August 5, 2016 Last Updated 6:58 am

Media General reports revenue up 13% as political advertising and digital booms

The broadcast company that nearly, but didn’t merge with Meredith, reports strong increases in revenue and earnings as advertising picks up in this political season

RICHMOND, Va. – August 5, 2016 — Media General, Inc., one of the nation’s largest local media companies, today reported results for the second quarter ended June 30, 2016.

Summary of Results for the Second Quarter 2016

  • Net revenues increased 13% to $363 million, compared to $321 million in the second quarter of the prior year.
  • Excluding Political revenue, net revenues increased 11% compared to the second quarter of the prior year.
  • Net local revenues, which include net local advertising revenues and retransmission consent fees, increased 13% to $248 million, compared to $220 million in the second quarter of the prior year.
  • Net national revenues increased 1% to $54 million, compared to $53 million in the second quarter of the prior year.
  • Net political revenues were $10 million, compared to $3 million in the second quarter of the prior year.
  • Net digital revenues increased 18% to $43 million, compared to $36 million in the second quarter of the prior year.
  • Operating expenses increased 7% to $303 million, compared to $284 million in the second quarter of the prior year.
  • Absent the merger-related expenses, restructuring costs, the one-time acquisition-related compensation and higher network fees, total operating costs for the second quarter were flat when compared to the same period in the prior year.
  • Corporate and other expenses were $18 million, compared to $12 million in the second quarter of the prior year. One-time acquisition-related compensation payments totaling $7 million related to the purchase of HYFN were included in Corporate and other expense for the second quarter of 2016. Excluding the one-time item, Corporate and other decreased 13% to $11 million compared to the second quarter of the prior year.
  • Operating income was $60 million, compared to $37 million in the second quarter of the prior year.
  • Broadcast Cash Flow increased 25% to $120 million, compared to $96 million in the second quarter of the prior year.
  • Adjusted EBITDA increased 23% to $111 million, compared to $91 million in the second quarter of the prior year. Included in Adjusted EBITDA were $2.6 million of losses from the Company’s national digital businesses.1
  • Earnings per diluted share was $0.14, compared to earnings per diluted share of $0.01 in the second quarter of the prior year.

Commenting on the second quarter 2016, President and Chief Executive Officer, Vincent L. Sadusky, said: “We delivered strong results, with total net revenues increasing 13% and Adjusted EBITDA growing 23%, compared to the prior year. Key drivers for our performance were political advertising, an increase in pay-TV subscriber fees and expense management, including further realization of synergies from the LIN Media merger. In addition, our digital restructuring initiatives resulted in an 18% revenue increase for the quarter, and in June, we recorded the highest digital revenue month in our company’s history. Excluding political advertising, total net revenues increased 11%, compared to the prior year.”

Mr. Sadusky added, “Looking ahead, we feel great about the second half of the year, as our strong news stations benefit from national and local political races. Additionally, the highly viewed Summer Olympics will air on our 13 NBC stations. This is an exciting time as we work towards the consummation of our combination with Nexstar.”

Recent Operational Highlights

  • Time sales, including political time sales and digital revenue, grew 7% over the second quarter in the prior year.
  • The automotive category, which represented 25% of gross local and national time sales in the second quarter, increased 1%, compared to the prior year.
  • The Company’s television stations rank number one or number two in local news in 68% of its broadcast markets.2 In addition, the Company’s television station websites rank number one or number two in 55% of their measured markets.3
  • The Company’s TV stations received 22 regional Edward R. Murrow Awards.
  • The Company acquired the remaining stake of HYFN, an industry-leading social media advertising company.

Key Balance Sheet and Cash Flow Items

Total debt outstanding (including capital leases) net of cash, was $2.2 billion, as of both June 30, 2016 and December 31, 2015. Cash and cash equivalent balances as of June 30, 2016 were $25 million, compared to $41 million as of December 31, 2015. The Company has a $150 million revolving credit facility that was undrawn, with $146 million of availability as of June 30, 2016. Consolidated net leverage, as defined in the credit agreement governing the senior secured credit facility, was 5x as of June 30, 2016. Components of cash flow in the second quarter of 2016 included capital expenditures of $18 million.

Business Outlook

The Company expects that net revenues for the third quarter of 2016 will increase in the range of 23% to 29% (or $74 million to $92 million), as compared to the prior year. Excluding political, the Company expects net revenues to increase in the range of 12% to 16%, mainly driven by increases in retransmission consent fees and digital revenues.

The Company expects direct operating and selling, general and administrative expenses to increase in the range of 9% to 11% (or $21 million to $24 million) as compared to $222 million in the third quarter of 2015. If you exclude programming fees paid to networks and variable sales costs, direct operating and SG&A expenses would be flat to slightly up compared to the third quarter of 2015.

The Company’s current outlook for revenues, expenses and cash flow items for the third quarter of 2016, excluding special items, are anticipated to be in the following ranges:

MediaGen-Q2-16

Comments are closed.