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Sinclair Reports $0.73 Diluted Earnings Per Share In Fourth Quarter 2012; Declares $0.15 Quarterly Dividend Per Share



  Sinclair Reports $0.73 Diluted Earnings Per Share In Fourth Quarter 2012;
                 Declares $0.15 Quarterly Dividend Per Share

PR Newswire

BALTIMORE, Feb. 6, 2013

BALTIMORE, Feb. 6, 2013 /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, 2012. 

(Logo:  http://photos.prnewswire.com/prnh/20100119/PH39783LOGO)

"2012 was a remarkable year for our Company," commented David Smith, President
and CEO of Sinclair.  "We successfully closed on 30 TV stations, recorded
record levels of political advertising, benefited from a rebound in the
automotive advertising category, and achieved historic levels in key financial
metrics.  As we look forward to 2013, we are very excited about our prospects,
including starting the year with the Super Bowl on our 11 CBS stations.  While
we have led the current consolidation trend in the broadcast industry, we
believe there are still many opportunities for us to continue to acquire
quality television assets, unlock hidden value, and strengthen our competitive
position."

Financial Results:

"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 is expected to close in
February 2013, and for the sale of WLWC-TV, our CW affiliate in the
Providence, RI/New Bedford, MA market which is expected to close in the second
quarter of 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.

Net broadcast revenues from continuing operations were $287.1 million for the
three months ended December 31, 2012, an increase of 58.8% versus the prior
year period result of $180.8 million.  The Company had operating income of
$119.1 million in the three-month period, as compared to operating income of
$63.5 million in the prior year period.  Net income attributable to the
Company was $59.0 million in the three-month period, versus net income of
$22.7 million in the prior year period. 

The Company reported diluted earnings per common share of $0.73 for the
three-month period ended December 31, 2012 versus diluted earnings per common
share of $0.28 in the prior year period.

Net broadcast revenues from continuing operations were $920.6 million for the
twelve months ended December 31, 2012, an increase of 42.1% versus the prior
year period result of $648.0 million.  The Company had operating income of
$329.3 million in the twelve-month period, as compared to operating income of
$225.6 million in the prior year period.  Net income attributable to the
Company was $144.7 million in the twelve-month period, versus net income of
$75.8 million in the prior year period. 

The Company reported diluted earnings per common share of $1.78 in the
twelve-month period ended December 31, 2012 versus diluted earnings per common
share of $0.94 in the prior year period.   

Operating Statistics and Income Statement Highlights:

  o Political revenues were $54.1 million and $96.9 million in the fourth
    quarter and full year 2012, respectively, versus $4.1 million and $8.3
    million in fourth quarter and full year 2011, respectively.
     
  o Local net broadcast revenues, which include local time sales,
    retransmission revenues, and other broadcast revenues, were up 33.7% in
    the fourth quarter 2012, while national net broadcast revenues, which
    include national time sales and other national broadcast revenues, were up
    58.8% versus the fourth quarter 2011.  Excluding political revenues, local
    net broadcast revenues were up 29.3% and national net broadcast revenues
    were up 41.5% in the fourth quarter 2012 versus the fourth quarter of
    2011.  On a same station basis, excluding political revenues, local net
    broadcast revenues were down 2.0% due primarily to increased demand from
    political advertising, while national net broadcast revenues were up 1.5%,
    versus the fourth quarter of 2011.
     
  o Advertising categories, on a same station basis, that reported the largest
    spending increases in the fourth quarter 2012, as compared to the same
    period last year, were automotive, which was up 6.4%, and direct
    response.  Categories that declined were services, schools,
    pharmaceuticals, and restaurants.  
     
  o In December, the Company closed on the purchase from Nexstar Broadcasting
    Group, Inc. of the non-license assets of KBTV-TV (FOX) in the
    Beaumont/Port Arthur, TX market for $12.5 million.
     
