(Source: Business Wire)
LIN TV Corp. (NYSE: TVL) today reported third quarter 2009 results.
Summary of Results for the Third
Quarter 2009
Net revenues decreased 18% to $81.4 million, compared to $98.8 million
in the third quarter of 2008.
Digital revenues, which include Internet advertising revenues and
retransmission consent fees, increased 28% to $10.4 million, compared
to $8.1 million in the third quarter of 2008.
General operating expenses decreased 9% to $60.9 million, compared to
$66.8 million in the third quarter of 2008.
Operating income was $13.8 million, compared to operating income of
$24.5 million in the third quarter of 2008.
Loss from continuing operations was $0.9 million, including a special
item of $1.2 million after-tax, compared to income from continuing
operations of $10.2 million in the third quarter of 2008.
Net loss per diluted share was $0.02, compared to net income per
diluted share of $0.20 in the third quarter of 2008.
Commenting on the third quarter results, LIN TV's President and Chief
Executive Officer Vincent L. Sadusky said: "As anticipated, the economic
conditions in our markets remained difficult which resulted in reduced
advertising expenditures by our advertisers. Our efficiency plan
resulted in meaningful expense reductions and coupled with digital
revenue growth, allowed us to exceed our guidance. Looking ahead, the
pace of economic growth and recovery remains uncertain, however, we are
experiencing modest improvement in advertising demand. We believe our
productivity gains, continued growth in our digital business and the
return of political advertising will result in significant cash flow
growth in 2010."
Acquisition of Red McCombs Media, LP
On October 2, 2009, the Company completed the acquisition of Red McCombs
Media, LP ("RM Media"), an online advertising and media services company
based in Austin, Texas. The acquisition provides the Company with a
national interactive footprint and significantly expands the Company's
multi-platform offerings by providing national online advertising and
enhanced services, including targeted display, rich media, video
advertising, custom-built vertical channels, search engine marketing,
search engine optimization, and mobile marketing.
Key Balance Sheet and Cash Flow Items
Total debt outstanding at September 30, 2009 was $680.8 million, as
compared to $743.4 million at December 31, 2008. Unrestricted cash and
cash equivalent balances at September 30, 2009 were $11.8 million, as
compared to $20.1 million at December 31, 2008. During the quarter ended
September 30, 2009, the Company paid $4.0 million of principal on its
term loan balances and $7.0 million of principal on its revolving credit
facility. The Company's outstanding revolving credit facility balance
was $203.0 million at September 30, 2009, as compared to $135.0 million
at December 31, 2008, with $22.0 million available for borrowing under
that facility. Consolidated leverage, as defined in the Company's
Amended and Restated Credit Agreement, was 7.8x as of September 30, 2009
compared to 5.7x as of December 31, 2008.
Other components of cash flow for the third quarter of 2009 were cash
capital expenditures of $1.3 million and cash payments for programming
of $6.6 million.
Third Quarter 2009 Special Item
During the quarter ended September 30, 2009, the Company recorded an
impairment charge of $2.0 million, or $1.2 million after-tax, relating
to an accrued loan to the Company's joint venture with NBC Universal,
which has experienced depressed cash flows during this economic
downturn. The charge relates to a write down of amounts the Company
expects to advance to the joint venture during the fourth quarter of
2009 and through the first quarter of 2010 under a shortfall funding
agreement with NBC Universal.
Operating Highlights
Throughout the economic downturn, the Company has continued to improve
its product quality and compete vigorously for audience share.
Local News Leadership and Ratings Highlights:
15 of the Company's "Big-4" network affiliate stations ranked #1 or #2
from sign-on/sign-off during the July 2009 ratings period in
households.
13 of the Company's "Big-4" network affiliate stations grew audience
across all local news dayparts in household ratings year-to-year
during the July 2009 ratings period.
Seven television stations ranked #1 in household ratings for all
weekday newscasts (morning, early evening and late news): WOOD-TV;
WAVY-TV; WIVB-TV; WANE-TV; WWLP-TV; WTHI-TV; and WLFI-TV.
The Company increased local programming by 235 hours compared to the
same period in 2008.
Digital Highlights:
Retransmission consent fees increased 36% in the third quarter of
2009, compared to the same period in 2008.
The Company delivered its largest audience to-date across all of its
web sites in the third quarter of 2009, including a combined 184.2
million total user actions, an increase of 37% compared to the same
period last year. Time spent on site increased 77% and unique visitors
increased 25% compared to the same period last year.
The Company delivered 32 million video views with an average duration
of more than 2 minutes.
