Despite 69% drop-off in political revenue, company sees big gains in e-Media, retrans, local and national ad dollars
Nexstar Broadcasting Group, which owns and/or operates Evansville stations WEHT Local (ABC) and WTVW (Local 7 CW) and Terre Haute stations WTWO (NBC 2) and WAWV-ABC, today reported record financial results for the second quarter and six months ended June 30, 2013.
For the quarter, the company reported record net revenue of $126.2 million, up 40% from $88.9 million in the same period in 2012. Local, national, e-Media and other revenues offset a 69% drop in political revenue for the three months. (Click here for the details.)
“Nexstar’s growth and operating momentum is accelerating in 2013 and we remain confident that continued year-over-year growth in all of our non-political revenue sources in the second half of the year will result in record annual revenue and free cash flow. Reflecting contributions from recently completed acquisitions as well as our focus on managing operations for current cash flow and future growth, all of our non-political revenue sources posted significant second quarter increases leading to record second quarter net revenue, adjusted EBITDA and free cash flow. Nexstar’s year-to-date results and contributions from new stations are as expected and we look forward to the completion later this year of the accretive acquisition of nineteen television stations which was announced in April," said Perry Sook, Nexstar's chairman, president and CEO.
“In summary, Nexstar’s ongoing operating execution and discipline in managing costs, combined with select accretive station transactions have positioned the Company to achieve record revenue and free cash flow in 2013 and beyond. At the same time, our focus on the capital structure and cost of capital have positioned Nexstar with the financial flexibility to further consolidate mid-sized markets and return capital to shareholders while maintaining a favorable leverage profile, which, pro-forma for the completion of all announced transactions is expected to result in a total leverage ratio of approximately 3.5 times at year-end 2014.”
For more details, click past the jump.
Secondary Offering of Common Stock by Selling Stockholders
During the first quarter of 2013, selling stockholders, funds affiliated with ABRY Partners, LLC, completed the sale of 3.45 million shares of the Company’s Class A common stock which followed their fourth quarter 2012 sale of 9.2 million shares of the Company’s Class A common stock. Effective May 7, 2013, Nexstar’s Class B common stockholders converted all of the 4.25 million outstanding Class B common stock into an equal number of Class A common stock, of which 3.9 million shares were held by ABRY. During the second quarter of 2013, selling stockholders, funds affiliated with ABRY Partners, LLC, completed the sale of 3.9 million shares of the Company’s Class A common stock and Nexstar concurrently repurchased 365,384 shares, which were used for stock option exercises in the second quarter of 2013. The Company did not sell any shares in the offerings and did not receive any proceeds from the offerings. As a result of these transactions, no Class B common stock is outstanding and ABRY Partners no longer has an ownership interest in Nexstar.
On July 26, 2013 the Board of Directors declared Nexstar’s third quarterly cash dividend of $0.12 per share of its Class A common stock which will be paid on August 30, to shareholders of record on August 16.
Credit Facility Amendments
On June 28, 2013, Nexstar and Mission entered into amendments to each of their senior secured credit facilities. The amendments provided commitments for incremental term loan facilities available to Nexstar of $144.0 million and to Mission of $90.0 million, subject to reallocation of up to $18.0 million for the benefit of an independent third party, who will acquire two television stations, pursuant to the transaction announced on April 24, 2013 and the terms of the amended credit agreements. On June 28, 2013, Nexstar received initial proceeds of $50.0 million under its incremental term loan facility, which was partially used to repay $27.0 million outstanding revolving loans. The remainder will be used for general corporate purposes.
The consolidated total debt of Nexstar, its wholly owned subsidiaries, and Mission at June 30, 2013, was $994.3 million and senior secured debt was $744.3 million. The company’s total net leverage ratio at June 30, 2013 was 4.69x compared to a total permitted leverage covenant of 7.25x. The company’s first lien net indebtedness ratio at June 30, 2013 was 1.87x compared to the covenant maximum of 3.50x.