Media General, Inc.

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Media General Reports Fourth-Quarter 2012 Results

RICHMOND, Va., Jan. 31, 2013 /PRNewswire/ -- Media General, Inc. (NYSE: MEG), a broadcast television and digital media company, today reported fourth-quarter 2012 operating income of $42.3 million, more than 2.5 times greater than fourth-quarter 2011 operating income of $16.3 million. Net income in the fourth quarter was $17.6 million, or 62 cents per share, compared with a net loss of $3.3 million, or 15 cents per share, in the prior year.

George L. Mahoney, president and chief executive officer of Media General, said, "Media General had an exceptional fourth quarter, marked by 40% revenue growth.  Record Political advertising was $30 million.  Core Local and National advertising revenues, excluding Political, increased 4%.  Media General was particularly well positioned to maximize Political advertising opportunities, with six of our stations located in four of the key battleground states. Broadcast cash flow in the fourth quarter was $50.4 million, with a margin of 46%," said Mr. Mahoney.

Starting with the full-year 2013, Media General's fiscal year will be a conventional calendar year (Jan. 1 – Dec. 31).  Previously, the company's fiscal year ended on the last Sunday in December, a newspaper industry practice.  Fiscal year 2012 began on December 26, 2011 and ended on December 31, 2012.  Fiscal year 2011 began on December 27, 2010 and ended on December 25, 2011.

Total revenues in the fourth quarter of 2012 were $108.7 million compared with $77.9 million in the prior year. Local gross time sales increased 5.3% to $50.7 million. National gross time sales grew 1.4% to $25.2 million. The largest advertising category, automotive, increased 21%. Other key categories with strong growth in the quarter included entertainment, home improvement and furniture.

Cable and satellite retransmission fees rose 84.3% to $9.9 million, as a result of contract renewals in late 2011 that included higher rates. Digital revenues increased 18.8% to $2.7 million, driven primarily by Local advertising, which grew 16%.

Higher station operating costs in the fourth quarter reflected an increase in commissions from the strong revenue performance, higher NBC affiliate fees, a five-day furlough repayment in December 2012, and prior-year savings of nearly $2 million from a companywide furlough program.

Corporate expense of $101,000 in the fourth quarter compared with $9.6 million last year, and included two large non-recurring gains in the current quarter.  The gains included a non-cash curtailment of more than $2 million resulting from former newspaper employees leaving the company's post-retirement plans, and a $5 million non-cash gain resulting from outsourcing disability coverage for substantially all Medicare eligible participants to a third party.   

Total interest expense in the fourth quarter was $21 million, compared with $14.6 million last year. In the current quarter, cash interest paid was $16.7 million, non-cash interest expense was $2.6 million, and accrued but not paid cash interest was $1.7 million.

Noncash tax expense was $3.4 million in the fourth quarter, compared with $6.2 million in the prior year. The lower tax expense was primarily due to the absence of an intraperiod tax allocation made between continuing operations and Other Comprehensive Income that was recorded in the fourth quarter of last year.

EBITDA from continuing operations (income before interest, debt modification and extinguishment costs, taxes, and depreciation and amortization) was $48.1 million, compared with $23.8 million in the 2011 period.

Media General provides the non-GAAP financial metrics: Broadcast cash flow, EBITDA from continuing operations, After-tax cash flow from continuing operations, and Free cash flow. The company believes these metrics are alternative measures used in peer comparison and by lenders, investors, financial analysts and rating agencies to evaluate a company's ability to service its debt requirements and to estimate the value of the company. A reconciliation of these metrics to amounts on the GAAP statements has been included in this news release.

Conference Call and Webcast

The company will hold a conference call with financial analysts today at 2:30 p.m. ET. To dial in to the call, listeners may call 866-831-6234 about 10 minutes prior to the 2:30 p.m. start. The participant passcode is "Media General."

Listeners may also access a live webcast by logging on to www.mediageneral.com and clicking on the "Live Webcast" link on the homepage about 10 minutes in advance. A replay of the webcast will be available online at www.mediageneral.com beginning at 3:30 p.m. today. A telephone replay will also be available, beginning at 1:00 p.m. on February 1, 2013, and ending at 11:59 p.m. on February 8, 2013, by dialing 888-286-8010 or 617-801-6888 and using the passcode 57846918.

2012 Financial Statements

Media General will issue its 2012 audited financial statements, including footnotes, on its website www.mediageneral.com, following the close of the stock market today. A link to the statements will be posted prominently on the website's home page.