75% of the Company's station web sites rank #1 for time spent on site
in the local market compared to its broadcast media competitors.1
Mobile impressions increased 54% to 28.7 million in the third quarter
of 2009 compared to the second quarter of 20092. Also
during the third quarter of 2009, the Company was the first
broadcaster in its local markets to launch BlackBerry smartphone
applications. Since the launch of the Company's Blackberry and iPhone
applications, the Company has generated over 60 million impressions
and 160,000 application downloads.
Revenue:
Core local and national advertising sales combined, which excludes
political advertising sales, decreased 16% to $75.6 million in the
third quarter of 2009, compared to $90.3 million for the same period
in 2008, reflecting the continued impact of the economic downturn
nationally and across all of the Company's markets.
The Company's political advertising sales were $3.0 million for the
quarter ended September 30, 2009, compared to $11.4 million in the
same period last year.
Operating Expenses:
General operating expenses for the three months ended September 30,
2009 decreased by $5.9 million, or 9% compared to the third quarter
2008, driven largely by decreases in direct operating expenses and
selling, general and administrative expenses of $3.3 million and $3.6
million, respectively, offset by the impact of a deferred compensation
benefit that was recorded in 2008, which did not recur in 2009.
Business Outlook
The results presented in this release, including all of the amounts
discussed in this Business Outlook section, reflect the classification
of the operations of Banks Broadcasting, Inc. as discontinued operations
for all periods presented. The Company has provided historical quarterly
financial information for its continuing operations on its web site.
Interested parties should go to www.lintv.com
and in the "Investor Relations" section, click on "Financial Reports &
Releases," then "Quarterly and Other Reports" and then "Supplemental
Financial Data."
Based on current sales order pacings, the market decline for both local
and national advertising spending and reduced political advertising this
year, the Company expects that fourth quarter 2009 net revenues will
decrease in the range of 8.8% to 14.6% (or $9.2 million to $15.2
million), compared to net revenues of $104.2 million for the fourth
quarter of 2008. Fourth quarter 2008 revenues included $20.7 million of
net political advertising. For the full year, we currently expect that
2009 net revenues will decrease in the range of 16.6% to 18.1% (or $66.4
million to $72.4 million) compared to reported net revenues of $399.8
million in 2008.
In addition, due to decreases in variable sales costs and other cost
reduction actions, the Company expects that its station direct operating
and SG&A expenses will decrease in the range of 4.9% to 9.9% (or $2.9
million to $5.9 million) for the fourth quarter of 2009 compared to
expenses of $59.9 million for the fourth quarter of 2008. For the full
year, we expect station direct operating and SG&A expenses will decrease
in the range of 9.7% to 10.9% (or $22.6 million to $25.6 million)
compared to reported expenses of $233.8 million for 2008.
The Company's current outlook for revenues, expenses and cash flow items
for the fourth quarter and full year 2009, excluding special items, are
anticipated to be in the following ranges:
Fourth Quarter 2009 Full Year 2009
Net advertising revenues $73.0 to $76.0 million $272.7 to $275.7 million
Net digital revenues $13.0 to $15.0 million $42.5 to $44.5 million
Network comp/Barter/Other revenues $3.0 to $4.0 million $12.2 to $13.2 million
Total net revenues $89.0 to $95.0 million $327.4 to $333.4 million
Direct operating and SG&A expenses((1)) $54.0 to $57.0 million $208.2 to $211.2 million
Station non-cash stock-based compensation expense $0.2 to $0.4 million $0.7 to $0.9 million
Amortization of program rights $6.0 to $6.5 million $24.2 to $24.7 million
Cash payments for programming $6.5 to $7.0 million $27.2 to $27.7 million
Corporate expense((1)) $4.0 to $4.5 million $17.2 to $17.7 million
Corporate non-cash stock-based compensation expense $0.2 to $0.4 million $1.3 to $1.5 million
Depreciation and amortization of intangibles $8.2 to $8.5 million $31.4 to $31.7 million
Cash capital expenditures $5.0 to $6.0 million $9.5 to $10.5 million
Cash interest expense $10.0 - $10.5 million $39.3 - $39.8 million
Debt principal amortization $4.0 million $15.9 million
Cash taxes $0.0 to $0.1 million $0.0 to $0.1 million
Effective tax rate 30% to 33% 92% to 95%
Distributions from equity investments $0.0 $2.6 million
((1)) Includes non-cash stock-based compensation expense.
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LIN TV 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
LIN TV will hold a conference call to discuss its third quarter results
today, October 29, 2009, at 9:00 AM Eastern Time. To participate in the
call, please dial 1-800-533-7954 for U.S. callers and 1-785-830-1924 for
international callers. The call-in pass code is 5491051. 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 LIN TV Corp.'s website, www.lintv.com,
and can be accessed there through a link on the home page (under the
Latest News section). 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 the same passcode as above.
