Monday, December 11, 2006

Nexstar Selling TV Stations....Which Ones?

The Turner Report, a media blog in Missouri, has an article about Nexstar, the parent company of KARK, KNWA and KTAL, nearing the sale of approximately $50 million worth of television stations. The article doesn't mention any specific stations.

28 Comments:

At 8:33 AM, December 12, 2006, Anonymous Anonymous said...

Nexstar is going down in flames....You can't treat people the way Sook and Lammers do and not think kamra will get you!!!

 
At 8:59 AM, December 12, 2006, Anonymous Anonymous said...

wait, they're on TV... aren't the "kamras" supposed to get them..?

 
At 9:05 AM, December 12, 2006, Anonymous Anonymous said...

You people crack me up. You are in broadcasting, right? Before you comment you should go back to BUSINESS school!

 
At 9:16 AM, December 12, 2006, Anonymous Anonymous said...

Nexstar is feeling the pressure of the WINTER STTTTOOOOOOORRRRRMMMMMM!!!!

 
At 9:42 AM, December 12, 2006, Anonymous Anonymous said...

Nexstar = Love

 
At 12:09 PM, December 12, 2006, Anonymous Anonymous said...

Ok I am a broadcaster but when a company is $600 million in debt, their stock is worth a happy meal i.e. $4.80, and your selling $50 million worth of your stations. How are you in good shape?

Plese explain

 
At 12:52 PM, December 12, 2006, Anonymous Anonymous said...

You DO realize that you are putting some credence in a rabblerousing blogger who really has been disdainful of Nexstars particular station in the Joplin, MO market and blatant champion of another set of stations.
A blogger who could not make it as a newspaper reporter and has never worked for a TV station and does not REALLY know how they work, but feels free to comment on their inner machinations.
A blogger who was turned down for a job at the now-owned Nexstar station.
Ya'll be careful about what you believe on the dern internet...

 
At 1:16 PM, December 12, 2006, Anonymous Anonymous said...

Ok but you can look up Nexstar's debt and it's 6oo million..Next their stock can be looked at daily and it's $4.80.

They are selling 50 million in stations. So where is he wrong?

 
At 2:40 PM, December 12, 2006, Anonymous Anonymous said...

I don't trust bloggers unless they cite sources and make logical conclusions.

Say what you may about the guy in question, but THIS post is an accurate portrayl of what's going on.

So, to take it a step further, if Nexstar is getting more into the internet side of things, look for the stations they sell to have 1) low ratings and 2) poorly managed web content.

So, compare their top-market station website and their bottom market website.

http://www.nbc25.com/ (DMA 8)
http://www.kq2.com/ (DMA 201)

Purely speculation, of course, but it's interesting to think about.

 
At 3:07 PM, December 12, 2006, Anonymous Anonymous said...

Press Release Source: Nexstar Broadcasting Group, Inc.


Nexstar Broadcasting Group Reports Record Setting Third Quarter Operating Results
Wednesday November 8, 7:00 am ET
Third Quarter Net Revenue up 16.3%


IRVING, Texas--(BUSINESS WIRE)--Nexstar Broadcasting Group, Inc. (NASDAQ: NXST - News) today reported third quarter financial results for the period ended September 30, 2006.
ADVERTISEMENT


Summary 2006 Third Quarter Highlights:

Net revenue for the quarter ended September 30, 2006 grew 16.3% to $63.6 million from $54.7 million in the third quarter of 2005. Income from operations for the three months ended September 30, 2006 grew more than three-fold and totaled $9.8 million compared with $3.2 million in the quarter ended September 30, 2005. The Company recorded a basic and diluted net loss per share of $0.14 for the three months ended September 30, 2006 compared with a basic and diluted net loss per share of $0.31 in the third quarter of 2005. During the third quarter 2006, the Company incurred $0.4 million of non-cash employee stock option expense pursuant to its adoption of SFAS No. 123® on January 1, 2006. The Company did not incur any employee stock option expense in the third quarter of 2005.

