Welcome!

News Feed Item

Sinclair Reports Fourth Quarter 2013 Financial Results

- REPORTS $0.29 ADJUSTED DILUTED EARNINGS PER SHARE

BALTIMORE, Feb. 12, 2014 /PRNewswire/ -- Sinclair Broadcast Group, Inc. (Nasdaq: SBGI), the "Company" or "Sinclair," today reported financial results for the three months and twelve months ended December 31, 2013. 

"2013 was a historic year for us, including growing broadcast revenues 32.3% to a record-breaking $1.2 billion, and once again leading the industry on station acquisitions," commented David Smith, President and CEO of Sinclair.  "During the year we closed on the purchase of 63 television stations and added over $1.0 billion in assets, which contributed $148.4 million in revenues in 2013.  We benefited from 6.9% same station growth in our largest advertising category, automotive, 143% as reported growth in digital interactive, and continued growth in net retransmission revenues and core time sales."  

Three Months Ended December 31, 2013 Financial Results:

  • Net broadcast revenues from continuing operations increased 33.2% to $382.3 million, versus $287.1 million in the prior year period. 
  • Operating income was $103.3 million, a decrease of 13.3% versus $119.1 million in the prior year period, due to the absence of political revenues in a non-election year, one-time acquisition costs incurred during the quarter and a loss on the sale of our Syracuse station of $3.3 million
  • Net income attributable to the Company was $2.3 million, which includes a $42.1 million loss on extinguishment of debt, versus net income of $59.0 million in the prior year period.    
  • Diluted earnings per common share was $0.02 compared to $0.72 in the prior year period.  Excluding the loss from extinguishment of debt, diluted earnings per common share would have been $0.29 for the fourth quarter of 2013. 

Year Ended December 31, 2013 Financial Results:

  • Net broadcast revenues from continuing operations increased 32.3% to $1,217.5 million, versus $920.6 million in the prior year period. 
  • Operating income was $324.0 million, a decrease of 1.6% versus $329.3 million in the prior year period. 
  • Net income attributable to the Company was $73.5 million, which reflects $58.2 million of loss on the extinguishment of debt, versus net income of $144.7 million in the prior year period. 
  • Diluted earnings per common share were $0.78 compared to $1.78 in the prior year period.  Excluding the loss from extinguishment of debt, diluted earnings per common share would have been $1.18 for the year ended December 31, 2013. 

Three Months Ended December 31, 2013 Operating Highlights:

  • Political revenues were $6.7 million versus $54.1 million in the fourth quarter of 2012.
  • Local net broadcast revenues, which include local time sales, retransmission revenues, and other broadcast revenues, were up 58.1%, while national net broadcast revenues, which include national time sales and other national broadcast revenues, were down 14.2% versus the fourth quarter of 2012 due to the absence of political revenues in a non-election year. 
  • Excluding political revenues, local net broadcast revenues increased 64.4% and national net broadcast revenues increased 50.3% versus the fourth quarter of 2012. 
  • On a same station basis, excluding political revenues, local net broadcast revenues were up 10.8%, while national net broadcast revenues were down 3.1%, versus the fourth quarter of 2012, in part due to account shifts from national to local.
  • Fastest growing advertising categories, on a same station basis, included automotive, which was up 5.4%, services, medical, grocery, entertainment, and home products.  Categories that declined were retail, direct response, telecommunications and restaurants.  

Recent Corporate Developments

  • On October 1, 2013, the Company closed on the purchase of KDBC (CBS) in El Paso, Texas for $21.4 million.
  • On October 31, 2013, the Company closed on the purchase of the non-license assets of WPFO (FOX) in Portland, Maine for $13.6 million and entered into an agreement to provide sales and other services to the station.
  • On November 21, 2013, the Company closed on the purchase of the non-license assets of KRNV (NBC) in Reno, Nevada and KENV, its simulcast in the Salt Lake City market, for $26.0 million and entered into an agreement to provide sales and other services to the stations. 
  • On November 22, 2013, the Company closed on the acquisition of 18 television stations owned by Barrington Broadcasting Group, LLC ("Barrington") for $370.0 million and entered into agreements to operate or provide sales and other services to another six stations.  The Company sold its station in Syracuse, New York, WSYT (FOX), and assigned its local marketing agreement ("LMA") and purchase option on WNYS (MNT) in Syracuse, New York to Bristlecone Broadcasting.  The Company also sold its station in Peoria, Illinois, WYZZ (FOX), to Cunningham Broadcasting Corporation.  The combined sales price for the stations was $37.0 million less working capital adjustments.
  • In February 2014, the Company entered into an agreement in principal for a $0.5 million investment, purchasing Series A Preferred Units of Timeline Labs, and anticipates utilizing their products on 15 of our news-producing stations.  Timeline Labs specializes in proprietary tools that discover, measure, and display trending social content in real time in such a way as to allow these items to be incorporated into live newscasts and shows.

