Fisher Communications' First Quarter 2013 Financial Results

Fisher Communications' First Quarter 2013 Financial Results 
SEATTLE, WA -- (Marketwired) -- 05/03/13 --   Fisher Communications,
Inc. (NASDAQ: FSCI) 


 
--  Net Television Revenue, excluding Political increased 14%
--  TV cash flow increased 33%
--  Adjusted EBITDA increased 51%

  
Fisher Communications, Inc. (NASDAQ: FSCI), a leader in local media
innovation, today reported its financial results for the first
quarter ended March 31, 2013. The Company reported a net loss of $0.8
million, or $0.09 per share, in the first quarter, compared to a net
loss of $1.9 million, or $0.21 per share, in the first quarter of
2012. The first quarter's results include $1.2 million of pre-tax
transaction-related expenses. Excluding the after-tax
transaction-related expenses, the financial results for the first
quarter would be breakeven.  
First Quarter 2013 Financial Highlights
 (All comparisons are made to
the first quarter of 2012 unless otherwise noted) 


 
--  Total revenues were $36.8 million, up 8% from $33.9 million.
--  Direct operating, selling, general and administrative and programming
    costs increased 8%, or $2.6 million, driven by $1.2 million of
    transaction related expenses and increased stock compensation expense.
--  Adjusted EBITDA of $2.2 million was up 51% from $1.5 million.

  
Television:  


 
--  Total TV net revenue was up 12% year-over-year to $32.6 million driven
    by strong growth in the automotive, financial services and retail
    categories.
--  Retransmission consent revenue increased 82% to $6.5 million, as a
    result of renewed contracts.
--  TV cash flow increased 33% to $7.0 million; TV cash flow margin was
    22%, up from 18%.
--  KOMO-TV and KATU-TV were recently recognized for their quality
    journalism with 5 Edward R. Murrow awards. KOMO-TV earned the coveted
    award for Overall Excellence as well as Breaking News, Investigative
    Reporting and Best Documentary. KATU-TV received the Murrow award for
    Best Newscast.
--  During first quarter, KOMO-TV took top honors in local news ratings in
    key demographics; the station also became the #1 station in the
    Seattle DMA sign-on to sign-off.
--  Fisher Interactive, the Company's digital media unit, achieved record
    audience at the e
nd of the first quarter with nearly 52 million page
    views network-wide; in Seattle, komonews.com exceeds its closest
    television competitor in page views by a 2:1 margin.

  
Radio:  


 
--  Radio net revenue was down 9% year-over-year to $4.3 million due to
    market softness.
--  Radio cash flow was down $0.22 million to $0.65 million; radio cash
    flow margin of 15% was down from 18%.
--  KOMO Newsradio was recognized with the Edward R. Murrow award for
    Overall Excellence as well as Best Newscast, Breaking News and
    Continuing Coverage; Fisher's music radio station, KPLZ-FM (STAR
    101.5) earned a Murrow award for Best Documentary.

  
Balance Sheet & Liquidity 


 
--  Cash and cash equivalents were $18.9 million at quarter-end, compared
    to $20.4 million at the end of 2012.
--  Fisher remains debt free and has an unused $30 million senior secured
    revolving credit facility in place.

