LIN Media LLC (“LIN Media” or the “Company”)(NYSE:LIN), a local
multimedia company, today reported results for its third quarter ended
September 30, 2014.
Summary of Results for the Third Quarter Ended September 30, 2014
-
Net revenues increased 18% to $192.1 million compared to $163.1
million in the third quarter of 2013.
-
Net broadcast revenues increased 11% to $159.7 million in the third
quarter compared to $143.6 million in the third quarter of 2013.
-
Net digital revenues increased 66% to $32.3 million compared to $19.5
million in the third quarter of 2013.
-
Operating loss, which included a non-cash impairment charge of $60.9
million, was $20.4 million compared to operating income of $23.2
million in the third quarter of 2013.
-
Net loss per diluted share was $0.49, which included the impact of the
impairment charge of $1.12 per share, compared to net income per
diluted share of $2.63 in the third quarter of 2013, which included a
$2.56 per share benefit from special items.
Commenting on third quarter 2014 results, the Company’s President and
Chief Executive Officer Vincent L. Sadusky said: “Continued growth and
expansion of our digital media business, robust political advertising
and increasing subscriber fees helped drive our strong results during
the third, and likely final quarter before we close on our merger with
Media General. This is an exciting time as we prepare to combine and
create one of the largest broadcast companies in the U.S., with the
largest and most diversified digital business in our industry. I have
great confidence in our ability to successfully execute our integration
plans and capitalize on numerous growth opportunities.”
Operating Highlights
-
Local revenues, which include net local advertising revenues,
retransmission consent fee revenues and television station website
revenues, increased 6% to $111.9 million compared to $105.5 million in
the third quarter of 2013.
-
Net national revenues decreased 10% to $29.5 million compared to $32.8
million in the third quarter of 2013.
-
Net political revenues were $15.5 million compared to $2.6 million in
the third quarter of 2013.
-
The Company’s unduplicated desktop reach equaled nearly 100 million
U.S. unique visitors, reaching 42% of the total U.S. Internet audience.(1)
The Company’s video platform ranked #14 in comScore’s Video Metrix
report.(2)
(1) comScore September 2014 data including LIN Media
(television station websites), LIN Digital, Dedicated Media and
Federated Media.
(2) comScore September 2014 Video Metrix Key Measures Report.
Impairment Charge
Due to the previously announced nonrenewal of the CBS network
affiliation agreement at WISH-TV, the Company performed an interim
impairment test of the broadcast licenses and goodwill in its
Indianapolis market as of September 30, 2014, and as a result, recorded
an impairment charge of $60.9 million to the carrying value of goodwill
and broadcast licenses during the third quarter of 2014.
Key Balance Sheet and Cash Flow Items
Total debt outstanding as of September 30, 2014, net of cash, was $868.9
million compared to $932.2 million as of December 31, 2013. Cash and
cash equivalent balances as of September 30, 2014 were $23.4 million,
compared to $12.5 million as of December 31, 2013.
The Company's outstanding revolving credit facility balance was zero as
of September 30, 2014, compared to $5 million as of December 31, 2013.
Consolidated net leverage, as defined in the credit agreement governing
our senior secured credit facility, was 4.3x as of September 30, 2014,
compared to 5.2x as of December 31, 2013. Other components of cash flow
in the third quarter of 2014 include cash capital expenditures of $5.6
million and cash payments for programming of $6.7 million.
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, a GAAP reporting measure, to BCF, Adjusted EBITDA
and FCF on the Company’s website. In addition, the Company provides
additional information on its website, 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 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
television broadcasting; softening of the domestic advertising market;
further consolidation of national and local advertisers, and the
national sales representation market; risks associated with
acquisitions, and the integration of any acquired businesses including
our ability to integrate and successfully expand our digital operations;
changes in television 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 shareholders,
including HM Capital Partners I, LP and its affiliates, and other risks
discussed in the Company’s Annual Report on Form 10-K, the joint proxy
statement/prospectus related to the pending merger with Media General,
Inc. filed on July 24, 2014, the supplement and updated joint proxy
statement/prospectus filed on September 15, 2014, and other filings made
with the SEC (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 43
television stations and seven digital channels in 23 U.S. markets, with
multiple network affiliates in 18 markets. Our growing digital media
portfolio helps agencies and brands effectively and efficiently reach
their target audiences at scale by utilizing our ComScore Top 15 Video
and Top 25 Display market share, and the latest in conversational
marketing, video, display, mobile, social intelligence and monetization,
as well as reporting across all screens.
LIN Media’s highly-rated television stations deliver important local
news and community stories along with top-rated sports and entertainment
programming to 10.5% of U.S. television homes. LIN Media’s digital media
operations focus on emerging media and interactive technologies that
deliver performance-driven digital marketing solutions to some of the
nation’s most respected agencies and brands. LIN Media is traded on the
NYSE under the symbol “LIN”.