Balance Sheet and Cash Flow Highlights:

  • Debt on the balance sheet, net of $280.1 million in cash and cash equivalents, was $2,753.9 million at December 31, 2013 versus net debt of $2,245.9 million at September 30, 2013. 
  • On October 11, 2013, the Company's wholly-owned subsidiary, Sinclair Television Group, Inc. ("STG"), closed on an offering of $350.0 million of 6.375% Senior Unsecured Notes due 2021.
  • On October 23, 2013, the Company's wholly-owned subsidiary, STG, amended and upsized its Bank Credit Facility with an additional $57.5 million in revolving line of credit commitment, a $250 million incremental term loan B, and an incremental $200 million delayed draw term loan A.
  • On October 12, 2013, the Company's wholly-owned subsidiary, STG, redeemed its $500 million, 9.25% Second Lien Notes due 2017 from the proceeds of the 6.375% Notes and the $250 million incremental term loan B.  As a result of the transaction, the Company recognized a $43.1 million loss on extinguishment of debt.
  • On October 24, 2013, holders of $5.4 million original principal value of the Company's 3.0% Convertible Senior Notes due 2027 converted their Notes.  The conversion was settled in $10.5 million cash pursuant to the indenture governing the notes.
  • As of December 31, 2013, 74.2 million Class A common shares and 26.0 million Class B common shares were outstanding, for a total of 100.2 million common shares outstanding.
  • In December 2013, the Company paid a $0.15 per share quarterly cash dividend to its shareholders. 
  • Capital expenditures in the fourth quarter 2013 were $16.6 million.
  • Program contract payments were $23.0 million in the fourth quarter 2013.

Notes:

Presentation of financial information for the prior year has been reclassified to conform with the presentation of generally accepted accounting principles for the current year.

Outlook:

The term "Acquisition(s)" in this Outlook section refers to the forecasted results of the COX stations through April 30, 2014; WUTB through May 31, 2014; the Fisher stations through July 31, 2014, the Titan and El Paso stations through September 30, 2014, the Portland, ME station through October 31, 2014, and the Reno, NV station and Barrington stations through November 30, 2014, as the results of these acquired stations were not included in the corresponding 2013 periods, pre-acquisition.  The Allbritton and New Age stations are not included in the Outlook section as they have not yet closed.  The term "same station basis" excludes the Acquisitions defined above for those stated periods. 

"First quarter advertising has been slowed by the severe weather affecting most of the east coast, northeast and mid-west regions where we have a large concentration of stations," commented David Amy, Executive Vice President and Chief Financial Officer.  "As no surprise, the frigid arctic temperatures and snow storms have caused those businesses that rely on store traffic, such as retail, fast food and restaurants, to reduce their advertising spending.  It is unclear at this point if they will redeploy those budgets later in the quarter or the year.  On a positive note, we benefited from the Super Bowl airing on FOX this quarter, generating $8.2 million in incremental revenues versus last year when it was on CBS and generated an incremental $2.5 million.  We are also expecting an additional $3.6 million in Olympic revenues this February, as it airs on our NBC stations."