  
Management Commentary
 "2013 is off to a strong start, led by the
continued market share growth among our broadcast stations. This
momentum reflects the quality and value of our local brands and is
the direct result of solid execution across our group of broadcast
stations. A testament to the excellence of our local media
properties, Fisher recently dominated the 2013 Edward R. Murrow
Awards in the Northwest region, bringing home 10 Edward R. Murrow
awards, including the coveted Overall Excellence awards for KOMO-TV
(ABC) and KOMO Newsradio in Seattle," said Colleen B. Brown, Fisher's
President and Chief Executive Officer. "At the same time, we coupled
operational execution with financial excellence, delivering
substantial year-over-year improvements in TV cash flow and adjusted
EBITDA."  
She added, "Subsequent to quarter-end, we announced that we have
entered into a definitive merger agreement with Sinclair Broadcast
Group, which we believe will deliver significant value to our
shareholders. In addition, the combined entity will provide our
stations, team members and business partners with new opportunities
to flourish. As always, we remain focused on solid execution of our
strategic plan and the continued growth of our stations."  
First Quarter 2013 Conference Call
 Due to the pending acquisition by
Sinclair Broadcast Group, Inc., the Company will not be conducting a
conference call to discuss the first quarter 2013 financial results. 
Definitions and Disclosures Regarding Non-GAAP Financial Information 
The Company reports and discusses its operating results using
financial measures consistent with generally accepted accounting
principles (GAAP) and believes this should be the primary basis for
evaluating its performance. 
The preceding discussion of our results includes a discussion of
non-GAAP financial measures such as Television cash flow, Radio cash
flow, net loss excluding the after-tax transaction-related expenses
and Earnings before Interest, Taxes, Depreciation and Amortization
(EBITDA) and Adjusted EBITDA. These non-GAAP measures should not be
viewed as alternatives or substitutes for GAAP reporting. 
The Company believes the presentation of these non-GAAP measures is
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; and 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, time brokerage agreements or local
marketing agreements. Management believes they also provide an
additional basis from which investors can establish forecasts and
valuations for the Company's business. 
Television and radio cash flow are calculated as television and radio
segment income from operations plus amortization of broadcast rights,
non-cash charges, Internet and trade expenses minus payments for
broadcast rights and Internet revenue. Broadcast cash flow is
calculated by adding the Television and radio cash flow. 
Net loss excluding the after-tax transaction-related expenses, is
calculated as net loss plus transaction-related expenses, adjusted by
the estimated tax impact by applying the annual effective tax rate. 
EBITDA is calculated as income from operations plus amortization of
broadcast rights; depreciation and amortization; stock-based
compensation; loss on disposal of property, plant and equipment, net;
and non-cash charges minus payments for broadcast rights; gain on
sale of real estate, net; and amortization of non-cash benefit
resulting from a change in national advertising representation firm. 
Adjusted EBITDA excludes Plaza rent expense in 2012 and 2013.
Management believes this presentation of Adjusted EBITDA is useful to
investors because it provides investors with a comparable measure
given the rent expense for Fisher Plaza. 
For a reconciliation of these non-GAAP financial measurements to the
GAAP financial results cited in this press release, please see the
supplemental tables at the end of this release. 
About Fisher Communications, Inc. 
 F
isher Communications, Inc. is a
Seattle-based communications Company that owns and operates 13 full
power television stations, seven low power television stations, three
owned radio stations and one managed radio station in the Western
United States. The Company also owns and operates Fisher Interactive
Network, its online division (including over 120 online sites) and
Fisher Pathways, a satellite and fiber transmission provider. For
more information about Fisher Communications, Inc., go to
www.fsci.com. 
Forward-Looking Statements 
 Certain statements in this news release
constitute "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Such
forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of the Company to be materially different
from any future results, performance or achievements expressed or
implied by such forward-looking statements. Statements preceded by,
followed by or that otherwise include the words "believes,"
"expects," "anticipates," "intends," "projects," "estimates,"
"plans," "increase," "forecast" and "guidance" and similar
expressions or future or conditional verbs such as "will," "should,"
"would," "may" and "could" are based upon then-current assumptions
and expectations and are generally forward-looking in nature and not
historical facts. Any statements that refer to outlook, expectations
or other characterizations of future events, circumstances or results
are also forward-looking statements. The forward-looking statements
contained in this news release, including, among other things,
statements related to changes in revenue, cash flow and operating
expenses, the proposed merger involving the Company and Sinclair
Broadcast Group and the expected closing of the KMTR TV transaction,
involve risks and uncertainties and are subject to change based on
various important factors, including the impact of changes in
national and regional economies, the competitiveness of political
races and voter initiatives, 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. There can be no assurance that the proposed merger will occur
as currently contemplated, or at all, or that the expected benefits
from the transaction will be realized on the timetable currently
contemplated, or at all. Additional risks and uncertainties relating
to the proposed merger include, but are not limited to, uncertainties
as to the satisfaction of closing conditions to the proposed merger,
including timing and receipt of regulatory approvals, timing and
receipt of approval by the shareholders of the Company, the
respective parties' performance of their obligations under the merger
agreement relating to the proposed merger, and other factors
affecting the execution of the transaction. 
A further list and description of important assumptions and other
important factors that could cause actual results to differ
materially from those in the forward-looking statements are specified
in the Company's Annual Report on Form 10-K for the year ended
December 31, 2012, as amended, included under headings such as
"Forward-Looking Statements," "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations," the Company's most recently filed Form 10-Q, and in
other filings and furnishings made by the Company with the SEC from
time to time. Other unknown or unpredictable factors could also have
material adverse effects on the Company's performance or
achievements. In light of these risks, uncertainties, assumptions and
factors, the forward-looking events discussed in this news release
may not occur. You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date stated,
or if no date is stated, as of the date of this news release. The
Company undertakes no obligation to release publicly any revisions to
any forward-looking statements, to report events or to report the
occurrence of unanticipated events unless required by law. 
Additional Information
 In connection with the meeting of the
Company's shareholders to be held with respect to the proposed merger
involving the Company and Sinclair Broadcast Group, the Company plans
to file with the SEC preliminary and definitive proxy statements and
other relevant materials. The definitive proxy statement (when
available) will be mailed to the Company's shareholders. INVESTORS
AND SECURITYHOLDERS ARE ADVISED TO READ THE PROXY STATEMENT WHEN IT
BECOMES AVAILABLE BEFORE MAKING ANY VOTING OR INVESTMENT DECISION
WITH RESPECT TO THE PROPOSED MERGER BECAUSE IT WILL CONTAIN IMPORTANT
INFORMATION. Investors and security holders will be able to obtain a
free copy of the proxy statement (when available) and other relevant
documents filed by the Company with the SEC from the SEC's website at
http://www.sec.gov. In addition, investors and security holders may
obtain free copies of the documents filed with the SEC at the
Company's website at www.fsci.com by clicking on the "Investor
Relations" link, then clicking on the "SEC Filings" link. 
The Company and its directors, executive officers and certain other
employees may be deemed to be participants in the solicitation of
proxies of the Company's shareholders in connection with the proposed
merger. Investors and security holders may obtain more detailed
information regarding the names, affiliations and interests of the
Company's directors and executive officers by reading the Company's
Form 10-K/A for the year ended December 31, 2012, which was filed
with the SEC on April 29, 2013. Additional information regarding
potential participants in such proxy solicitation and a description
of their direct and indirect interests, by security holdings or
otherwise, will be included in the proxy statement and other relevant
materials filed by the Company with the SEC in connection with the
proposed merger when they become available. 