Broadcast cash flow rose 42.9% to $24.0 million in the third quarter of 2006 compared with $16.8 million in the third quarter of 2005. EBITDA totaled $20.8 million for the third quarter of 2006, a 45.4% increase over the third quarter of 2005, while free cash flow rose to $3.6 million in third quarter of 2006, a $1.2 million increase compared with the third quarter of 2005. "Broadcast cash flow", "EBITDA" and "Free cash flow" are non-GAAP financial measures. For a definition of these measures and reconciliation to GAAP financial results, please see the "Definitions and Disclosure Regarding non-GAAP Financial Information" section and supplemental reconciliation tables at the end of this release.

Third quarter 2006 political advertising revenue was approximately $6.3 million, compared to approximately $0.2 million in the third quarter of 2005. Excluding political advertising, gross local and national advertising revenue for the 2006 third quarter increased by 5.7% compared with the same period in the prior year.

CEO Comment

Perry A. Sook, President and Chief Executive Officer of Nexstar Broadcasting Group, Inc., commented, "Nexstar's third quarter revenue growth of 16.3% demonstrates that we continue to outpace the industry. During the quarter we captured a significant share of the political advertising revenue in our markets, which reflects the strong appeal of our high quality local news programming. Importantly, new local direct billing totaled approximately $3.8 million during the quarter, a company record for this metric.

"Third quarter BCF, EBITDA and free cash flow increases of 43%, 45% and 50%, respectively, clearly highlight the significant leverage in our operating model, our ability to manage costs, and the value of geographic and network diversification. In addition, we continue to make progress in reducing outstanding debt. During the third quarter, the Company's total leverage of outstanding debt to EBITDA at the operating company was reduced by more than a half a turn to 6.7x which compares very favorably to the leverage at December 31, 2005 of 8.3x. With continued strength projected in the 2006 fourth quarter, and reflecting announced transactions, Nexstar is on track to reduce operating company leverage to approximately 6.0 times at year-end.

"Nexstar's emphasis on serving communities in its medium-sized markets has resulted in the development of strong local franchises well positioned to profitably compete for viewers and advertisers in both our core television business and our digital media platforms. Our highly rated local news programming combined with coverage of local events of interest such as sports will be important elements in our emerging digital media strategy. Our Internet businesses are expected to represent the next source of revenue diversification for Nexstar."

Outstanding Debt

At September 30, 2006, the Company's total debt was approximately $640.8 million and cash balances were $13.1 million. As defined per the Company's credit agreement, consolidated total debt was $517.6 million at September 30, 2006, net of cash on hand, which resulted in a leverage ratio of 6.7x, compared to a permitted leverage covenant of 7.5x. Nexstar Broadcasting, Inc., a subsidiary of the Company, and Mission Broadcasting, Inc., are borrowers under the Company's senior secured credit facilities. Covenants under the Company's credit agreement exclude Nexstar Finance Holdings, Inc.'s 11.375% notes, which have accreted to $110.1 million as of September 30, 2006.

Total interest expense in the third quarter of 2006 was $13.2 million, compared to $11.4 million for the same period in 2005. The increase is primarily attributable to higher interest rates under the Company's senior credit facilities, partially offset by a decrease in the amount of bank debt outstanding.

As of September 30, 2006 and 2005, total bank debt under Nexstar's and Mission's senior credit facilities was $333.0 million and $348.5 million, respectively. Cash interest for the third quarter of 2006 was $9.8 million, compared to $8.4 million for the same period in 2005. Cash interest excludes non-cash interest expense related to amortization of debt financing costs and accretion of the discount on Nexstar's 11.375% senior discount notes and 7% senior subordinated notes.

