SOURCE: Barrington Broadcasting Group

Barrington Broadcasting Group

November 07, 2011 09:00 ET

Barrington Reports Third Quarter Operating Results

SCHAUMBURG, IL--(Marketwire - Nov 7, 2011) - Barrington Broadcasting Group LLC ("Barrington") announced today its financial results for the three months and nine months ended September 30, 2011. Highlights are as follows:

  • Gross revenues for the quarter ended September 30, 2011 decreased 5.6% to $31.9 million from $33.8 million for the quarter ended September 30, 2010. The decrease was primarily due to a decrease in political revenues of $3.5 million to $0.3 million. Local revenues increased $1.2 million, or 7.0%, to $18.9 million, and national revenues increased $0.5 million, or 6.8%, to $7.1 million. Retransmission revenues increased $0.3 million, or 16.1%, to $2.5 million. Other revenues decreased $0.5 million, or 12.7%, to $3.1 million.

  • Net revenues (gross revenues less agency commissions and other direct costs) for the quarter ended September 30, 2011 decreased 4.8%, or $1.4 million, to $27.4 million from $28.8 million for the quarter ended September 30, 2010.

  • Operating expenses for the quarter ended September 30, 2011, not including depreciation and amortization, increased $1.0 million, or 5.3%, to $19.6 million from $18.6 million for the quarter ended September 30, 2010. The increase was primarily due to increased sales commissions and programming fees.

  • Broadcast Cash Flow (as defined herein) for the quarter ended September 30, 2011 decreased 20.5% to $9.1 million from $11.5 million for the quarter ended September 30, 2010.

  • Gross revenues for the nine months ended September 30, 2011 increased 0.5% to $98.0 million from $97.5 million for the nine months ended September 30, 2010. The increase was primarily due to an increase in local revenues of $3.1 million, or 5.7%, to $58.0 million, and an increase in national revenues of $1.2 million, or 6.1%, to $21.4 million. Political revenues decreased $4.7 million to $1.1 million. Retransmission revenues increased $1.2 million, or 19.7%, to $7.4 million, and other revenues decreased $0.3 million, or 3.3%, to $10.1 million.

  • Net revenues (gross revenues less agency commissions and other direct costs) for the nine months ended September 30, 2011 increased 0.9%, or $0.8 million, to $84.3 million from $83.5 million for the nine months ended September 30, 2010.

  • Operating expenses for the nine months ended September 30, 2011, not including depreciation and amortization, increased $0.9 million, or 1.6%, to $58.1 million from $57.2 million for the quarter ended September 30, 2010.

  • Broadcast Cash Flow for the nine months ended September 30, 2011 decreased 4.0% to $29.8 million from $31.1 million for the nine months ended September 30, 2010.

"Our continued focus on local sales combined with national and retransmission revenue growth produced positive results this quarter. We continue to be committed to the Company's three key priorities of re-engineering of our station-level operations, development of direct local sales strategies, and the growth of the stations' local digital platforms," said K. James Yager, Chief Executive Officer of Barrington Broadcasting.

Conference Call

As previously announced, Barrington will host a conference call to discuss its third quarter results at 3:00 PM (ET) on Monday, November 7, 2011. The dial-in information for the earnings call is as follows: 1-877-941-1467. A telephonic replay of the earnings call will be available beginning on November 7, 2011 at 5:00 PM (ET) and remain available for 30 days. To access the replay, call 1-800-406-7325 (domestic callers) or 303-590-3030 (international callers) and enter access code 4480216#.

During the conference call, representatives of Barrington may discuss and answer one or more questions concerning Barrington's business and financial matters. The responses to these questions, as well as other matters discussed during the call, may contain information that has not been previously disclosed.

Quarterly Report

The information in this press release should be read in conjunction with the financial statements and footnotes contained in Barrington's quarterly report for the quarter ended September 30, 2011 which will be posted on Barrington's website (www.barringtontv.com) on November 11, 2011. Barrington's results for the quarter ended September 30, 2011 are subject to the completion of its quarterly report for such period.

Non-GAAP Financial Measures

Broadcast Cash Flow, EBITDA and Adjusted EBITDA (each as defined in the attachments to this press release) are non-GAAP financial measures (i.e., they are not measures of financial performance under generally accepted accounting principles) and should not be considered in isolation from or as a substitute for consolidated statements of operations and cash flow data prepared in accordance with GAAP. Broadcast Cash Flow, EBITDA and Adjusted EBITDA, as used herein, are not necessarily comparable to similarly titled measures of other companies. For definitions of and additional information regarding Broadcast Cash Flow, EBITDA and Adjusted EBITDA and a reconciliation of such measures to the most comparable measures calculated in accordance with GAAP, please see the attachments to this press release.