The telephone replay will be available through November 12, 2009.
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. The preceding discussion of our results includes a
discussion of loss from continuing operations, including special items,
and includes a section detailing these items. Loss from continuing
operations, including special items, is a non-GAAP financial measure and
is not intended to replace loss from continuing operations, a directly
comparable GAAP financial measure. Special items are items that are
significant, and unusual or infrequent and provide more comparable
information about the Company's operating performance. Additionally,
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 www.lintv.com
and in the "Investor Relations" section, click on "Financial Reports &
Releases", then "Quarterly and Other Reports" and then "Supplemental
Financial Data".
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, 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,
cash capital expenditures, cash interest expense and principal
amortization, future compliance with financial covenants in our credit
agreement, cash tax payments and effective tax rates and distributions
from equity investments. 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
continuing deterioration of national and/or local economies;
restrictions on the Company's operations as a result of the Company's
indebtedness; global or local events that could disrupt TV broadcasting;
continuing 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 NBC
Universal; risks associated with acquisitions, including integration of
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; 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 Company's
web site, www.lintv.com,
in the Investor Relations section), or at www.sec.gov,
which discussions 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 TV
LIN TV Corp., along with its subsidiaries, is a local multi-media
company that owns and/or operates 27 network-affiliated broadcast
television stations in 17 U.S. markets and more than 50 interactive
television station and niche web sites. LIN TV's digital advertising and
services agency, RM Media, leverages unique technology, new product
innovation and customized interactive and mobile advertising solutions
to deliver measurable results to local, regional and national clients.
LIN TV Corp. is traded on the New York Stock Exchange under the symbol
"TVL". Financial information about the company is available at www.lintv.com.
1 comScore media metrics data; July-September 2009. Columbus
is not measured by comScore.
2 The Company launched its mobile business in the fourth
quarter of 2008, and therefore cannot make year-over-year comparisons.
- financial tables follow --
LIN TV Corp.
Consolidated Statements of Operations
(unaudited)
Three months ended September 30, Nine months ended September 30,
2009 2008 2009 2008
(in thousands)
Net revenues $ 81,371 $ 98,804 $ 238,363 $ 295,571
Operating costs and expenses:
Direct operating 25,635 28,977 79,083 88,666
Selling, general and administrative 24,727 28,321 75,089 85,157
Amortization of program rights 6,317 5,856 18,221 17,620
Corporate 4,206 3,683 13,193 14,922
General operating expenses 60,885 66,837 185,586 206,365
Depreciation, amortization and other operating charges (benefits):
Depreciation 7,561 7,308 23,135 22,125
Amortization of intangible assets 24 44 64 228
Impairment of goodwill and broadcast licenses - - 39,894 296,972
Restructuring charge - - 498 -
(Gain) loss from asset dispositions (886 ) 74 (3,544 ) (296 )
Operating income (loss) 13,787 24,541 (7,270 ) (229,823 )
Other expense (income):
Interest expense, net 11,259 13,241 32,314 41,554
Share of loss (income) in equity investments 2,000 (662 ) 2,000 (861 )
Loss (income) on extinguishment of debt - 491 (50,149 ) 4,195
Other, net (232 ) 1,036 (176 ) 622
Total other expense (income), net 13,027 14,106 (16,011 ) 45,510
Income (loss) from continuing operations before provision for income taxes 760 10,435 8,741 (275,333 )
Provision for (benefit from) income taxes 1,635 218 9,944 (70,666 )
(Loss) income from continuing operations (875 ) 10,217 (1,203 ) (204,667 )
Discontinued operations:
(Loss) income from discontinued operations, net of gain from the sale ofdiscontinued operations of $11 for the nine months ended September 30, 2009and net of provision for income taxes of $74 for the three months endedSeptember 30, 2008, and net of (benefit from) provision for income taxes of$(628) and $215 for the nine months ended September 30, 2009 and 2008,respectively - (196 ) (446 ) 184
Net (loss) income $ (875 ) $ 10,021 $ (1,649 ) $ (204,483 )
Basic (loss) income per common share:
(Loss) income from continuing operations $ (0.02 ) $ 0.20 $ (0.02 ) $ (4.04 )
(Loss) income from discontinued operations, net of tax - - (0.01 ) 0.01
Net (loss) income $ (0.02 ) $ 0.20 $ (0.03 ) $ (4.03 )
Weighted - average number of common shares outstanding
used in calculating basic (loss) income per common share 51,367 50,620 51,371 50,714
Diluted (loss) income per common share:
(Loss) income from continuing operations $ (0.02 ) $ 0.20 $ (0.02 ) $ (4.04 )
(Loss) income from discontinued operations, net of tax - - (0.01 ) 0.01
Net (loss) income $ (0.02 ) $ 0.20 $ (0.03 ) $ (4.03 )
Weighted - average number of common shares outstanding
used in calculating diluted (loss) income per common share 51,367 50,620 51,371 50,714
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LIN TV Corp.