Pending Acquisition

On July 26, 2006, Nexstar announced it had entered into a definitive agreement to acquire substantially all of the assets of WTAJ-TV, the CBS affiliate serving the Johnstown/Altoona, Pennsylvania market for $56.0 million in cash from Television Station Group Holdings, LLC. The purchase price multiple is less than 8.5x the pro forma 2006 broadcast cash flow. The acquisition complements the Company's current Pennsylvania television station cluster located in Wilkes Barre/Scranton and Erie. The transaction, which is subject to FCC consent, could close either in the fourth quarter of 2006 or in the first quarter of 2007.

Summary 2006 Fourth Quarter Outlook

Nexstar today issued the following outlook for the three-month period ending December 31, 2006:

2006 Fourth Quarter Estimates Three Months Ended
(in millions) December 31,
----------------------------------------------------------------------
2006 2005 Approximate
Estimate Actual Change
----------------------------------------------------------------------
Net Revenue $71.0 - $74.0 $62.3 14.0% - 18.8%
----------------------------------------------------------------------
Station Operating Expenses $42.0 - $43.0 $40.9 2.7% - 5.1%
----------------------------------------------------------------------
Corporate Overhead $3.7 - $4.0 $3.7 0.0% - 8.1%
----------------------------------------------------------------------

Net revenue is comprised of gross local, national and political advertising revenue, revenue related to retransmission agreements, trade and barter revenue, and other sources of revenue, less agency commissions. The Company's expectation for net revenue growth of 14.0% to 18.8% for the three months ending December 31, 2006 assumes political revenue of approximately $15 million. In the quarter ended December 31, 2005, the Company recorded gross political advertising revenue of $0.9 million. Station operating expenses include the direct expenses, trade and barter expense and program amortization costs associated with the operation of the Company's television stations. Corporate overhead in the quarter ending December 31, 2006 includes approximately $0.4 million of non-cash employee stock option expense. Prior to 2006, this expense was not included in the Company's financials.

The Company's financial outlook for the quarter ended December 31, 2006 is subject to, and could be affected by: economic developments, regulatory developments, the timing of any investments, dispositions or other transactions, and major news events, among other circumstances. Reference is made to the "Safe Harbor" statement regarding forward-looking comments at the end of this press release. While the Company may, from time to time, issue updated guidance, it assumes no obligation to do so. Certain prior year financial statement amounts have been reclassified to conform to the current year presentation.

Third Quarter Conference Call

Nexstar will host a conference call at 10:00 a.m. EST today. Senior management will discuss the financial results and host a question and answer session. A live audio webcast of the call will be accessible to the public on the Company's web site, www.nexstar.tv. A recording of the webcast will subsequently be archived on the site. The dial in number for the audio conference call is 800/500-6404 (719/457-2735 for international callers); no access code is needed. A replay of the call will be available through November 12, 2006 by dialing 888/203-1112 (719/457-0820 for International callers) and entering access code (4421170).

Definitions and Disclosures Regarding non-GAAP Financial Information

Broadcast cash flow is calculated as income from operations plus corporate expenses, depreciation, amortization of intangible assets and broadcast rights (excluding barter) and loss on asset disposal, net minus broadcast rights payments.

EBITDA is calculated as broadcast cash flow less corporate expenses.

Free cash flow is calculated as income from operations plus depreciation, amortization of intangible assets and broadcast rights (excluding barter), loss on asset disposal, net, and non-cash stock option expense, less payments for broadcast rights, cash interest expense, capital expenditures and net cash income taxes.

Broadcast cash flow, EBITDA and free cash flow results are non-GAAP financial measures. Nexstar believes the presentation of these non-GAAP measures are useful to investors because they are used by lenders to measure the Company's ability to service debt; by industry analysts to determine the market value of stations and their operating performance; by management to identify the cash available to service debt, make strategic acquisitions and investments, maintain capital assets and fund ongoing operations and working capital needs; and, because they reflect the most up-to-date operating results of the stations inclusive of pending acquisitions, TBAs or LMAs. Management believes they also provide an additional basis from which investors can establish forecasts and valuations for the Company's business. For a reconciliation of these non-GAAP financial measurements to the GAAP financial results cited in this news announcement, please see the supplemental tables at the end of this release.