The Company currently expects to achieve the following results for the three months ending March 31, 2014 and year ending December 31, 2014, as follows:

First Quarter 2014

  • Net broadcast revenues from continuing operations, before barter, are expected to be approximately $366.8 million to $371.2 million, up 45.0% to 46.8% year-over-year.  Embedded in these anticipated results are:
    • Net revenues of $109.3 million related to the Acquisitions. 
    • $4.2 million in political revenues as compared to $0.9 million in the first quarter 2013.
    • Total same station net broadcast revenues are estimated to be up 1.8% to 3.6% versus the same period in 2013.
    • Excluding the Acquisitions and excluding political revenues, same station net broadcast revenues are estimated to be up 0.9% to 2.6% versus the first quarter of 2013. 
  • Barter and trade revenue are expected to be approximately $21.5 million.
  • Barter expense is expected to be approximately $19.1 million.  Trade expense is included in television expenses (defined below).
  • Station production expenses and station selling, general and administrative expenses (together, "television expenses"), excluding barter expense but including trade expense of $2.4 million, are expected to be approximately $217.0 million, which assumes $74.0 million related to the acquisitions for the quarter.  Trade expense has historically been forecasted with barter expense but is currently forecasted in television expenses.
    • Excluding the Acquisitions, same station television expenses are expected to be up approximately 8.0%.
  • Program contract amortization expenses are expected to be approximately $25.2 million, which assumes $4.2 million related to the Acquisitions.
  • Program contract payments are expected to be approximately $23.5 million, which assumes $4.3 million related to the Acquisitions.
  • Corporate overhead is expected to be approximately $20.2 million, which includes $8.0 million of stock-based compensation. 
  • Other operating division revenues less other operating division expenses are expected to be $2.4 million of income, assuming current equity interests.
  • Depreciation on property and equipment is expected to be approximately $24.3 million, assuming the capital expenditure assumption below.
  • Amortization of acquired intangibles is expected to be approximately $22.4 million.  
  • Net interest expense is expected to be approximately $39.6 million, assuming no changes in the current interest rate yield curve and changes in debt levels based on the assumptions discussed in this "Outlook" section and the recent redemptions and financings. 
  • Cash taxes paid are expected to be approximately $5.6 million, based on the assumptions discussed in this "Outlook" section.  The Company's effective tax rate is expected to be approximately 34.0%.
  • Capital expenditures are expected to be approximately $13.9 million.

Full Year 2014

  • Net broadcast revenues from continuing operations, before barter, are expected to be approximately $1.675 billion to $1.695 billion, up 37.6% to 39.2% year-over-year.  Embedded in these anticipated results are:
    • Net revenues of $346.3 million related to the Acquisitions. 
    • Approximately $122.5 million in political revenues as compared to $11.8 million in 2013. 
    • Total same station net broadcast revenues are estimated to be up 9.2% to 10.8% versus the same period in 2013.
    • Excluding the Acquisitions and political revenues, same station net broadcast revenues are estimated to be up 1.5% to 3.2% versus 2013. 
  • Barter and trade revenue is expected to be approximately $98.5 million
  • Barter expense is expected to be approximately $86.5 million.
  • Station production expenses and station selling, general and administrative expenses (together, "television expenses"), excluding barter expense but including trade expense of $12.0 million, are expected to be approximately $897.0 million, which assumes $208.1 million related to the acquisitions for the year.  
    • Stock based compensation expense is expected to be $3.1 million.  
    • Excluding the acquisitions, same station television expenses are expected to be up approximately 8.6%.
  • Program contract amortization expense is expected to be approximately $105.0 million, which assumes $11.8 million related to the Acquisitions.
  • Program contract payments are expected to be approximately $92.7 million, which assumes $11.8 million related to the Acquisitions.
  • Corporate overhead is expected to be approximately $59.2 million
    • Stock-based compensation expense is expected to be approximately $11.7 million
  • Other operating division revenues less other operating division expenses are expected to be $17.4 million of income, assuming current equity interests.
  • Depreciation on property and equipment is expected to be approximately $94.5 million, assuming the capital expenditure assumption below.
  • Amortization of acquired intangibles is expected to be approximately $90.0 million.  
  • Net interest expense is expected to be approximately $157.8 million (approximately $149.6 million on a cash basis), assuming no changes in the current interest rate yield curve and changes in debt levels based on the assumptions discussed in this "Outlook" section. 
  • Cash taxes paid are expected to be approximately $84.1 million based on the assumptions discussed in this "Outlook" section.  The Company's effective tax rate is expected to be approximately 34.1%. 
  • Capital expenditures are expected to be $69.1 million, which assumes $19.7 million related to the Barrington stations, $7 million in HD news and master control upgrades, and $9 million in building consolidation projects.

