Political Ads, Tribune Acquisition Fuel Third Quarter Jump In Nexstar Revenues, Income

Big Q3

Fueled by the addition of TRIBUNE MEDIA's television properties and political advertising, NEXSTAR MEDIA GROUP third quarter revenue jumped 68.5% to $1.12 billion, with political revenue up 1,114.7% to $132.4 million and distribution fee revenue up 82.6% to $538.4 million. Income from operations jumped 182.5% to $343.6 million, while net income increased 3,756.1% to $189.313. Adjusted EBITDA rose 209.1% to $443.6 million, and Free Cash Flow increased 268.3% to $219 million. The company does not break out results for its sole radio property, News-Talk WGN-A/CHICAGO.

Chairman/CEO PERRY A. SOOK said, “During the third quarter we continued to successfully navigate the challenges presented by the pandemic thanks to our outstanding operating teams and their ability to adapt and dynamically manage the business for continued growth. NEXSTAR delivered record third quarter operating results with net revenue, profitability, and cash flow metrics all exceeding consensus expectations. Third quarter net revenue increased 68.5% and with the strong operating leverage in our business model, NEXSTAR generated record third quarter BCF, adjusted EBITDA and free cash flow with these metrics growing 128.3%, 209.1% and 268.3%, respectively on a year over year basis. In addition, throughout the quarter, we made significant progress with our leverage reduction and return of capital initiatives as we lowered net debt by $162.5 million and allocated $150.4 million toward share repurchases and quarterly cash dividends.

“Reflecting our continued focus on optimizing our capital structure and lowering our cost of capital, during the quarter we completed two capital market transactions that allowed us to eliminate our most expensive debt while extending maturities. The resulting interest expense savings, combined with the declining borrowings and attractive rate environment, will allow us to de-lever even more quickly and increase reported free cash flow, while affording us the financial flexibility to act on other opportunities to enhance shareholder value. We generated approximately $854 million of free cash flow in the first nine months of the year (before one-time transaction expenses) and with expectations for a robust fourth quarter, NEXSTAR will finish 2020 with net leverage below 4x. Reflecting the repurchase of 2,250,000 shares in 2020 to-date, we have reduced our issued and outstanding share count to approximately 44.0 million and with the recent expansion of our repurchase authorization, we remain on plan to continue to return capital to shareholders while aggressively reducing leverage."

SOOK noted, “Third quarter 2020 total digital revenue declined approximately 5.0%, due to de-emphasizing unprofitable lines of business and softer local customer buying trends related to the pandemic. However, digital profitability was up substantially over the comparable prior-year period and digital engagement statistics remain significant and continue to show a 20% increase over the prior year. Last month we announced an operational realignment whereby we combined NEXSTAR’s broadcasting and digital operating subsidiaries under the NEXSTAR INC. name. The new operational structure and appointment of proven divisional leaders is intended to accelerate our growth by leveraging our leading local content to maximize its value, our national reach, and significant consumer digital usage across multiple platforms. We expect a mid-seven figure expense savings in 2021 as a result of the synergies, efficiencies, and streamlined reporting structure resulting from this realignment."

« see more Net News