About Nexstar Broadcasting Group, Inc.

Nexstar Broadcasting Group currently owns, operates, programs or provides sales and other services to 47 television stations in 27 markets in the states of Illinois, Indiana, Maryland, Missouri, Montana, Texas, Pennsylvania, Louisiana, Arkansas, Alabama and New York. Nexstar's television station group includes affiliates of NBC, CBS, ABC, FOX and UPN, and reaches approximately 8.0% of all U.S. television households.

Forward-Looking Statements

This news release includes forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events. Forward-looking statements include information preceded by, followed by, or that includes the words "guidance," "believes," "expects," "anticipates," "could," or similar expressions. For these statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The forward-looking statements contained in this news release, concerning, among other things, changes in net revenue, cash flow and operating expenses, involve risks and uncertainties, and are subject to change based on various important factors, including the impact of changes in national and regional economies, our ability to service and refinance our outstanding debt, successful integration of acquired television stations (including achievement of synergies and cost reductions), pricing fluctuations in local and national advertising, future regulatory actions and conditions in the television stations' operating areas, competition from others in the broadcast television markets served by the Company, volatility in programming costs, the effects of governmental regulation of broadcasting, industry consolidation, technological developments and major world news events. Unless required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this news release might not occur. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this release. For more details on factors that could affect these expectations, please see our filings with the Securities and Exchange Commission.

Nexstar Broadcasting Group, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)

Three Months Ended Nine Months Ended
September 30, September 30,
------------------- ---------------------
2006 2005(1) 2006 2005(1)
--------- --------- ----------- ---------
(Unaudited) (Unaudited)
Net revenue (2) $ 63,588 $ 54,674 $ 187,975 $166,648
--------- --------- ----------- ---------

Operating expenses:
Station direct operating
expenses, net of trade
(exclusive of
depreciation and
amortization shown
separately below) 16,173 15,189 47,847 44,462
Selling, general, and
administrative expenses
(exclusive of
depreciation and
amortization shown
separately below) 17,217 15,993 51,374 46,784
Loss on property held for
sale -- -- -- 616
Loss on asset disposal,
net 423 107 503 356
Trade and barter expense 4,304 4,378 13,306 14,313
Corporate expenses 3,163(3) 2,466 10,132 (3) 7,979
Amortization of broadcast
rights, excluding barter 2,082 2,668 6,065 7,649
Amortization of intangible
assets 6,017 6,630 18,123 20,039
Depreciation 4,400 3,996 13,648 12,746
--------- --------- ----------- ---------

Total operating expenses 53,779 51,427 160,998 154,944
--------- --------- ----------- ---------

Income from operations 9,809 3,247 26,977 11,704
Interest expense, including
amortization of debt
financing costs (13,189) (11,364) (38,330) (35,332)
Loss on extinguishment of
debt -- -- -- (15,715)
Interest income 172 61 455 144
Other income (expenses), net -- 424 -- 376
--------- --------- ----------- ---------

Loss before income taxes (3,208) (7,632) (10,898) (38,823)
Income tax expense (733) (1,255) (2,698) (3,800)
--------- --------- ----------- ---------

Net loss $ (3,941) $ (8,887) $ (13,596) $(42,623)
========= ========= =========== =========


Basic and diluted net loss
per share $ (0.14) $ (0.31) $ (0.48) $ (1.50)
Basic and diluted weighted
average number of shares
outstanding 28,379 28,363 28,372 28,363

(1) Certain prior year financial statement amounts have been
reclassified to conform to the current year presentation.
(2) Includes total cash retransmission consent compensation and
retransmission advertising of approximately $3.5 million and $0.7
million for the three months ended September 30, 2006 and 2005,
respectively, and $9.6 million and $1.8 million for the nine months
ended September 30, 2006 and 2005, respectively.
(3) Includes approximately $0.4 million and $1.2 million of non-cash
employee stock option expense for the three and nine months ended
September 30, 2006, respectively. There was no non-cash employee
stock option expense incurred for the three and nine months ended
September 30, 2005.