"Discontinued Operations" accounting has been adopted in the financial statements for all periods presented in this press release for the sale of WLAJ-TV, our ABC affiliate in Lansing, Michigan which closed in March 2013, and for the sale of WLWC-TV, our CW affiliate in the Providence, RI/New Bedford, MA market which closed in April 2013.  Therefore, the related results from operations, net of related income taxes, have been reclassified from income from continuing operations and reflected as net income from discontinued operations.  Prior current year amounts have been reclassified to conform to current year GAAP presentation.

Sinclair Conference Call:

The senior management of Sinclair will hold a conference call to discuss its fourth quarter 2013 results on Wednesday, February 12, 2014, at 9:30 a.m. ET.  After the call, an audio replay will be available at www.sbgi.net under "Investor Information/Earnings Webcast."  The press and the public will be welcome on the call in a listen-only mode.  The dial-in number is (877) 407-8033.

About Sinclair:

On a pro forma basis assuming consummation of all announced transactions, Sinclair Broadcast Group, Inc., the largest and one of the most diversified television broadcasting companies, will own and operate, program or provide sales services to 166 television stations in 77 markets.  Sinclair's television group will reach approximately 38.7% of U.S. television households (24.3% based on the FCC's calculation with the UHF discount) and will be affiliated with all major networks.  Sinclair's television portfolio will include 41 FOX, 28 ABC, 26 CBS, 25 CW, 22 MNT, 17 NBC, 5 Univision, one Azteca, and one independent station.  Sinclair owns equity interests in broadcast transmission-related companies and various non-broadcast related companies.  The Company regularly uses its website as a key source of Company information which can be accessed at www.sbgi.net.

Forward-Looking Statements: 

The matters discussed in this news release, particularly those in the section labeled "Outlook," include forward-looking statements regarding, among other things, future operating results.  When used in this news release, the words "outlook," "intends to," "believes," "anticipates," "expects," "achieves," "estimates," and similar expressions are intended to identify forward-looking statements.  Such statements are subject to a number of risks and uncertainties.  Actual results in the future could differ materially and adversely from those described in the forward-looking statements as a result of various important factors, including, but not limited to, the impact of changes in national and regional economies, the volatility in the U.S. and global economies and financial credit markets which impact our ability to forecast, our ability to integrate acquired businesses and maximize operating synergies, our ability to obtain necessary governmental approvals and financing for announced acquisitions, successful execution of outsourcing agreements, pricing and demand fluctuations in local and national advertising, volatility in programming costs, the market's acceptance of new programming and performance of, the CW Television Network and MyNetworkTV programming, our news share strategy, our local sales initiatives, the execution of retransmission consent agreements, our ability to identify and consummate investments in attractive non-television assets and to achieve anticipated returns on those investments once consummated, and any other risk factors set forth in the Company's most recent reports on Form 10-Q, Form 10-K and Form 8-K, as filed with the Securities and Exchange Commission.  There can be no assurances that the assumptions and other factors referred to in this release will occur.  The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements except as required by law.

Sinclair Broadcast Group, Inc. and Subsidiaries

Preliminary Unaudited Consolidated Statements of Operations

(in thousands, except per share data)



Three Months Ended

December 31,


Twelve Months Ended December 31,


2013


2012


2013


2012

REVENUES:








Station broadcast revenues, net of agency commissions

$    382,281


$    287,100


$  1,217,504


$    920,593

Revenues realized from station barter arrangements

27,750


26,845


88,680


86,905

Other operating divisions revenues

17,684


15,572


56,947


54,181

Total revenues

427,715


329,517


1,363,131


1,061,679

OPERATING EXPENSES:








Station production expenses

120,038


71,458


385,104


255,556

Station selling, general and administrative expenses

78,382


50,817


249,732


171,279

Expenses recognized from station barter arrangements

23,871


24,715


77,349


79,834

Amortization of program contract costs and net realizable

 value adjustments

24,179


17,425


80,925


60,990

Other operating divisions expenses

14,758


13,014


48,109


46,179

Depreciation of property and equipment

23,446


13,042


70,554


47,073

Corporate general and administrative expenses

14,320


8,225


53,126


33,391

Amortization of definite-lived intangible and other assets

22,093


11,724


70,820


38,099

Loss (gain) on assets dispositions

3,342


24


3,392


(7)