 
                                                                            
               Fisher Communications, Inc. and Subsidiaries                 
              Condensed Consolidated Statements of Operations               
                                (Unaudited)                                 
                                                                            
                                         Three months ended          %      
                                              March 31,          Increase   
(in thousands, except per-share                                             
 amounts)                                 2013         2012     (decrease)  
                                      -----------  -----------  ----------  
Revenue                               $    36,791  $    33,932           8% 
                                      -----------  -----------  -----
-----  
Operating expenses                                                          
  Direct operating costs                   17,646       16,656           6% 
  Selling, general and administrative                                       
   expenses                                16,213       14,554          11% 
  Amortization of broadcast rights          2,402        2,457          (2%)
  Depreciation and amortization             1,794        1,757           2% 
  Gain on sale of real estate, net              -         (373)        100% 
                                      -----------  -----------  ----------  
  Total operating expenses                 38,055       35,051           9% 
                                      -----------  -----------  ----------  
Loss from operations                       (1,264)      (1,119)        (13%)
Loss on extinguishment of senior                                            
 notes, net                                     -       (1,482)             
Other income, net                              30           30              
Interest expense                              (30)        (266)             
                                      -----------  -----------              
Loss from operations before income                                          
 taxes                                     (1,264)      (2,837)             
Benefit for income taxes                     (495)        (973)             
                                      -----------  -----------              
Net loss                              $      (769) $    (1,864)             
                                      ===========  ===========              
                                                                            