Nexstar Broadcasting Group, Inc.
Reconciliation Between Actual Consolidated Statements of Operations
and Broadcast Cash Flow and EBITDA (Non-GAAP Measures)
(in thousands)

Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
2006 2005(1) 2006 2005(1)
--------- -------- -------- --------
(Unaudited) (Unaudited)

Income from operations $ 9,809 $ 3,247 $26,977 $11,704
Add:
Depreciation 4,400 3,996 13,648 12,746
Amortization of intangible
assets 6,017 6,630 18,123 20,039
Amortization of broadcast
rights, excluding barter 2,082 2,668 6,065 7,649
Loss on property held for sale -- -- -- 616
Loss on asset disposal, net 423 107 503 356
Corporate expenses 3,163 2,466 10,132 7,979

Less:
Payments for broadcast rights 1,900 2,323 6,109 7,320
--------- -------- -------- --------

Broadcast cash flow $23,994 $16,791 $69,339 $53,769

Less:
Corporate expenses 3,163 2,466 10,132 7,979
--------- -------- -------- --------
EBITDA $20,831 $14,325 $59,207 $45,790
========= ======== ======== ========

Nexstar Broadcasting Group, Inc.
Reconciliation Between Actual Consolidated Statements of Operations
and Free Cash Flow (Non-GAAP Measure)
(in thousands)

Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
2006 2005(1) 2006 2005(1)
--------- -------- -------- --------
(Unaudited) (Unaudited)

Income from operations $9,809 $3,247 $26,977 $11,704
Add:
Depreciation 4,400 3,996 13,648 12,746
Amortization of intangible
assets 6,017 6,630 18,123 20,039
Amortization of broadcast
rights, excluding barter 2,082 2,668 6,065 7,649
Loss on property held for sale -- -- -- 616
Loss on asset disposal, net 423 107 503 356
Non-cash stock option expense 434 -- 1,259 --

Less:
Payments for broadcast rights 1,900 2,323 6,109 7,320
Cash interest expense 9,819 8,360 28,561 26,374
Capital expenditures 7,810 3,539 16,741 10,644
Cash income taxes, net of
refunds -- 18 31 (108)
--------- -------- -------- --------

Free Cash Flow $3,636 $2,408 $15,133 $ 8,880
========= ======== ======== ========

(1) Certain prior year financial statement amounts have been
reclassified to conform to the current year presentation.



Contact:
Nexstar Broadcasting Group, Inc.
Matthew E. Devine, Chief Financial Officer, 972-373-8800
Or
Jaffoni & Collins Incorporated
Joseph Jaffoni / Ratula Roy, 212-835-8500
nxst@jcir.com

 
At 3:12 PM, December 12, 2006, Anonymous Anonymous said...

You people crack me up. You are in broadcasting, right? Before you comment you should go back to BUSINESS school!
---------------------

But its you people in business school that are ruining the news. Short term gains over long term substainability. Love that business model!

 
At 3:30 PM, December 12, 2006, Anonymous The Donald said...

Always has worked for me

 
At 3:48 PM, December 12, 2006, Anonymous Anonymous said...

I know Duane Lammers and Perry Sook to be slimy. They don't tell the truth. If you don't believe look at how many lawsuit they have lost or settled. If you are right you don't settled.

I have heard Lammers say don't "worry about the numbers I will get them screw Nielson."

These are guys have no ethics!
Lammers use such bad foul lanugue I am suprise he hasn't been sued more.

 
At 5:03 PM, December 12, 2006, Anonymous Anonymous said...

what happend to Jason Friedman? I saw this article today online from June 17th?

http://www.redorbit.com/news/technology/541215/ax_falls_at_wdaf_newsroom/index.html?source=r_technology

 
At 5:07 PM, December 12, 2006, Anonymous Anonymous said...

