LIN TV Corp. (“LIN Media”; NYSE: TVL), a local multimedia
company, today reported results for its first quarter ended March
31, 2012.
Summary of Results for the First Quarter
Ended March 31, 2012
- Net revenues increased 15% to $103.2
million, compared to $89.7 million in the first quarter of
2011.
- Local revenues, which include net local
advertising revenues, retransmission consent fees and TV station
web site revenues, increased 16% to $67.7 million, compared to
$58.3 million in the first quarter of 2011.
- Net national revenues increased 4% to
$23.1 million, compared to $22.3 million in the first quarter of
2011.
- Net political revenues were $2.9
million, compared to $1 million in the first quarter of 2011.
- Interactive revenues, which include
revenues from RMM and Nami Media1, increased 41% to $7 million,
compared to $5 million in the first quarter of 2011.
- Operating income increased 31% to $20.5
million, compared to $15.7 million in the first quarter of
2011.
- Net income per diluted share was $0.08,
compared to $0.03 in the first quarter of 2011.
Commenting on first quarter 2012 results, the Company’s
President and Chief Executive Officer Vincent L. Sadusky said:
“2012 is off to a great start as a result of strong first quarter
results and revenue increases in all areas of our business. We
continue to see the benefits of our long term strategy and we are
excited about the potential opportunity to capitalize on numerous
synergies that would result from our agreement with New Vision
Television.”
_______________
1 Nami Media, Inc. was acquired by the Company in the fourth
quarter of 2011.
_______________
Operating Highlights
TV Stations and Local Web Sites
- During the first quarter of 2012, 82%
of the Company’s ABC, CBS, FOX and NBC stations were either the
highest or second highest viewed television channels in their local
markets.2
- Core local and national time sales
combined, which excludes political times sales, increased 6% in the
first quarter of 2012, compared to the first quarter of 2011.
- Six of the top ten advertising
categories increased in the first quarter of 2012, compared to the
first quarter of 2011.
- The automotive category, which
represented 26% of local and national advertising sales in the
first quarter of 2012, increased 15% compared to the first quarter
of 2011, during which the automotive category represented 23%.
- The Company launched its 12th local
lifestyle show and delivered approximately 300 more local
programming hours in the first quarter of 2012, compared to the
first quarter of 2011.
- During the first quarter of 2012, the
Company delivered 33.3 million total video impressions, engaged an
average of 8.7 million monthly unique visitors on its stations’ web
sites, and delivered 247 million user actions. Average time on site
during the quarter was more than 20 minutes.
- The Company’s commitment to continuous
news coverage resulted in over 7.2 million minutes of live
streaming during the first quarter of 2012.
- During the first quarter of 2012, 100%
of the Company’s markets ranked either number one or two for page
views and overall engagement, and 14 out of 15 of the
Company's markets ranked either number one or two for unique
visitors, versus local broadcast competitors measured by comScore.
In comparison to all local media competitors measured by
comScore, 11 out of 15 of the
Company's markets ranked either number one or
two for overall engagement.3
- Mobile page views, which include usage
of the Company’s mobile web sites and smartphone and tablet
applications, were approximately 119 million page views during the
first quarter of 2012.
_______________
2 Nielsen Media Research; Average of LIN Media’s February
2012 Nielsen Ratings based on key demographics: Monday-Friday,
Early Morning, Early Evening, Late News. All Nielsen data included
in this release represents Nielsen’s estimates, and Nielsen has
neither reviewed nor approved the data included in this
release.
3 comScore media metrics data; Average of January-March 2012.
Overall engagement references comScore’s average minutes per
visitor.
_______________
Key Balance Sheet and Cash Flow
Items
Total debt outstanding as of March 31, 2012, net of cash, was
$579.5 million, compared to $595.5 million as of December 31, 2011.
Unrestricted cash and cash equivalent balances as of March 31, 2012
were $12.7 million, compared to $18.1 million as of December 31,
2011. Restricted cash balances as of March 31, 2012 were $0,
compared to $255.2 million as of December 31, 2011, which reflected
the amount held on irrevocable deposit for the redemption of the
Company’s Senior Subordinated Notes on January 20, 2012.
The Company’s outstanding revolving credit facility balance was
$10 million as of March 31, 2012, compared to $35 million
outstanding as of December 31, 2011. As of March 31, 2012, $65
million was available for borrowing under the revolving credit
facility. Consolidated net leverage, as defined in the Company’s
senior secured credit facility, was 4.6x as of March 31, 2012,
compared to 4.9x as of December 31, 2011. Other components of cash
flow in the first quarter of 2012 include cash capital expenditures
of $5.5 million and cash payments for programming of $5.6
million.
