $0.5 to $0.7 million for third
quarter 2007 and $2.0 to $2.5 million for full year 2007 of
non-cash stock-based compensation expense. (2) Corporate expense
includes approximately $0.8 million to $1.0 million for third
quarter 2007 and $3.4 to $3.9 million for full year 2007 of
non-cash stock-based compensation expense. LIN TV advises that all
of the information and factors described above are subject to risk
(see the �Forward Looking Statements� heading below) and could
therefore individually or collectively cause actual results to
differ materially from those projected above. Conference Call LIN
TV will hold a conference call to discuss its second quarter 2007
results today, Thursday, August 9, 2007, at 8:30 AM Eastern Time.
To participate in the call, please call 1-800-500-0177 (U.S.
callers) or 1-719-457-2679 (international callers) at least 10
minutes prior to the scheduled start of the call and reference
2647371. The call can also be accessed via the Investor Relations
section of the Company�s website at www.lintv.com (listen only).
Those who intend to participate in the conference call should
register at least ten minutes in advance to ensure access. For
those unavailable to participate in the live teleconference, a
replay can be accessed via the Investor Relations section of
www.lintv.com or by dialing 1-888-203-1112 and entering passcode:
2647371. The telephone replay will be available from 11:30 a.m.
(EST) on August 9, 2007 through midnight (EST) on August 17, 2007.
Access to Non-GAAP Performance Measures and Other Supplemental
Financial Data The Company reports and discusses its operating
results using financial measures consistent with generally accepted
accounting principles (GAAP) and believes this should be the
primary basis for evaluating its performance. Non-GAAP measures
such as Broadcast Cash Flow (BCF), Adjusted Earnings Before
Interest, Taxes, Depreciation and Amortization (EBITDA) and Free
Cash Flow (FCF) should not be viewed as alternatives or substitutes
for GAAP reporting. However, BCF, Adjusted EBITDA and FCF are
common supplemental measures of performance used by investors,
lenders, rating agencies and financial analysts. As a result, these
non-GAAP measures can provide certain additional insight about the
market value of the Company and its stations; the Company�s ability
to fund acquisitions, investments and working capital needs; the
Company�s ability to service its debt; the Company�s performance
versus other peer companies in its industry; and other operating
performance trends for its business. As a result, the Company makes
available reconciliations of its operating income (loss), a GAAP
reporting measure, to BCF, Adjusted EBITDA and FCF on the Company�s
website. In addition, the Company provides additional information
on the same website document for historical revenue by source, pro
forma income statement information and certain other components of
cash flow. Interested parties should go to http://www.lintv.com and
in the Investor Relations section, click on Financial Reports and
Releases and "Supplemental Financial Data." About LIN TV LIN TV
Corp. (NYSE: TVL) delivers quality television, digital media and
online news, community coverage and entertainment through 29 owned
and/or operated television stations and websites. The Company�s
reach includes 17 cities located primarily in the top 100 markets,
servicing 9% of U.S. television households. LIN TV has and
continues to identify and implement innovative business strategies,
including being an early adopter of digital television, in order to
provide superior viewing quality to our customers. Financial
information and overviews of our stations are available at
www.lintv.com. Forward-Looking Statements The information discussed
in this press release, particularly the section with the heading
Business Outlook includes forward-looking statements regarding
future operating results within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. The Company based these forward-looking statements on
its current assumptions, knowledge, estimates and projections about
factors that could affect its future operations. Although LIN TV
believes that its assumptions made in connection with the
forward-looking statements are reasonable, no assurances can be
given that those assumptions and expectations will prove to be
correct. Statements in this press release that are forward-looking
include, but are not limited to, statements regarding quarter and
full year station time sales order pacings; local, national and
political advertising growth; digital, network compensation, barter
and other revenue growth; direct operating, SG&A, barter,
amortization of program rights and corporate expense growth; and
cash programming, capital expenditures, cash interest expense and
principal amortization and cash tax payments. These forward-looking
statements are subject to various risks, uncertainties and
assumptions which may cause these expectations and assumptions not
to occur or to differ materially from those outcomes projected in
the forward-looking statements. Such risks and uncertainties
include, but are not limited to, the potential deterioration of
national and/or local economies; global or local events that could
disrupt TV broadcasting; softening of the domestic advertising
market; further consolidation of national and local advertisers;
risks associated with acquisitions, including integration of
acquired businesses; changes in TV viewing patterns, ratings and
commercial viewing measurement; the execution and timing of