  o In December, the Company closed on the purchase of six television stations
    owned by Newport Television and acquired Newport's rights under local
    marketing agreements to operate two additional television stations.  The
    Company also closed on agreements with Deerfield Media, Inc., selling
    Deerfield the license assets of Sinclair's station in San Antonio (KMYS
    CW) and Sinclair's station in Cincinnati (WSTR MY).  Additionally,
    Deerfield purchased the license assets of WPMI and WJTC in the
    Mobile/Pensacola market from Newport and the license assets of KBTV in
    Beaumont from Nexstar.  Sinclair is providing sales and other
    non-programming services to each of these five stations pursuant to shared
    services and joint sales agreements.
     
  o In December, Sinclair purchased the non-license assets of Newport's
    station, WHAM-TV (ABC) in Rochester, New York for $54.0 million plus the
    option to acquire the license assets.  Sinclair is providing sales and
    other non-programming services pursuant to a shared service and joint
    sales agreement.
     
  o On December 31, the Company closed on the purchase of the non-license
    assets of GoCom Media, Inc's three television stations, WRSP (FOX), WCCU
    (FOX), WBUI (CW), in the Champaign/Springfield/Decatur, Illinois market
    for approximately $25.6 million.  Sinclair is providing sales and other
    non-programming services to the stations pursuant to shared services and
    joint sales agreements.
     
  o In December, the Company entered into a multi-year retransmission consent
    agreement with Mediacom Communications.
     
  o Effective January 1, 2013, the Company entered into a six-year affiliation
    agreement with the CBS Network on its Portland, ME and Cedar Rapids, IA
    affiliates, expiring December 31, 2018.
     
  o In January 2013, the Company entered into an agreement to sell the assets
    of WLWC-TV (CW) in the Providence, RI/New Bedford, MA market to OTA
    Broadcasting LLC for $13.75 million.  The transaction is expected to close
    in the second quarter 2013, subject to FCC approval and closing
    conditions.
     
  o In January, FOX Television Stations notified the Company that it would not
    exercise its option to purchase Sinclair's stations in any of the
    following television markets: Raleigh, NC (WRDC/MNT and WLFL/CW); Las
    Vegas, NV (KVMY/MNT and KVCW/CW); Cincinnati, OH (WSTR/MNT); and Norfolk,
    VA (WTVZ/MNT).  The option was due to expire March 30, 2013.  Pursuant to
    its affiliation agreement entered into in May 2012, Sinclair is required
    to pay the last installment payment to FOX in the amount of $25 million,
    which is due April 26, 2013.

Balance Sheet and Cash Flow Highlights:

  o Debt on the balance sheet, net of $22.9 million in cash and cash
    equivalents, was $2,250.5 million at December 31, 2012 versus net debt of
    $1,682.2 million at September 30, 2012. 
     
  o As of December 31, 2012, 52.3 million Class A common shares and 28.9
    million Class B common shares were outstanding, for a total of 81.2
    million common shares outstanding.
     
  o On December 14, 2012, the Company paid a $1.00 per share special dividend
    and a $0.15 per share quarterly cash dividend to its shareholders. 
     
  o Capital expenditures in the fourth quarter 2012 were $13.9 million.
     
  o Program contract payments for continuing operations were $17.5 million in
    the fourth quarter 2012.

Notes:

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

The management fees associated with the Freedom Communications ("Freedom")
local marketing agreement, which was terminated April 1, 2012 upon
acquisition, are reflected in other net broadcast revenues.

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," 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 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.

Outlook:

In accordance with Regulation FD, Sinclair is providing public dissemination
through this news release of its expectations for certain components of its
first quarter 2013 and full year 2013 financial performance.  The Company
assumes no obligation to update its expectations.  All matters discussed in
this "Outlook" section are forward-looking and, therefore, readers should not
place any undue reliance on this information and should refer to the
"Forward-Looking Statements" section above. 