Subsequent Events
On April 21, 2012, the Company completed the sale of
substantially all of the assets of WUPW-TV to WUPW, LLC.
On May 4, 2012, LIN Television entered into an asset purchase
agreement with affiliates and subsidiaries of New Vision
Television, LLC (“New Vision”) to acquire the assets of 13 network
affiliates in eight markets for $330.4 million and the assumption
of $12 million of debt. LIN Television also agreed to provide
certain services to five separately owned network affiliates
currently served by New Vision pursuant to sharing arrangements
with a third-party licensee upon the closing of the transaction.
Pursuant to the terms of the purchase agreement, the Company
deposited $33.5 million into an escrow account, which will be
applied to the payment of the purchase price at closing. The
Company intends to fund the remaining purchase price due at closing
with a combination of a draw against LIN Television’s revolving
credit facility and newly incurred debt. In addition, on May 4,
2012, LIN Television entered into a commitment letter pursuant to
which JPMorgan Chase Bank, N.A. and J.P. Morgan Securities LLC have
committed to provide up to $265 million under a senior unsecured
bridge loan facility which, if entered into, would be utilized in
connection with the acquisition. The bridge loan facility would be
guaranteed by each of LIN Television’s wholly owned subsidiaries
and would initially bear an annual interest rate equal to LIBOR
plus 6.50%. The closing of the acquisition, which is expected to
occur in late 2012, is subject to regulatory approvals and other
closing conditions, including the approval of the FCC and clearance
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
Business Outlook
The Company has provided historical quarterly financial
information for its continuing operations on its web site.
Interested parties should go to the Investor Relations section at
www.linmedia.com.
The Company expects that net revenues for the second quarter of
2012 will increase in the range of 12% to 16% (or $12 million to
$16 million), as compared to net revenues of $101 million in the
second quarter of 2011.
The Company expects that its direct operating and selling,
general and administrative expenses, which include variable sales
related expenses, will increase in the range of 12% to 14% (or $7.2
million to $8.2 million) in the second quarter of 2012 as compared
to reported expenses of $58.3 million in the second quarter of
2011.
The Company’s current outlook for revenues, expenses and cash
flow items for the second quarter of 2012, excluding special items
and the pending acquisition described above, are anticipated to be
in the following ranges:
Second Quarter of
2012 Net broadcast advertising revenues
$101.5 to $104.0 million Interactive revenues
$9.0 to $10.0 million Network
compensation/Barter/Other revenues
$2.5 to $3.0 million Total net revenues
$113.0 to $117.0 million Direct
operating and selling, general and administrative expenses(4)
$65.5 to $66.5 million
Station non-cash stock-based compensation expense
$0.4 million Amortization of program
rights $5.0 to $5.5
million Cash payments for programming
$5.5 to $6.0 million Corporate expense(4)
$7.0 to $7.5 million Corporate
non-cash stock-based compensation expense
$1.8 million Depreciation and amortization of
intangibles $6.9 to $7.4
million Cash capital expenditures
$7.0 to $9.0 million Cash interest expense
$8.2 to $8.8 million Principal
amortization of term loans
$0.7 million Cash taxes
$0.3 to $0.4 million Effective tax rate
38% to 40% (4) Includes non-cash stock-based
compensation expense.
For the full year, the Company expects cash capital expenditures
to be within the range of $26 to $27 million, cash interest expense
of $34 to $35 million, cash taxes of $0.6 to $0.7 million and its
effective tax rate to range between 38% and 40%.
The Company advises that all of the information and factors set
forth above are subject to risks, uncertainties and assumptions
(see the “Forward-Looking Statements” heading below), which could
individually or collectively cause actual results to differ
materially from those projected above.
Conference Call
The Company will hold a conference call to discuss its first
quarter 2012 results today, May 9, 2012, at 9:00 AM Eastern Time.
To participate in the call, please dial 1-877-719-9789 for U.S.
callers and 1-719-325-4763 for international callers. The call-in
pass code is 8449814. Callers who intend to participate in the call
should dial-in 10 minutes before the start of the call to ensure
access. The conference call will also be webcast simultaneously
from the Company’s web site, www.linmedia.com, and can be
accessed there through a link on the home page. For those
unavailable to participate in the live teleconference, a replay can
be accessed via the Investor Relations section of
www.linmedia.com or by dialing 1-888-203-1112 and entering
the same pass code as above. The telephone replay will be available
through May 23, 2012.
Access to Non-GAAP Financial 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 financial 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. The Company makes available
reconciliations of its operating income (loss), a GAAP reporting
measure, to BCF, Adjusted EBITDA and FCF on the Company’s web site.