retransmission consent agreements relating to digital revenues;
increases in syndicated programming costs; changes in television
network affiliation agreements; changes in government regulation;
competition; seasonality and other risks discussed in the Company�s
Annual Report on Form 10-K and other filings made with the
Securities and Exchange Commission (which are available on the
Company�s website, www.lintv.com, in the Investor Relations
section, or at http://www.sec.gov), which discussions are
incorporated in this release by reference. LIN TV undertakes no
obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, unless otherwise required to by applicable law. LIN
TV Corp. Condensed Consolidated Statements of Operations
(unaudited) � Three months ended Six months ended June 30, � June
30, � 2007 � � 2006 � 2007 � � 2006 � (in thousands, except per
share data) Net revenues $ 103,278 $ 102,709 $ 196,388 $ 193,249 �
Operating costs and expenses: Direct operating (excluding
depreciation of $8.2 million and $7.9 million for the three months
ended June 30, 2007 and 2006, respectively, and $16.4 million and
$17.0 million for the six months ended June 30, 2007 and 2006,
respectively) 28,874 27,316 57,892 55,320 Selling, general and
administrative 30,021 30,071 58,945 59,585 Amortization of program
rights 6,297 6,359 12,484 12,760 Corporate 5,838 12,807 10,975
18,580 Depreciation and amortization of intangible assets 8,757
9,012 17,590 19,586 Impairment of intangible assets and goodwill -
333,553 - 333,553 Restructuring charge � 188 � � - � � 91 � � - �
Total operating costs and expenses � 79,975 � � 419,118 � � 157,977
� � 499,384 � � Operating income (loss) 23,303 (316,409 ) 38,411
(306,135 ) � Other expense (income): Interest expense, net 15,671
17,380 33,634 34,128 Share of (income) loss in equity investments
(1,037 ) 571 (752 ) (1,009 ) Minority interest in loss (income) of
Banks Broadcasting, Inc. 33 (3,952 ) (149 ) (4,191 ) Loss on
derivative instruments 496 1,538 466 492 Loss on extinguishment of
debt - - 551 - Other, net � 659 � � 5,130 � � 442 � � 4,931 � Total
other expense, net 15,822 20,667 34,192 34,351 � Income (loss) from
continuing operations before provision for (benefit from) income
taxes 7,481 (337,076 ) 4,219 (340,486 ) Provision for (benefit
from) income taxes � 3,548 � � (92,207 ) � 2,272 � � (93,931 ) �
Income (loss) from continuing operations 3,933 (244,869 ) 1,947
(246,555 ) Discontinued operations: Income (loss) from discontinued
operations, net of provision for (benefit from) income taxes of
$0.8 million for the three months ended June 30, 2006 and ($0.7)
million and $1.8 million for the six months ended June 30, 2007 and
2006, respectively - 512 (368 ) (2,121 ) (Loss) gain from the sale
of discontinued operations, net of benefit from income taxes of
$2.3 million for the six months ended June 30, 2007 � (419 ) � - �
� 22,667 � � - � � Net income (loss) $ 3,514 � $ (244,357 ) $
24,246 � $ (248,676 ) � Basic income (loss) per common share: �
Income (loss) from continuing operations, net of tax 0.08 (4.88 )
0.04 (4.88 ) Income (loss) from discontinued operations, net of tax
- 0.01 (0.01 ) (0.04 ) (Loss) gain from the sale of discontinued
operations, net of tax � (0.01 ) � - � � 0.46 � � - � � Net income
(loss) � 0.07 � � (4.87 ) � 0.49 � � (4.92 ) � � Weighted - average
number of common shares outstanding used in calculating basic
income (loss) per common share 49,141 50,217 49,078 50,502 Diluted
income (loss) per common share: � Income (loss) from continuing
operations, net of tax 0.08 (4.88 ) 0.06 (4.88 ) Income (loss) from
discontinued operations, net of tax - 0.01 (0.01 ) (0.04 ) (Loss)
gain from the sale of discontinued operations, net of tax � (0.01 )
� - � � 0.42 � � - � � Net income (loss) � 0.07 � � (4.87 ) � 0.47
� � (4.92 ) � Weighted - average number of common shares
outstanding used in calculating diluted income (loss) per common
share 51,174 50,217 54,185 50,502 LIN TV CORP. � Unaudited
Consolidated Selected Balance Sheet Data (in thousands) � � June
30, December 31, 2007 � 2006 � Cash and cash equivalents $ 16,674 $
6,085 Other current assets 104,073 131,854 Total long term assets �
1,863,278 � � 1,987,907 � Total assets $ 1,984,025 � $ 2,125,846 �
� Current portion of long-term debt $ 30,938 $ 10,313 Other current
liabilities 55,756 94,034 Long-term debt, excluding current portion
848,909 936,485 Other long-term liabilities � 419,177 � � 486,262 �
Total liabilities 1,354,780 1,527,094 � Preferred stock of
consolidated affiliate 9,882 10,031 � Total stockholders' equity �
619,363 � � 588,721 � Total liabilities, preferred stock and
stockholders' equity $ 1,984,025 � $ 2,125,846 � � � Unaudited
Consolidated Selected Statements of Cash Flow Data (in thousands) �
Six months ended June 30, � 2007 � � 2006 � � Net cash flow
provided by (used in) operating activities: Continuing Operations $
11,955 $ 15,843 Discontinued Operations (12,839 ) (1,547 ) Net cash
flow provided by (used in) investing activities 73,701 (5,836 ) Net
cash flow used in financing activities � (68,472 ) � (8,024 ) Net
increase in cash and cash equivalents 4,345 436 Cash and cash
equivalents at the beginning of the period � 12,329 � � 11,135 �
Cash and cash equivalents at the end of the period 16,674 11,571
Less cash and cash equivalents from discontinued operations, end of
the period � - � � 3,679 � Cash and cash equivalents from
continuing operations, end of the period $ 16,674 � $ 7,892 �
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