The term "Acquisition(s)" in this Outlook section refers to the recently
acquired Newport stations, KBTV and the GoCom stations for the first quarter
and full year 2013, and the Freedom stations for the first quarter 2013 only.

"After ending 2012 with record levels of political advertising, we are excited
about the Company's operating direction and our drivers for 2013," commented
David Amy, EVP and CFO.  "Early estimates for sales in the automotive
industry, which is our largest advertising category, reflect 9.0% growth that
we expect will translate into increased ad revenues for us.  As a result of
the many stations we acquired in 2012, we believe our more balanced portfolio
of "big four" network-affiliated stations will allow us to increase our
revenue share, especially given our content offering of highly rated shows
such as the local news and sports.  This was evident in the $2.5 million in
Super Bowl revenues we booked this February."

  o The Company expects first quarter 2013 station net broadcast revenues from
    continuing operations, before barter, to be approximately $251.9 million
    to $254.9 million, up 32.0% to 33.5% as compared to first quarter 2012
    results of $190.9 million.  This assumes approximately $0.4 million and
    $2.5 million in political and Super Bowl revenues, respectively, in the
    first quarter 2013, as compared to $3.6 million and $0.1 million in the
    first quarter 2012.  The 2013 first quarter net broadcast revenue
    estimates assume $62.6 million related to the Acquisitions.  Excluding the
    Acquisitions, same station net broadcast revenues in the first quarter
    2013 are estimated to be up 3.4% to 5.0% versus the first quarter 2012,
    and up 5.2% to 6.9% excluding political.
     
  o The Company expects barter revenue to be approximately $22.0 million in
    the first quarter 2013.
     
  o The Company expects barter expense to be approximately $22.0 million in
    the first quarter 2013.
     
  o The Company expects continuing operations station production expenses and
    station selling, general and administrative expenses (together,
    "television expenses"), before barter expense, to be approximately $134.9
    million in the first quarter and $547.6 million for 2013, as compared to
    the 2012 actuals of $95.5 million and $426.8 million for the first quarter
    and year, respectively.  The 2013 estimates assume $34.7 million and $96.5
    million related to the Acquisitions for the quarter and year,
    respectively.   The 2013 expense forecast includes $1.6 million of
    stock-based compensation expense for the year, as compared to $1.7 million
    for 2012.  Excluding the Acquisitions, same station television expenses
    are expected to be up approximately 14.3% and 9.4% in the first quarter
    and full year 2013, respectively.  This assumes the stations are at full
    staffing levels and the maximum bonus potential is earned.
     
  o The Company expects program contract amortization expense to be
    approximately $20.4 million in the first quarter and $80.0 million for
    2013, as compared to the 2012 actuals of $14.1 million and $61.0 million
    for the quarter and year, respectively.  The 2013 estimates assume $2.6
    million and $9.1 million for the quarter and year respectively, related to
    the Acquisitions.
     
  o The Company expects program contract payments to be approximately $21.6
    million in the first quarter and $85.0 million for 2013, as compared to
    the 2012 actuals of $16.4 million and $69.0 million for the quarter and
    year, respectively.  The 2013 estimates assume $2.1 million and $8.3
    million for the quarter and year respectively, related to the
    Acquisitions.
     
  o The Company expects corporate overhead to be approximately $10.3 million
    in the first quarter 2013, which includes $2.9 million of stock-based
    compensation, and $35.2 million for the full year, as compared to the 2012
    actuals of $9.4 million and $33.4 million for the quarter and year,
    respectively.  This includes $4.4 million of stock-based compensation
    expense for 2013 as compared to $4.2 million for 2012. 
     
  o The Company expects other operating division revenues less other operating
    division expenses to be $1.9 million of income in the first quarter and
    $12.8 million of income for 2013 (assuming current equity interests), as
    compared to the 2012 actuals of $1.7 million of income in the quarter and
    $8.0 million of income for the year. 
     