Broadcast Cash Flow, EBITDA and Adjusted EBITDA are measures commonly used by financial analysts in evaluating performance of companies, including broadcast companies. Accordingly, Barrington believes that Broadcast Cash Flow, EBITDA and Adjusted EBITDA may be useful in assessing Barrington's operating performance and its ability to meet its debt service requirements. Barrington also believes that these measures allow a standardized comparison between companies in the broadcast industry, while minimizing the differences from depreciation policies, financial leverage and tax strategies.

About Barrington

Barrington was formed in 2003 to acquire and operate television stations in smaller markets across the United States. Barrington currently owns, operates, or supports the operations of twenty four network affiliated television stations. Barrington is owned and controlled by Pilot Group, with management as its partner. Pilot Group is a non-traditional private investment firm founded in 2003 by a group of operating executives who actively help its management partners achieve their goals.

Forward-Looking Statements

The statements in this press release that are not historical facts are forward-looking statements that are subject to material risks and uncertainties. Investors are cautioned that any such forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties, and that actual results or developments may differ materially from those in the forward-looking statements as a result of various factors. Such factors include those risks described from time to time in Barrington's quarterly reports and annual reports which are furnished pursuant to the Indenture dated as of November 11, 2006, by and among Barrington, Barrington Broadcasting Capital Corporation, the guarantors named therein and U.S. Bank National Association, as trustee, as amended, and which are posted on Barrington's website. These factors should be considered carefully and readers are cautioned not to place undue reliance on such forward-looking statements. Barrington does not undertake to update any forward-looking statements in this press release or with respect to matters described herein.