                                                                            
Net loss per share (basic and                                               
 diluted)                             $     (0.09) $     (0.21)             
                                      ===========  ===========              
                                                                            
Weighted average shares outstanding                                         
 (basic and diluted)                        8,800        8,847              
                                      -----------  -----------              
                                                                            
Dividends declared per share          $      0.15  $         -              
                                      ===========  ===========              
                                                                            
                                                                            
                                                                            
                Fisher Communications, Inc. and Subsidiaries                
                    Condensed Consolidated Balance Sheets                   
                                 (Unaudited)                                
                                                                            
                                                   March 31,    December 31,
(in thousands)                                        2013          2012    
                                                 ------------- -------------
ASSETS                                                                      
Current assets                                                              
  Cash and cash equivalents                      $      18,943 $      20,403
  Receivables, net                                      28,975        28,243
  Income taxes receivable                                1,314           834
  Deferred income taxes, net                             1,062         1,062
  Prepaid expenses and other                             3,588         3,629
  Broadcast rights                                       4,298         6,690
                                                 ============= =============
    Total current assets                                58,180        60,861
Restricted cash                                            125         3,624
Cash surrender value of life insurance and                                  
 annuity contracts                                      18,314        18,100
Goodwill, net                                           13,293        13,293
Intangible assets, net                                  40,013        40,072
Other assets                                             5,414         5,208
Deferred income taxes, net                                 685           711
Property, plant and equipment, net                      38,847        39,155
                                                 ------------- -------------
Total assets                                     $     174,871 $     181,024
                                                 ============= =============
                                                                            
LIABILITIES AND STOCKHOLDERS' EQUITY                                        
Current Liabilities                                                         
  Accounts payable                               $       1,475 $       1,496
  Accrued payroll and related benefits                   4,038         4,200
  Broadcast rights payable                               4,057         6,488
  Income taxes payable                                     145         3,060
  Current portion of accrued retirement benefits         1,368         1,368
  Other current liabilities                              9,083         7,260
                                                 ------------- -------------
    Total current liabilities                           20,166        23,872
Deferred income                                          8,043         8,338
Accrued retirement benefits                             22,475        22,574
Other liabilities                                        3,134         3,105
                                                 ------------- -------------
    Total liabilities                                   53,818        57,889
                                                 ------------- -------------
Total stockholders' equity                             121,053       123,135
                                                 ------------- -------------
Total liabilities and stockholders' equity       $     174,871 $     181,024
                                                 ============= =============
                                                                            
                                                                            
                                                                            
                Fisher Communications, Inc. and Subsidiaries                
              Condensed Consolidated Statements of Cash Flows               
                                (Unaudited)                                 
                                                                            