About Media General
Media General is a leading provider of news, information and entertainment across 18 network-affiliated broadcast television stations and their associated digital media and mobile platforms. The company's stations serve consumers and advertisers in strong local markets, primarily in the Southeast. Media General's network affiliates include eight NBC stations, eight CBS stations, one ABC station and one CW station. Six of the company's stations operate in the Top 40 markets in the United States. Media General's stations reach more than one-third of TV households in the Southeast and more than 8 percent of U.S. TV households. Media General entered the television business in 1955 when it launched WFLA-TV in Tampa, Florida, as an NBC affiliate. Today, WFLA is the company's largest TV station, operating in the 14th largest DMA in the United States.

Contact Media General

Additional information about Media General is available on its website www.mediageneral.com or by contacting Lou Anne J. Nabhan, Vice President-Corporate Communications, at (804) 887-5120 or lnabhan@mediageneral.com.

Media General, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS 














Fourteen Weeks

 Ending


Thirteen Weeks

Ending


Fifty-Three Weeks

 Ending


Fifty-Two Weeks

Ending












December 31,


December 25,


December 31,


December 25,

(Unaudited, in thousands except per share amounts)

2012


2011


2012


2011











Station revenue (less agency commissions)

$            108,658


$              77,881


$                359,722


$             280,611











Operating costs:









Station production expenses

33,637


25,483


125,996


111,586


Station selling, general, and administrative expenses

24,762


19,618


88,235


80,472


Corporate and other expenses

101


9,581


31,705


33,651


Depreciation and software amortization

5,298


5,630


22,422


23,029


Amortization of intangible assets

441


1,313


2,637


5,253


Loss (gain) related to fixed assets, net

2,094


(23)


2,062


213



Total operating costs

66,333


61,602


273,057


254,204











Operating income

42,325


16,279


86,665


26,407











Other income (expense):









Interest expense

(10,155)


(14,616)


(51,566)


(64,403)


Interest expense - related party

(10,851)


---


(26,468)


---


Debt modification and extinguishment costs

---


---


(35,415)


---


Other, net

6


593


458


1,281



Total other expense

(21,000)


(14,023)


(112,991)


(63,122)











Income (loss) from continuing operations before income taxes

21,325


2,256


(26,326)


(36,715)











Income tax expense

3,408


6,217


13,631


12,218











Income (loss) from continuing operations

17,917


(3,961)


(39,957)


(48,933)

Discontinued operations:









Income (loss) from discontinued operations (net of tax)

(682)


657


(11,270)


(25,389)


Loss related to divestiture of discontinued operations (net of tax)

401


---


(142,190)


---

Net income (loss)

$              17,636


$               (3,304)


$               (193,417)


$              (74,322)











Net income (loss) per common share - basic and diluted (1):









Income (loss) from continuing operations

$                  0.63


$                 (0.18)


$                     (1.68)


$                  (2.18)


Discontinued operations

(0.01)


0.03


(6.47)


(1.13)

Net income (loss) per common share - basic and diluted

$                  0.62


$                 (0.15)


$                     (8.15)


$                  (3.31)











Weighted-average common shares outstanding:









Basic and diluted 

27,266


22,505


23,744


22,478





















(1)

For earnings per share purposes, shares under the Performance Accelerated Restricted Stock (PARS) and Deferred Stock Units (DSU) plans are considered to participate equally with common shareholders in the Company's earnings.  For the fourteen weeks ending December 31, 2012, this reduced both the income from continuing operations per share and the net income per share by $0.03.



 

Media General, Inc.




CONSOLIDATED BALANCE SHEETS














December 31,

December 25,

(Unaudited, in thousands)


2012

2011







ASSETS










Current assets:





Cash and cash equivalents


$            36,802

$             23,108


Accounts receivable - net


58,486

58,587


Other


18,493

17,424


Assets of discontinued operations


670

331,784



Total current assets 


114,451

430,903







Other assets


45,462

28,277







Property, plant and equipment - net


166,105

176,821







Goodwill  and other intangibles - net


447,403

450,040

Total assets


$          773,421

$        1,086,041







LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)









Current liabilities:





Accounts payable


$            11,669

$             16,527


Accrued expenses and other liabilities


64,362

46,472


Liabilities of discontinued operations


467

38,716



Total current liabilities 


76,498

101,715







Long-term debt


295,721

658,199







Long-term debt - related party


257,466

-







Retirement, postretirement, and postemployment plans

242,309

223,132







Deferred income taxes


58,865

45,954







Other liabilities and deferred credits


18,786

23,088







Stockholders' equity (deficit)


(176,224)

33,953

Total liabilities and stockholders' equity (deficit)


$          773,421

$        1,086,041







 

SUPPLEMENTAL INFORMATION














Media General, Inc.