Total operating expenses

324,429


210,444


1,039,111


732,394

Operating income

103,286


119,073


324,020


329,285

OTHER INCOME (EXPENSE):








Interest expense and amortization of debt discount and

 deferred financing costs

(39,908)


(36,552)


(162,937)


(128,553)

Loss from extinguishment of debt

(42,138)



(58,421)


(335)

Income from equity and cost method investments

506


1,327


621


9,670

Other income, net

748


571


2,225


2,273

Total other expense

(80,792)


(34,654)


(218,512)


(116,945)

Income from continuing operations before income taxes

22,494


84,419


105,508


212,340

INCOME TAX PROVISION

(18,257)


(25,667)


(41,249)


(67,852)

Income from continuing operations

4,237


58,752


64,259


144,488

DISCONTINUED OPERATIONS:








Income (loss) from discontinued operations, includes income

 tax benefit (provision) of $0, $444, $10,806 and $663,

 respectively


643


11,558


465

NET INCOME

4,237


59,395


75,817


144,953

Net (income) loss attributable to the noncontrolling interests

(1,934)


(393)


(2,349)


(287)

NET INCOME ATTRIBUTABLE TO SINCLAIR

 BROADCAST GROUP

$        2,303


$      59,002


$      73,468


$    144,666

Dividends declared per share

$           0.15


$           1.15


$            0.60


$           1.54









EARNINGS PER COMMON SHARE ATTRIBUTABLE TO

 SINCLAIR BROADCAST GROUP:








Basic earnings per share from continuing operations

$           0.02


$          0.72


$          0.66


$          1.78

Basic earnings per share from discontinued operations

$          0.00


$          0.01


$          0.12


$          0.01

Basic earnings per share

$           0.02


$          0.73


$          0.79


$          1.79

Diluted earnings per share from continuing operations

$           0.02


$          0.72


$          0.66


$          1.78

Diluted earnings per share from discontinued operations

$          0.00


$          0.01


$          0.12


$          0.01

Diluted earnings per share

$          0.02


$          0.73


$          0.78


$          1.78

Weighted average common shares outstanding

99,802


81,109


93,207


81,020

Weighted average common and common equivalent shares

 outstanding

100,654


81,440


93,845


81,310









AMOUNTS ATTRIBUTABLE TO SINCLAIR BROADCAST

 GROUP COMMON SHAREHOLDERS:








Income from continuing operations, net of tax

$         2,303


$       58,359


$      61,910


$    144,201

Loss from discontinued operations, net of tax


643


11,558


465

Net income

$         2,303


$       59,002


$      73,468


$    144,666

 