In addition, the Company provides additional information on its web
site, at the same location, regarding historical revenue by source,
pro forma income statement information and certain other components
of cash flow. Interested parties should go to the Investor
Relations section of www.linmedia.com.
Forward-Looking
Statements
The information discussed in this press release, particularly in
the section with the heading Business Outlook, includes
forward-looking statements about the Company’s 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 the
Company 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, local, national and political
advertising growth; changes in interactive, network compensation,
barter and other revenues; changes in direct operating, selling,
general and administrative, amortization of program rights and
corporate expenses; and cash programming, cash capital
expenditures, cash interest expense and principal amortization,
cash tax payments and effective tax rates. 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, general economic uncertainty;
restrictions on the Company’s operations as a result of the
Company’s indebtedness; global or local events that could disrupt
TV broadcasting; softening of the domestic advertising market;
further consolidation of national and local advertisers, and the
national sales representation market; potential liabilities related
to the Company’s guarantee of the debt obligations of its joint
venture with NBCUniversal; risks associated with acquisitions,
including acquisition of the New Vision stations, our ability to
obtain government approvals for the acquisition, our ability to
obtain financing to fund the acquisition and the integration of any
acquired businesses; changes in TV viewing patterns, ratings and
commercial viewing measurement; increases in news and syndicated
programming costs, and capital expenditures; changes in television
network affiliation agreements and retransmission consent
agreements; changes in government regulation; competition;
seasonality; effects of complying with accounting standards;
potential influence of certain stockholders, including HM Capital
Partners I, LP and its affiliates, 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 Investor Relations section of www.linmedia.com, or at www.sec.gov), which are incorporated in
this release by reference. The Company 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.
About LIN Media
LIN Media is a local multimedia company that operates or
services 32 network affiliates, more than 50 television and niche
web sites, and a growing suite of mobile products. The Company's
strategic investments focus on emerging media and
interactive technologies that deliver measurable results to
advertisers. LIN TV Corp. is traded on the NYSE under the symbol
"TVL".
– financial tables follow –
LIN TV Corp. Consolidated Statements of
Operations (unaudited)
Three Months Ended March
31, 2012 2011 (in thousands, except per share
data) Net revenues $ 103,200 $ 89,719 Operating
expenses: Direct operating 35,157 29,933 Selling, general and
administrative 28,383 25,534 Amortization of program rights 5,219
5,328 Corporate 6,746 6,483 General
operating expenses 75,505 67,278 Depreciation, amortization
and other operating expenses (benefits): Depreciation 6,759 6,264
Amortization of intangible assets 477 261 (Gain) loss from asset
dispositions (1 ) 255 Operating income 20,460
15,661 Other expense: Interest expense, net 10,370 12,932
Share of loss in equity investments 91 613 Gain on derivative
instruments - (620 ) Loss on extinguishment of debt 2,099 142 Other
(income) expense, net (13 ) 1 Total other
expense, net 12,547 13,068 Income before provision for
income taxes 7,913 2,593 Provision for income taxes 2,798
982 Income from continuing operations 5,115
1,611 Discontinued operations:
Loss from discontinued operations, net of
a loss from the sale of discontinued operationsof $372 for the
three months ended March 31, 2012 and a benefit from income taxes
of$659 and $10 for the three months ended March 31, 2012 and 2011,
respectively
(1,231 ) (25 ) Net income 3,884 1,586 Net loss
attributable to noncontrolling interests (382 ) -
Net income attributable to LIN TV Corp. $ 4,266 $
1,586
Basic income per common share attributable
to LIN TV Corp.: Income from continuing operations attributable
to LIN TV Corp. $ 0.10 $ 0.03 Loss from discontinued operations,
net of tax (0.02 ) - Net income attributable
to LIN TV Corp. $ 0.08 $ 0.03 Weighted-average number
of common shares outstanding used in calculating basic income per
common share 56,184 54,983
Diluted income per common
share attributable to LIN TV Corp.: Income from continuing
operations attributable to LIN TV Corp. $ 0.10 $ 0.03 Loss from
discontinued operations, net of tax (0.02 ) -
Net income attributable to LIN TV Corp. $ 0.08 $ 0.03