Selected Revenue Categories
















Fourteen Weeks

Ending

Thirteen Weeks

 Ending



Fifty-Three Weeks

 Ending

Fifty-Two Weeks

 Ending



December  31,

December 25, 



December  31,

December 25, 


(Unaudited, in thousands)

2012

2011

% Change


2012

2011

% Change

Local (gross)

$              50,656

$           48,112

5.3 %


$                187,346

$            176,652

6.1 %

National (gross)

25,195

24,848

1.4 %


94,504

88,634

6.6 %

Political

30,474

3,607

---


63,698

5,714

---

Cable/Satellite (retransmission) fees

9,944

5,396

84.3 %


37,662

21,367

76.3 %

Digital (local website revenues)

2,721

2,290

18.8 %


9,899

8,361

18.4 %









































Broadcast Cash Flow

















Fourteen Weeks Ending

Thirteen Weeks Ending



Fifty-Three Weeks Ending

Fifty-Two Weeks Ending



December  31,

December 25, 



December  31,

December 25, 


(Unaudited, in thousands)

2012

2011



2012

2011










Operating income

$              42,325

$           16,279



$                  86,665

$              26,407


Add:  








  Corporate and other expenses

101

9,581



31,705

33,651


  Depreciation and software amortization

5,298

5,630



22,422

23,029


  Amortization of intangible assets

441

1,313



2,637

5,253


  Loss (gain) related to fixed assets, net

2,094

(23)



2,062

213


  Amortization of broadcast film rights

2,984

2,566



10,738

16,298


Less:  








  Payments for broadcast film rights

2,839

2,521



10,493

15,925


Broadcast cash flow

$              50,404

$           32,825



$                145,736

$              88,926


















 

SUPPLEMENTAL INFORMATION











Media General, Inc.



EBITDA, After-tax Cash Flow, and Free Cash Flow 














Fourteen Weeks

 Ending

Thirteen Weeks

Ending

Fifty-Three Weeks

 Ending

Fifty-Two Weeks

 Ending













December 31, 

December 25,

December 31, 

December 25,

(Unaudited, in thousands)

2012

2011

2012

2011









Income (loss) from continuing operations

$           17,917

$          (3,961)

$             (39,957)

$         (48,933)

Interest

21,006

14,616

78,034

64,403

Debt modification and extinguishment costs

-

-

35,415

-

Depreciation and software amortization

5,298

5,630

22,422

23,029

Amortization of intangible assets

441

1,313

2,637

5,253

Taxes


3,408

6,217

13,631

12,218

















EBITDA from continuing operations

$           48,070

$          23,815

$            112,182

$           55,970

















Income (loss) from continuing operations

$           17,917

$          (3,961)

$             (39,957)

$         (48,933)

Taxes *

3,408

6,217

13,631

12,218

Depreciation and software amortization

5,298

5,630

22,422

23,029

Amortization of intangible assets

441

1,313

2,637

5,253









After-tax cash flow from continuing operations

$            27,064

$            9,199

$               (1,267)

$           (8,433)









After-tax cash flow from continuing operations

$            27,064

$            9,199

$               (1,267)

$           (8,433)

Capital expenditures

10,623

3,372

17,886

19,053









Free cash flow 

$            16,441

$            5,827

$              (19,153)

$         (27,486)

*

The Company's income taxes are non-cash in nature and have been added back accordingly.


See 2011 Form 10-K for further discussion.

























Corporate and other expenses
















Fourteen Weeks Ending

Thirteen Weeks Ending

Fifty-Three Weeks Ending

Fifty-Two Weeks Ending













December 31, 

December 25,

December 31, 

December 25,

(Unaudited, in thousands)

2012

2011

2012

2011

Corporate (excluding depreciation and amortization)

$                6,112

$                7,015

$                  28,211

$               29,909

Corporate severance 

(51)

176

3,394

254

Incentive compensation (including stations)

1,374

1,776

5,723

1,611

Postretirement benefits**

(2,337)

44

(2,222)

173

Postemployment benefits**

(4,975)

(115)

(4,828)

35

Other operating expenses

(22)

685

1,427

1,669

Corporate and other expenses

$                    101

$                9,581

$                  31,705

$               33,651









**

In the fourth quarter of 2012, the Company recorded gains related to postretirement and postemployment benefits. The postretirement gain resulted from former newspaper employees leaving certain of the Company's postretirement plans. The postemployment gain is due to outsourcing coverage for substantially all Medicare eligible participants to a third-party.


SOURCE Media General, Inc.

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