  o The Company expects depreciation on property and equipment to be
    approximately $16.0 million in the first quarter and $62.4 million for
    2013 (assuming the capital expenditure assumptions below), as compared to
    the 2012 actuals of $9.3 million and $47.1 million for the quarter and
    year, respectively. 
     
  o The Company expects amortization of acquired intangibles to be
    approximately $14.3 million in the first quarter and $55.9 million for
    2013, as compared to the 2012 actuals of $5.8 million and $38.1 million
    for the quarter and year, respectively.  
     
  o The Company expects net interest expense to be approximately $37.8 million
    in the first quarter and $151.7 million (approximately $139.3 million on a
    cash basis) for 2013, assuming no changes in the current interest rate
    yield curve or changes in debt levels based on the assumptions discussed
    in this "Outlook" section.  This compares to the 2012 actuals of $27.4
    million and $128.40 million ($117.5 million on a cash basis) for the first
    quarter and year, respectively. 
     
  o The Company expects a current tax provision from continuing operations of
    approximately $7.9 million and $38.6 million in the first quarter and for
    the full year 2013, respectively, based on the assumptions discussed in
    this "Outlook" section.  The Company expects the effective tax rate to be
    approximately 36.3% and 36.2% for the first quarter and 2013,
    respectively.  The Company expects to pay cash taxes of $43.5 million for
    2013.
     
  o The Company expects to spend approximately $9.9 million in capital
    expenditures in the first quarter and approximately $39.0 million for
    2013.  The 2013 estimate assumes $3.8 million related to the Acquisitions.

Sinclair Conference Call:

The senior management of Sinclair will hold a conference call to discuss its
fourth quarter 2012 results on Wednesday, February 6, 2013, 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)
407-9205.

About Sinclair:

Sinclair Broadcast Group, Inc., the largest and one of the most diversified
television broadcasting companies, owns and operates, programs or provides
sales services to 87 television stations in 47 markets.  Sinclair's television
portfolio consists of 24 FOX, 19 MNT, 16 CW, 12 ABC, 11 CBS, 3 NBC, 1
Independent, and 1 Azteca station.  Sinclair's television group reaches
approximately 27.1% of U.S. television households and is affiliated with all
major networks.  Sinclair owns equity interests in various non-broadcast
related companies.  The Company regularly uses its website as a key source of
Company information and can be accessed at www.sbgi.net.

 

Sinclair Broadcast Group, Inc. and Subsidiaries

Preliminary Unaudited Consolidated Statements of Operations

(in thousands, except per share data)
                        Three Months Ended          Twelve Months Ended

                        December 31,                December 31,
                        2012          2011          2012          2011
REVENUES:
Station broadcast
revenues, net of agency $   287,100   $   180,795   $    920,593  $    648,002
commissions
Revenues realized from
station barter          26,845        19,541        86,905        72,773
arrangements
Other operating         15,572        12,440        54,181        44,513
divisions revenues
Total revenues          329,517       212,776       1,061,679     765,288
OPERATING EXPENSES:
Station production      71,458        51,857        255,556       178,612
expenses
Station selling,
general and             50,817        31,843        171,279       123,938
administrative expenses
Expenses recognized
from station barter     24,715        17,669        79,834        65,742
arrangements
Amortization of program
contract costs and net
realizable              17,425        13,962        60,990        52,079

    value adjustments
Other operating         13,014        13,384        46,179        39,486
divisions expenses
Depreciation of         13,042        9,351         47,073        32,874
property and equipment
Corporate general and   8,225         6,784         33,391        28,310
administrative expenses
Amortization of
definite-lived          11,724        4,426         38,099        18,229
intangible and other
assets
Impairment of goodwill,
intangible and other    -             -             -             398
assets
Total operating         210,420       149,276       732,401       539,668
expenses
Operating income        119,097       63,500        329,278       225,620
OTHER INCOME (EXPENSE):
Interest expense and
amortization of debt
discount and            (36,552)      (27,564)      (128,553)     (106,128)