Weighted-average number of common shares outstanding used in
calculating diluted income per common share 57,512 56,545
LIN TV
Corp. Consolidated Balance Sheets (unaudited)
March
31,2012 December 31,2011 (in thousands,
except share data) ASSETS Current assets: Cash and cash
equivalents $ 12,652 $ 18,057 Restricted cash - 255,159 Accounts
receivable, less allowance for doubtful accounts (2012 - $2,539;
2011 - $2,310) 85,211 91,093 Deferred income tax assets 6,563 4,249
Assets held for sale 1,523 3,253 Other current assets 6,666
6,090 Total current assets 112,615 377,901
Property and equipment, net 144,790 145,429 Deferred financing
costs 11,166 12,472 Goodwill 122,312 122,069 Broadcast licenses and
other intangible assets, net 399,194 400,081 Assets held for sale
3,735 12,505 Other assets 10,923 11,487
Total assets $ 804,735 $ 1,081,944
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND
STOCKHOLDERS' DEFICIT Current liabilities: Current portion of
long-term debt $ 4,437 $ 253,856 Accounts payable 6,754 10,972
Accrued expenses 42,875 38,578 Program obligations 9,659 9,892
Liabilities held for sale 1,516 3,719
Total current liabilities 65,241 317,017 Long-term debt, excluding
current portion 587,692 614,861 Deferred income tax liabilities
171,635 167,371 Program obligations 2,828 3,874 Liabilities held
for sale 75 1,308 Other liabilities 52,925
58,642 Total liabilities 880,396
1,163,073 Redeemable noncontrolling interest 3,352
3,503 Stockholders' deficit: Class A common stock, $0.01 par
value, 100,000,000 shares authorized, Issued: 34,707,426 and
34,650,169 shares as of March 31, 2012 and December 31, 2011,
respectively Outstanding: 32,913,989 and 33,012,351 shares as of
March 31, 2012 and December 31, 2011, respectively 309 309 Class B
common stock, $0.01 par value, 50,000,000 shares authorized,
23,401,726 shares as of March 31, 2012 and December 31, 2011,
issued and outstanding; convertible into an equal number of shares
of class A or class C common stock 235 235 Class C common stock,
$0.01 par value, 50,000,000 shares authorized, 2 shares as of March
31, 2012 and December 31, 2011, issued and outstanding; convertible
into an equal number of shares of class A common stock - - Treasury
stock, 1,793,437 and 1,637,818 shares of class A common stock as of
March 31, 2012 and December 31, 2011, respectively, at cost (11,227
) (10,598 ) Additional paid-in capital 1,123,310 1,121,589
Accumulated deficit (1,153,124 ) (1,157,390 ) Accumulated other
comprehensive loss (38,516 ) (38,777 ) Total
stockholders' deficit (79,013 ) (84,632 ) Total
liabilities, redeemable noncontrolling interest and stockholders'
deficit $ 804,735 $ 1,081,944
LIN TV
Corp. Consolidated Statements of Cash Flows
(unaudited)
Three Months Ended March 31, 2012 2011
(in thousands) OPERATING ACTIVITIES: Net income $
3,884 $ 1,586 Loss from discontinued operations 1,231 25 Adjustment
to reconcile net income to net cash provided by operating
activities: Depreciation 6,759 6,264 Amortization of intangible
assets 477 261 Amortization of financing costs and note discounts
561 1,029 Amortization of program rights 5,219 5,328 Program
payments (5,572 ) (6,200 ) Loss on extinguishment of debt 871 142
Gain on derivative instruments - (620 ) Share of loss in equity
investments 91 613 Deferred income taxes, net 2,606 850 Stock-based
compensation 1,548 1,557 (Gain) loss from asset dispositions (1 )
255 Other, net 436 198 Changes in operating assets and liabilities:
Accounts receivable 5,882 7,362 Other assets (1,250 ) (5,029 )
Accounts payable (4,218 ) (201 ) Accrued interest expense 1,798
11,061 Other liabilities and accrued expenses (2,665 )
(2,211 )
Net cash provided by operating activities,
continuing operations 17,657 22,270
Net cash used in
operating activities, discontinued operations (1,140 )
(176 )
Net cash provided by operating activities
16,517 22,094
INVESTING
ACTIVITIES: Capital expenditures (5,450 ) (2,607 ) Change in
restricted cash 255,159 - Proceeds from the sale of assets - 40
Payments on derivative instruments - (644 ) Shortfall loans to
joint venture with NBCUniversal (595 )
-
Net cash provided by (used in) investing
activities, continuing operations 249,114 (3,211 )
Net cash
provided by investing activities, discontinued operations
6,314 -
Net cash provided by (used
in) investing activities 255,428 (3,211 )
FINANCING ACTIVITIES: Net proceeds on exercises of
employee and director stock-based compensation 173 290 Principal
payments on long-term debt (276,695 ) (3,978 ) Payment of long-term
debt issue costs (199 ) (68 ) Treasury stock purchased (629
) -
Net cash used in financing activities
(277,350 ) (3,756 ) Net (decrease) increase in
cash and cash equivalents (5,405 ) 15,127 Cash and cash equivalents
at the beginning of the period 18,057 11,648
Cash and cash equivalents at the end of the period $ 12,652
$ 26,775
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