Thanks for the link to my blog. I have also had occasion to cite Arkansas News Watch two or three times in the past and have always been a reader. I normally would not respond to the anonymous cheap shot artist, but since his or her comments about me were extremely misleading, I feel I have an obligation to do so. I was turned down for a job at KODE 27 years ago when Nexstar was still more than two decades away from owning the station. As for being a failed newspaper reporter, perhaps my definition of failure differs from the anonymous reader. I spent 22 years as a newspaper reporter and editor, winning more than 100 reporting awards, including four straight Missouri Press Association awards for best investigative reporting. I have been extremely critical of Nexstar's operation at KSNF, but have sung the praises of KODE numerous times in recent months. Thanks for allowing me to respond. But you know now that I think about it, the station that turned me down 27 years ago was KODE, which is supposedly owned by Mission Broadcasting. I am shocked to hear that it is a Nexstar station. Next, you will be telling me there is no Santa Claus.

 
At 3:09 PM, December 14, 2006, Anonymous Anonymous said...

Nexstar does suck! They should treat their employees better! WOW! Maybe if KNWA/KTAL/KARK is sold, maybe the people would be happier.

 
At 3:55 PM, December 14, 2006, Anonymous Anonymous said...

I'm sure that's what all the people sai when they were released from KATV a few ago. How do you think Fox employees are feeling right now about their ownership? Oh and yes KTHV....no one is evr happy there. It might just be a bunch of unhappy people that need to get out of the business instead of the ownerships.

 
At 4:08 PM, December 14, 2006, Anonymous Anonymous said...

The Nexstar bashers are clearly not Nexstar employees. Why not ask a Nexstar employee how they feel about their product, their leadership and their futures. I work at a Nexstar station and I know from experience you will never make everyone happy, but most everyone I work with everyday are satisfied with their jobs, product and management.

 
At 7:22 PM, December 14, 2006, Anonymous Anonymous said...

Need to sell KARK and fire everyone and clean house,I will send a e-mail to NEXTSTAR and tell them to do just that.
Well start shaking in your boot's because i am on the NEXTSTAR Board of Director'S

 
At 7:23 PM, December 14, 2006, Anonymous Anonymous said...

This is from Guess Who???

 
At 7:26 PM, December 14, 2006, Anonymous Anonymous said...

Get rid of The Chief photographer Matt (Ignorant Boy) Thibault.

 
At 11:29 PM, December 14, 2006, Anonymous Anonymous said...

well Board of Directors guy, you should take a visit up to KNWA/KFTA. They are running on minimal staff while the main concern is whether or not the GM is happy with his new condo oops, I mean office..

 
At 4:44 PM, December 15, 2006, Anonymous Anonymous said...

If your getting rid of people you might want to start with the News Manager, News Director, GM, and the person in charge of production at KTAL.

 
At 5:33 PM, December 15, 2006, Anonymous Anonymous said...

First one who needs to go is the News Director at KNWA.

 
At 9:48 AM, December 16, 2006, Anonymous Anonymous said...

Ok this sums up Nexstar. An employee has a major medical problem and they FIRE HER!!!!!

Does anything else need to be said about this crappy company?

 
At 8:34 PM, December 16, 2006, Anonymous Anonymous said...

I love my company. If you don't, sorry. What about a station that has a bad book and blames others in the building and then fires several people from a knee jerk reaction. (KATV) Enough said.

 
At 11:36 PM, December 16, 2006, Anonymous Anonymous said...

A little assumption on why she was fired there. Why don't we wait until we get an answer why and then jump to conclusions about what the station did or didn't do. Great work their journalist.

 
At 1:23 AM, December 19, 2006, Anonymous Anonymous said...

there = location, reference

their = posessive

Maybe you should learn how to write before you crack on others about journalistic abilities.

 

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