Barrington Broadcasting Group LLC
Consolidated Financial Information
For the Three Months and Nine Months Ended September 30, 2011 and September 30, 2010
(Unaudited)
Three Months Ended Nine Months Ended
(Dollars in thousands) 9/30/2011 9/30/2010 9/30/2011 9/30/2010
Statement of Operations Data:
Net revenue $ 27,424 $ 28,813 $ 84,251 $ 83,467
Expenses:
Operating(1) 18,289 17,394 53,791 52,794
Depreciation and amortization 2,933 3,219 9,574 9,762
Corporate 1,346 1,237 4,301 4,384
Total operating expenses 22,568 21,850 67,666 66,940
Income from operations 4,856 6,963 16,585 16,527
Total net interest expense(2) 3,604 5,655 12,084 16,444
Other income - (967 ) - (1,124 )
Income (loss) before income taxes 1,252 2,275 4,501 1,207
Income tax expense(3) 82 235 291 381
Net income (loss) $ 1,170 $ 2,040 $ 4,210 $ 826
Other Financial Data:
EBITDA(4) $ 7,789 $ 11,149 $ 26,159 $ 27,413
Adjusted EBITDA(5) 7,770 10,222 25,556 26,733
Broadcast Cash Flow(6) 9,104 11,450 29,826 31,059
Balance Sheet Data:
Cash and cash equivalents $ 2,884
Total long-term debt, including current portions(7) $ 181,162
(1) Includes selling, technical, programming (including amortization of program broadcast rights) and general and administrative expenses. Also includes the net operating expenses in connection with Barrington's investment in joint ventures.
(2) For the three months and nine months ended September 30, 2011, net interest expense includes the write off of debt acquisition costs in the amount of $75 and $644, respectively, related to voluntary prepayments and mandatory excess cash flow payments made on the Barrington term loan facility and the voluntary reduction of its revolving facility.
(3) Since Barrington is a limited liability company, federal taxes are passed through to its members and as such no provision has been made for federal income taxes. Income tax expense includes various state tax liabilities.
(4) EBITDA is defined as net income (loss) before income taxes, interest expense, depreciation and amortization. EBITDA is a measure commonly used by financial analysts in evaluating operating performance of companies. Accordingly, management believes that EBITDA may be useful in assessing Barrington's operating performance and Barrington's ability to meet its debt service requirements. A reconciliation of EBITDA to net income (loss) is provided below.
Three Months Ended Nine Months Ended
(Dollars in thousands) 9/30/2011 9/30/2010 9/30/2011 9/30/2010
Reconciliation of EBITDA:
Net income (loss) $ 1,170 $ 2,040 $ 4,210 $ 826
Total net interest expense 3,604 5,655 12,084 16,444
Income tax expense 82 235 291 381
Depreciation and amortization 2,933 3,219 9,574 9,762
EBITDA $ 7,789 $ 11,149 $ 26,159 $ 27,413
(5) Adjusted EBITDA is defined as EBITDA before amortization of program and broadcast rights and network revenues, other non-cash charges, gains or losses on dispositions of assets and other non-recurring items and after program broadcast rights payments and payments from networks. Certain financial covenants in Barrington's credit facility contain ratios based on Adjusted EBITDA and the restricted payment and debt incurrence covenants in the indenture governing Barrington's senior subordinated notes are based on Adjusted EBITDA. In addition, management believes that Adjusted EBITDA may be useful in assessing Barrington's operating performance and Barrington's ability to meet its debt service requirements because Adjusted EBITDA, as opposed to EBITDA, more accurately reflects Barrington's operating performance as it takes into account industry specific adjustments such as amortization of program broadcast rights, program broadcast rights payments, amortization of network revenues, cash payments from networks, as well as gains and losses on dispositions of assets and other non-recurring items. A reconciliation of Adjusted EBITDA to EBITDA is provided below.
Three Months Ended Nine Months Ended
(Dollars in thousands) 9/30/2011 9/30/2010 9/30/2011 9/30/2010
Reconciliation of Adjusted EBITDA:
EBITDA $ 7,789 $ 11,149 $ 26,159 $ 27,413
Amortization of program broadcast rights 1,097 1,241 3,402 3,646
Program broadcast rights payments (1,434 ) (1,280 ) (4,424 ) (3,661 )
Amortization of network revenues(a) (26 ) (71 ) (205 ) (349 )
Cash payments from networks 24 73 195 415
Other adjustments to arrive at Adjusted EBITDA(b) 320 (890 ) 429 (731 )
Adjusted EBITDA $ 7,770 $ 10,222 $ 25,556 $ 26,733
(a) Represents net amounts due from networks which are deferred and amortized over the length of the respective network affiliation agreements.
(b) For the three months ended September 30, 2011 and 2010, consists of severance costs of $308 and $68, respectively. In addition, for the three months ended September 30, 2011, consists of $12 in fees related to the amendment of the Tucker credit facility in December 2010. Also, for the three months ended September 30, 2010, consist of $9 in non-recurring costs in respect of various joint sales and shared service agreements and $967 in gain related to the exchange of assets with Sprint Nextel. For the nine months ended September 30, 2011 and 2010, respectively, consists of separation costs of $398 and $335, as well as $19 and $70 in non-recurring costs in respect of various joint sales and shared service agreements. In addition, for the nine months ended September 30, 2011, consists of $12 in fees related to the amendment of the Tucker credit facility in December 2010. Also, for the nine months ended September 30, 2010, includes a credit received of $12 for fees and expenses related to the amendment of our credit agreement in February 2009 and $1,124 in gain related to the exchange of assets with Sprint Nextel.
(6) Broadcast Cash Flow is defined as Adjusted EBITDA before provision for corporate overhead costs. Broadcast Cash Flow is a measure commonly used by financial analysts in evaluating operating performance of broadcast companies. Accordingly, management believes that Broadcast Cash Flow may be useful in assessing Barrington's operating performance and Barrington's ability to meet its debt service requirements. A reconciliation of Broadcast Cash Flow to Adjusted EBITDA is presented below.
Three Months Ended Nine Months Ended
(Dollars in thousands) 9/30/2011 9/30/2010 9/30/2011 9/30/2010
Reconciliation of Broadcast Cash Flow:
Adjusted EBITDA $ 7,770 $ 10,222 $ 25,556 $ 26,733
Corporate overhead costs(a) 1,334 1,228 4,270 4,326
Broadcast Cash Flow $ 9,104 $ 11,450 $ 29,826 $ 31,059
(a) The addback of corporate overhead costs is reduced by non-recurring costs incurred during the period associated with various joint sales and shared service agreements. For the three months and nine months ended September 30, 2011, the addback of corporate overheads costs is also reduced by fees incurred in connection with the amendment of the Tucker credit agreement in December 2010.
(7) Includes (i) Barrington's guarantee of indebtedness of SagamoreHill of Carolina, LLC and SagamoreHill of Carolina Licenses, LLC, licensee of station WWMB (Barrington programs WWMB pursuant to a local marketing agreement) and (ii) Barrington's guarantee and other credit support with respect to Tucker Broadcasting of Traverse City, Inc., licensee of stations WGTU and WGTQ (Barrington provides sales and support services pursuant to joint sales and shared services agreements).

Contact Information

  • For further information, contact:

    Warren Spector
    Chief Financial Officer
    Barrington Broadcasting Group LLC
    Barrington Broadcasting Capital Corporation
    Tel 847 884 1877
    Fax 847 755 3045
    Email Email Contact