    deferred financing
costs
Loss from               -             (328)         (335)         (4,847)
extinguishment of debt
Income from equity and  1,327         363           9,670         3,269
cost method investments
Gain on insurance       10            19            47            1,742
settlement
Other income, net       537           447           2,233         1,717
Total other expense     (34,678)      (27,063)      (116,938)     (104,247)
Income from continuing
operations before       84,419        36,437        212,340       121,373
income taxes
INCOME TAX PROVISION    (25,667)      (13,084)      (67,852)      (44,785)
Income from continuing  58,752        23,353        144,488       76,588
operations
DISCONTINUED
OPERATIONS:
Income (loss) from
discontinued
operations, includes
income                  643           (111)         465           (411)

    tax provision of
$444, $111, $663 and
$477, respectively   
NET INCOME              59,395        23,242        144,953       76,177
Net income attributable
to the noncontrolling   (393)         (540)         (287)         (379)
interests
NET INCOME ATTRIBUTABLE
TO SINCLAIR             $     59,002  $     22,702  $             $      
                                                    144,666       75,798
    BROADCAST GROUP
Dividends declared per  $             $             $             $          
share                   1.15          0.12          1.54          0.48
BASIC AND DILUTED
EARNINGS PER COMMON
SHARE

    ATTRIBUTABLE TO
SINCLAIR BROADCAST
GROUP:
Basic earnings per      $             $             $             $          
share from continuing   0.72          0.28           1.78         0.95
operations
Basic earnings per      $             $             $             $          
share                   0.73          0.28           1.79         0.94
Diluted earnings per    $             $             $             $          
share from continuing   0.72          0.28           1.78         0.95
operations
Diluted earnings per    $             $             $             $          
share                   0.73          0.28           1.78         0.94
Weighted average common 81,109        80,779        81,020        80,217
shares outstanding
Weighted average common
and common equivalent
shares                  81,440        81,119        81,310        80,532

    outstanding
AMOUNTS ATTRIBUTABLE TO
SINCLAIR BROADCAST

    GROUP COMMON
SHAREHOLDERS:
Income from continuing  $             $             $    144,201  $    
operations, net of tax  58,359        22,813                       76,209
Income (loss) from
discontinued            643           (111)         465           (411)
operations, net of tax
Net income              $             $             $    144,666  $    
                        59,002        22,702                       75,798

 

Preliminary Unaudited Consolidated Historical Selected Balance Sheet Data:

(In thousands)
                                          December 31,     September 30,

                                          2012             2012
Cash & cash equivalents                   $        22,865  $        44,625
Total current assets                      304,448          289,158
Total long term assets                    2,425,249        1,956,378
Total assets                              $   2,729,697    2,245,536
Current portion of debt                   49,326           47,871
Total current liabilities                 307,600          303,238
Long term portion of debt                 2,224,053        1,678,918
Total long term liabilities               2,522,150        1,994,682
Total liabilities                         2,829,750        2,297,920
Total stockholders' deficit               (100,053)        (52,384)
Total liabilities & stockholders' deficit $    2,729,697   $    2,245,536

 

Unaudited Consolidated Historical Selected Statement of Cash Flows Data:

(In thousands)
                                       Three Months          Twelve Months

                                       Ended                 Ended

                                       December 31,          December 31,
                                       2012                  2012
Net cash flow from operating           $             74,171  $        237,475
activities
Net cash flow used in investing        (540,021)             (1,149,284)
activities
Net cash flow from financing           444,090               921,707
activities
Net increase (decreases) in cash &     (21,760)              9,898
cash equivalents
Cash & cash equivalents, beginning of  44,625                12,967
period
Cash & cash equivalents, end of period $             22,865  $          22,865

 

SOURCE Sinclair Broadcast Group, Inc.

Website: http://www.sbgi.net
Contact: David Amy, EVP & Chief Financial Officer, or Lucy Rutishauser,
VP-Corporate Finance & Treasurer, +1-410-568-1500
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