                                               Three months ended March 31, 
(in thousands)                                      2013           2012     
                                               -------------  ------------- 
Operating activities                                                        
  Net loss                                     $        (769) $      (1,864)
  Adjustments to reconcile net loss to net                                  
   cash used in operating activities                                        
      Depreciation and amortization                    1,794          1,757 
      Deferred income taxes, net                          26             18 
      Loss on extinguishment of senior notes,                               
       net                                                 -            594 
      Loss in operations of equity investees              50           
  44 
      Loss on disposal of property, plant and                               
       equipment                                          17             11 
      Gain on sale of real estate, net                     -           (373)
      Amortization of deferred financing fees             13             19 
      Amortization of deferred gain on sale of                              
       Fisher Plaza                                     (190)          (190)
      Amortization of debt security investment                              
       premium                                             -             74 
      Amortization of non-cash contract                                     
       termination fee                                  (365)          (365)
      Amortization of broadcast rights                 2,402          2,457 
      Payments for broadcast rights                   (2,441)        (2,651)
      Stock-based compensation                           830            451 
  Change in operating assets and liabilities,                               
   net                                                                      
    Receivables                                         (732)         5,328 
    Prepaid expenses and other                            41             12 
    Cash surrender value of life insurance and                              
     annuity contracts                                  (214)          (207)
    Other assets                                        (227)            37 
    Accounts payable, accrued payroll and                                   
     related benefits and other current                                     
     liabilities                                       1,337           (815)
    Interest payable                                       -         (1,556)
    Income taxes receivable and payable               (3,395)       (22,691)
    Accrued retirement benefits                          (46)            (2)
    Other liabilities                                    341            117 
                                               -------------  ------------- 
        Net cash used in operating activities         (1,528)       (19,795)
                                               -------------  ------------- 
Investing activities                                                        
  Investment in equity investee                          (11)            (9)
  Purchase of held to maturity debt security                                
   investments                                             -        (82,733)
  Purchase of property, plant and equipment           (1,182)        (4,445)
  Proceeds from sale of available for sale                                  
   debt security investments held as                                        
   restricted cash                                     3,499              - 
  Proceeds from sale of held to maturity debt                               
   security investments                                    -          7,628 
  Proceeds from maturity of held to maturity                                
   debt security investments                               -         25,000 
  Proceeds from sale of real estate                        -            570 
                                               -------------  ------------- 
        Net cash provided by (used in)                                      
         investing activities                          2,306        (53,989)
Financing activities                                                        
  Repurchase of senior notes                               -        (61,834)
  Repurchase of common stock                               -            (86)
  Shares settled upon vesting of stock rights           (845)          (437)
  Payments on capital lease obligations                  (51)           (47)
  Cash dividends paid                                 (1,342)             - 
                                               -------------  ------------- 
        Net cash used in financing activities         (2,238)       (62,404)
                                               -------------  ------------- 
Net decrease in cash and cash equivalents             (1,460)      (136,188)
Cash and cash equivalents, beginning of period        20,403        143,017 
                                               -------------  ------------- 
Cash and cash equivalents, end of period       $      18,943  $       6,829 
                                               =============  ============= 
                                                                            
                                                                            
                                                                            
                Fisher Communications, Inc. and Subsidiaries                
                      GAAP to Non-GAAP Reconciliations                      
                         (Unaudited, in thousands)                          
                                                                            
The following table provides a reconciliation of loss from operations       
 (GAAP) to EBITDA (non-GAAP) in each of the periods presented:              
                                                                            
                                                                            
                                               Three months ended March 31, 
                                               ---------------------------- 
                                                    2013           2012     
                                               -------------  ------------- 
                                                                            
Loss from operations                           $      (1,264) $      (1,119)
  Adjustments:                                                              
    Amortization of broadcast rights                   2,402          2,457 
    Payments for broadcast rights                     (2,441)        (2,651)
    Depreciation and amortization                      1,794          1,757 
    Stock-based compensation                             830            451 
    Loss on disposal of property, plant and                                 
     equipment, net                                       17             11 
    Gain on sale of real estate, net                       -           (373)
    Other                                                  -             45 
    Amortization of non-cash benefit resulting                              
     from change in national advertising                                    
     representation firm                                (365)          (365)
                                               -------------  ------------- 
EBITDA (Non-GAAP)                              $         973  $         213 
                                               =============  =
============ 
    Fisher Plaza rent expense                          1,268          1,271 
                                               -------------  ------------- 
Adjusted EBITDA (Non-GAAP)                     $       2,241  $       1,484 
                                               =============  ============= 
                                                                            
                                                                            
                                                                            

 
The following table provides a reconciliation of television segment income  
 from operations to television broadcast cash flow in each of the periods   
 presented:                                                                 
                                                                            
                                                                            
                                               Three months ended March 31, 
                                               ---------------------------- 
                                                    2013           2012     
                                               -------------  ------------- 
                                                                            
Television segment income from operations      $       6,681  $       5,079 
                                                                            
  Adjustments:                                                              
    Amortization of broadcast rights                   2,402          2,457 
    Payments for broadcast rights                     (2,441)        (2,651)
    Net trade and internet loss (1)                      370            394 
                                               -------------  ------------- 
Television broadcast cash flow (Non-GAAP)      $       7,012  $       5,279 
                                               =============  ============= 
                                                                            