Consolidated Balance Sheets
(unaudited)
September 30 December 31
2009 2008
(in thousands)
ASSETS
Current assets:
Cash and cash equivalents 11,762 $ 20,106
Restricted cash 2,000 -
Accounts receivable, less allowance for doubtful accounts (2009 - $2,652; 2008 - $2,761) 61,927 68,277
Program rights 2,256 3,311
Assets held for sale - 430
Other current assets 5,705 5,045
Total current assets 83,650 97,169
Property and equipment, net 166,420 180,679
Deferred financing costs 9,304 8,511
Program rights 1,982 3,422
Goodwill 114,486 117,159
Broadcast licenses and other intangible assets, net 392,856 430,142
Assets held for sale - 8,872
Other assets 4,008 6,640
Total assets $ 772,706 $ 852,594
LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS' DEFICIT
Current liabilities:
Current portion of long-term debt $ 15,900 $ 15,900
Accounts payable 4,666 7,988
Accrued expenses 45,727 56,701
Program obligations 10,789 10,109
Liabilities held for sale - 429
Total current liabilities 77,082 91,127
Long-term debt, excluding current portion 664,924 727,453
Deferred income taxes, net 153,382 141,702
Program obligations 2,512 5,336
Other liabilities 63,219 69,226
Total liabilities 961,119 1,034,844
Stockholders' deficit:
Class A common stock, $0.01 par value, 100,000,000 shares authorized,
Issued: 29,684,218 and 29,733,672 shares at September 30, 2009 and December 31, 2008, respectively
Outstanding: 27,877,790 and 27,927,244 shares at September 30, 2009 and December 31, 2008, respectively 294 294
Class B common stock, $0.01 par value, 50,000,000 shares authorized, 23,502,059 shares at September 30,2009 and December 31, 2008, issued and outstanding; convertible into an equal number of shares of Class A orClass C common stock 235 235
Class C common stock, $0.01 par value, 50,000,000 shares authorized, 2 shares at September 30, 2009 andDecember 31, 2008, respectively, issued and outstanding; convertible into an equal number of shares of ClassA common stock - -
Treasury stock, 1,806,428 shares of Class A common stock at September 30, 2009 and December 31, 2008, at cost (18,005 ) (18,005 )
Additional paid-in capital 1,103,364 1,101,919
Accumulated deficit (1,240,739 ) (1,239,090 )
Accumulated other comprehensive loss (33,562 ) (34,634 )
Total stockholders' deficit (188,413 ) (189,281 )
Preferred stock of Banks Broadcasting, Inc. - 7,031
Total deficit (188,413 ) (182,250 )
Total liabilities, preferred stock and stockholders' deficit $ 772,706 $ 852,594
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LIN TV Corp.
Consolidated Statements of Cash Flows
(unaudited)
Nine Months Ended September 30,
2009 2008
(in thousands)
OPERATING ACTIVITIES:
Net loss $ (1,649 ) $ (204,483 )
Loss (income) from discontinued operations 446 (184 )
Adjustment to reconcile net loss to net cash provided by operating activities:
Depreciation 23,135 22,125
Amortization of intangible assets 64 228
Impairment of goodwill, broadcast licenses and broadcast equipment 39,894 296,972
Amortization of financing costs and note discounts 2,945 4,782
Amortization of program rights 18,221 17,620
Program payments (18,322 ) (19,909 )
(Gain) loss on extinguishment of debt (50,149 ) 4,195
Share of loss (income) in equity investments 2,000 (861 )
Deferred income taxes, net 10,462 (71,082 )
Stock-based compensation 1,615 3,583
Gain from asset dispositions (3,539 ) (296 )
Other, net 2,120 25
Changes in operating assets and liabilities, net of acquisitions and disposals:
Accounts receivable 6,350 11,602
Other assets (164 ) 2,104
Accounts payable (3,322 ) (6,822 )
Accrued interest expense 5,914 8,889
Other accrued expenses (17,220 ) (2,076 )
Net cash provided by operating activities, continuing operations 18,801 66,412
Net cash used in operating activities, discontinued operations (101 ) (1,142 )
Net cash provided by operating activities 18,700 65,270
INVESTING ACTIVITIES:
Capital expenditures (4,772 ) (16,314 )
Cash paid for broadcast license rights (7,561 ) -
Change in restricted cash (2,000 ) -
Distributions from equity investments - 2,649
Other investments, net - 401
Net cash used in investing activities, continuing operations A service of YellowBrix, Inc.