– financial tables follow –
LIN Media LLC
Consolidated Statement of Operations
(unaudited)
|
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|
|
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|
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|
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Three Months Ended September 30,
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Nine Months Ended September 30,
|
|
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2014
|
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2013
|
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2014
|
|
2013
|
|
|
(in thousands, except per share data)
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|
(in thousands, except per share data)
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Net revenues
|
|
$
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192,063
|
|
|
$
|
163,110
|
|
|
$
|
547,069
|
|
|
$
|
468,448
|
|
Operating expenses:
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|
|
|
|
|
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|
|
|
|
|
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Direct operating
|
|
76,029
|
|
|
62,504
|
|
|
220,950
|
|
|
180,695
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|
Selling, general and administrative
|
|
44,306
|
|
|
41,319
|
|
|
137,554
|
|
|
118,657
|
|
Amortization of program rights
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|
6,972
|
|
|
7,605
|
|
|
20,353
|
|
|
22,542
|
|
Corporate
|
|
8,521
|
|
|
10,682
|
|
|
29,718
|
|
|
30,047
|
|
General operating expenses
|
|
135,828
|
|
|
122,110
|
|
|
408,575
|
|
|
351,941
|
|
Depreciation, amortization and other operating expenses:
|
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|
|
|
|
|
|
|
|
|
|
|
Depreciation
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|
10,892
|
|
|
11,429
|
|
|
32,665
|
|
|
34,387
|
|
Amortization of intangible assets
|
|
3,788
|
|
|
5,886
|
|
|
15,065
|
|
|
17,038
|
|
Impairment of broadcast licenses and goodwill
|
|
60,867
|
|
|
—
|
|
|
60,867
|
|
|
—
|
|
Restructuring charge
|
|
1,084
|
|
|
468
|
|
|
1,084
|
|
|
2,991
|
|
Loss (gain) from asset dispositions
|
|
42
|
|
|
(9
|
)
|
|
141
|
|
|
173
|
|
Operating (loss) income
|
|
(20,438
|
)
|
|
23,226
|
|
|
28,672
|
|
|
61,918
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other expense:
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|
|
|
|
|
|
|
|
|
|
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Interest expense, net
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14,209
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|
|
13,976
|
|
|
42,568
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|
|
42,275
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Share of loss in equity investments
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|
—
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|
|
—
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|
|
100
|
|
|
25
|
|
Other (income) expense, net
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(768
|
)
|
|
2,055
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|
|
(851
|
)
|
|
2,115
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|
Total other expense, net
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13,441
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|
|
16,031
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|
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41,817
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|
|
44,415
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|
|
|
|
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|
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(Loss) income before (benefit from) provision for income taxes
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|
(33,879
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)
|
|
7,195
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|
|
(13,145
|
)
|
|
17,503
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|
(Benefit from) provision for income taxes
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|
(7,996
|
)
|
|
(139,313
|
)
|
|
813
|
|
|
(135,154
|
)
|
Net (loss) income
|
|
(25,883
|
)
|
|
146,508
|
|
|
(13,958
|
)
|
|
152,657
|
|
Net income (loss) attributable to noncontrolling interests
|
|
517
|
|
|
(430
|
)
|
|
(542
|
)
|
|
(900
|
)
|
Net (loss) income attributable to LIN Media LLC
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|
$
|
(26,400
|
)
|
|
$
|
146,938
|
|
|
$
|
(13,416
|
)
|
|
$
|
153,557
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|
|
|
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Basic net (loss) income per common share:
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|
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|
|
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Net (loss) income
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|
$
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(0.49
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)
|
|
$
|
2.78
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|
|
$
|
(0.25
|
)
|
|
$
|
2.93
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of common shares outstanding used in
calculating basic income per common share
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|
54,372
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|
|
52,791
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|
|
53,962
|
|
|
52,328
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted (loss) income per common share:
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|
|
|
|
|
|
|
|
|
|
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Net (loss) income
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|
$
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(0.49
|
)
|
|
$
|
2.63
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|
|
$
|
(0.25
|
)
|
|
$
|
2.77
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of common shares outstanding used in
calculating diluted income per common share
|
|
54,372
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|
|
55,855
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|
|
53,962
|
|
|
55,378
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|
|
|
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|
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|
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|
|
|
|
|
|
Preliminary Unaudited Consolidated Balance Sheet Data:
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|
|
|
|
September 30, 2014
|
|
December 31, 2013
|
|
|
(in thousands)
|
Cash and cash equivalents
|
|
$
|
23,382
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|
|
$
|
12,525
|
Marketable securities
|
|
174
|
|
|
—
|
Total other assets
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|
169,862
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|
|
167,408
|
Total non-current assets
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|
971,793
|
|
|
1,036,917
|
Total assets
|
|
$
|
1,165,211
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|
|
$
|
1,216,850
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|
|
|
|
|
|
Current portion of long-term debt
|
|
$
|
20,383
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|
|
$
|
17,364
|
Total other liabilities
|
|
162,315
|
|
|
170,186
|
Long-term debt, excluding current portion
|
|
871,931
|
|
|
927,328
|
Total liabilities
|
|
1,054,629
|
|
|
1,114,878
|
|
|
|
|
|
|
Redeemable noncontrolling interest
|
|
15,165
|
|
|
12,845
|
|
|
|
|
|
|
Total shareholders' equity
|
|
95,417
|
|
|
89,127
|
Total liabilities, redeemable noncontrolling interest and
shareholders' equity
|
|
$
|
1,165,211
|
|
|
$
|
1,216,850
|
|
|
|
|
|
|
|
|
Unaudited Consolidated Selected Statement of Cash Flows Data:
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
|
|
|
2014
|
|
2013
|
|
|
(in thousands)
|
Net cash provided by operating activities
|
|
$
|
110,383
|
|
|
$
|
58,505
|
|
Net cash used in investing activities
|
|
(49,308
|
)
|
|
(131,677
|
)
|
Net cash (used in) provided by financing activities
|
|
(50,218
|
)
|
|
54,582
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
10,857
|
|
|
(18,590
|
)
|
Cash and cash equivalents at the beginning of the period
|
|
12,525
|
|
|
46,307
|
|
Cash and cash equivalents at the end of the period
|
|
$
|
23,382
|
|
|
$
|
27,717
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Copyright Business Wire 2014