Television broadcast cash flow as a percentage                              
 of television segment revenue                          21.5%          18.1%
                                               =============  ============= 
                                                                            
Television segment revenue                     $      32,560  $      29,159 
                                               =============  ============= 
                                                                            
(1) Excludes multiplatform internet related revenue                         
                                                                            
                                                                            
                                                                            
The following table provides a reconciliation of radio segment income from  
 operations to radio broadcast cash flow in each of the periods presented:  
                                                                            
                                               Three months ended March 31, 
                                               ---------------------------- 
                                                    2013           2012     
                                               -------------  ------------- 
                                                                            
Radio segment income from operations           $         613  $         798 
                                                                            
  Adjustments:                                                              
    Net trade loss                                        35             74 
                                               -------------  ------------- 
                                                                            
Radio broadcast cash flow (Non-GAAP)           $         648  $         872 
                                               =============  ============= 
                                                                            
Radio broadcast cash flow as a percentage of                                
 radio segment revenue                                  15.0%          18.4%
                                               =============  ============= 
                                                                            
Radio segment revenue                          $       4,320  $       4,733 
                                               =============  ============= 
                                                                            
                                                                            
                                                                            
The following table provides television net revenue comparisons in each of  
 the periods presented:                                                     
                                                                            
                                                                            
                                   Three months ended March 31,      %      
                                  ----------------------------- ----------  
                                                                 Increase   
                                       2013           2012      (decrease)  
                                  -------------- -------------- ----------  
Core advertising (local and                                                 
 national)                        $       23,418 $       22,214          5% 
Political                                      -            519       (100%)
Internet (1)                               1,066          1,282        (17%)
Retransmission                             6,523          3,577         82% 
Trade, barter and other                    1,553          1,567         (1%)
                                  -------------- -------------- ----------  
Television segment net revenue    $       32,560 $       29,159         12% 
                                  ============== ============== ==========  
                                                                            
Television segment net revenue,                                             
 excluding political              $       32,560 $       28,640         14% 
                                                                            

 
(1) Excludes multiplatform internet                                             
              
related revenue                                                                 
              
                                                                                
              
                                                                                
              
The following table provides radio net revenue comparisons in               
 each of the periods presented:                                             
                                                                            
                                   Three months ended March 31,      %      
                                  ----------------------------- ----------  
                                                                 Increase   
                                       2013           2012      (decrease)  
                                  -------------- -------------- ----------  
Core advertising (local and                                                 
 national)                        $        4,132 $        4,458         (7%)
Political                                     12             40        (70%)
Trade, barter and other                      176            235        (25%)
                                  -------------- -------------- ----------  
Radio segment net revenue         $        4,320 $        4,733         (9%)
                                  ============== ============== ==========  
                                                                            
Radio segment net revenue,                                                  
 excluding political              $        4,308 $        4,693         (8%)
                                                                            
                                                                            
                                                                            
The following table provides a reconciliation of net loss (GAAP) to         
 adjusted net loss, excluding the after-tax transaction-related expenses    
 (non-GAAP) in each of the periods presented:                               
                                                                            
                                               Three months ended March 31, 
                                               ----------
------------------ 
                                                    2013           2012     
                                               -------------  ------------- 
Net loss                                       $        (769) $      (1,864)
                                                                            
  Adjustments:                                                              
    Transaction-related expenses                       1,233              - 
    Effect of income taxes                              (483)             - 
                                               -------------  ------------- 
Adjusted net loss, excluding the after-tax                                  
 transaction-related expenses                  $         (19) $      (1,864)
                                               =============  ============= 
                                                                            
                                                                            
Adjusted net loss per share assuming dilution,                              
 excluding the after-tax transaction-related                                
 expenses                                      $           -  $       (0.21)
                                               =============  ============= 
                                                                            
Weighted average shares outstanding assuming                                
 dilution                                              8,800          8,847 
                                               =============  ============= 

  
Contacts: 
Addo Communications 
310-829-5400 
 
 
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