SOURCE Sinclair Broadcast Group, Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
In this presentation, you will learn first hand what works and what doesn't while architecting and deploying OpenStack. Some of the topics will include:- best practices for creating repeatable deployments of OpenStack- multi-site considerations- how to customize OpenStack to integrate with your existing systems and security best practices.
In an era of historic innovation fueled by unprecedented access to data and technology, the low cost and risk of entering new markets has leveled the playing field for business. Today, any ambitious innovator can easily introduce a new application or product that can reinvent business models and transform the client experience. In their Day 2 Keynote at 19th Cloud Expo, Mercer Rowe, IBM Vice President of Strategic Alliances, and Raejeanne Skillern, Intel Vice President of Data Center Group and G...
"DevOps is set to be one of the most profound disruptions to hit IT in decades," said Andi Mann. "It is a natural extension of cloud computing, and I have seen both firsthand and in independent research the fantastic results DevOps delivers. So I am excited to help the great team at @DevOpsSUMMIT and CloudEXPO tell the world how they can leverage this emerging disruptive trend."
The current age of digital transformation means that IT organizations must adapt their toolset to cover all digital experiences, beyond just the end users’. Today’s businesses can no longer focus solely on the digital interactions they manage with employees or customers; they must now contend with non-traditional factors. Whether it's the power of brand to make or break a company, the need to monitor across all locations 24/7, or the ability to proactively resolve issues, companies must adapt to...
You want to start your DevOps journey but where do you begin? Do you say DevOps loudly 5 times while looking in the mirror and it suddenly appears? Do you hire someone? Do you upskill your existing team? Here are some tips to help support your DevOps transformation. Conor Delanbanque has been involved with building & scaling teams in the DevOps space globally. He is the Head of DevOps Practice at MThree Consulting, a global technology consultancy. Conor founded the Future of DevOps Thought Leade...
DXWorldEXPO LLC announced today that ICC-USA, a computer systems integrator and server manufacturing company focused on developing products and product appliances, will exhibit at the 22nd International CloudEXPO | DXWorldEXPO. DXWordEXPO New York 2018, colocated with CloudEXPO New York 2018 will be held November 11-13, 2018, in New York City. ICC is a computer systems integrator and server manufacturing company focused on developing products and product appliances to meet a wide range of ...
René Bostic is the Technical VP of the IBM Cloud Unit in North America. Enjoying her career with IBM during the modern millennial technological era, she is an expert in cloud computing, DevOps and emerging cloud technologies such as Blockchain. Her strengths and core competencies include a proven record of accomplishments in consensus building at all levels to assess, plan, and implement enterprise and cloud computing solutions. René is a member of the Society of Women Engineers (SWE) and a m...
In his session at 20th Cloud Expo, Mike Johnston, an infrastructure engineer at Supergiant.io, discussed how to use Kubernetes to set up a SaaS infrastructure for your business. Mike Johnston is an infrastructure engineer at Supergiant.io with over 12 years of experience designing, deploying, and maintaining server and workstation infrastructure at all scales. He has experience with brick and mortar data centers as well as cloud providers like Digital Ocean, Amazon Web Services, and Rackspace. H...
Everyone wants the rainbow - reduced IT costs, scalability, continuity, flexibility, manageability, and innovation. But in order to get to that collaboration rainbow, you need the cloud! In this presentation, we'll cover three areas: First - the rainbow of benefits from cloud collaboration. There are many different reasons why more and more companies and institutions are moving to the cloud. Benefits include: cost savings (reducing on-prem infrastructure, reducing data center foot print, redu...
DXWorldEXPO | CloudEXPO are the world's most influential, independent events where Cloud Computing was coined and where technology buyers and vendors meet to experience and discuss the big picture of Digital Transformation and all of the strategies, tactics, and tools they need to realize their goals. Sponsors of DXWorldEXPO | CloudEXPO benefit from unmatched branding, profile building and lead generation opportunities.
Founded in 2000, Chetu Inc. is a global provider of customized software development solutions and IT staff augmentation services for software technology providers. By providing clients with unparalleled niche technology expertise and industry experience, Chetu has become the premiere long-term, back-end software development partner for start-ups, SMBs, and Fortune 500 companies. Chetu is headquartered in Plantation, Florida, with thirteen offices throughout the U.S. and abroad.
DevOpsSummit New York 2018, colocated with CloudEXPO | DXWorldEXPO New York 2018 will be held November 11-13, 2018, in New York City. Digital Transformation (DX) is a major focus with the introduction of DXWorldEXPO within the program. Successful transformation requires a laser focus on being data-driven and on using all the tools available that enable transformation if they plan to survive over the long term.
The technologies behind big data and cloud computing are converging quickly, offering businesses new capabilities for fast, easy, wide-ranging access to data. However, to capitalize on the cost-efficiencies and time-to-value opportunities of analytics in the cloud, big data and cloud technologies must be integrated and managed properly. Pythian's Director of Big Data and Data Science, Danil Zburivsky will explore: The main technology components and best practices being deployed to take advantage...
Most DevOps journeys involve several phases of maturity. Research shows that the inflection point where organizations begin to see maximum value is when they implement tight integration deploying their code to their infrastructure. Success at this level is the last barrier to at-will deployment. Storage, for instance, is more capable than where we read and write data. In his session at @DevOpsSummit at 20th Cloud Expo, Josh Atwell, a Developer Advocate for NetApp, will discuss the role and value...
CloudEXPO New York 2018, colocated with DXWorldEXPO New York 2018 will be held November 11-13, 2018, in New York City and will bring together Cloud Computing, FinTech and Blockchain, Digital Transformation, Big Data, Internet of Things, DevOps, AI, Machine Learning and WebRTC to one location.