November 14, 2008 — Hoffman Estates, IL
Barrington Broadcasting Group LLC (“Barrington”) announced today its financial results for the three months ended September 30, 2008 and for the nine months ended September 30, 2008. Results for the three and nine months include results of WGTU and WGTQ, stations that Barrington programs and to which it provides support services, beginning April 1, 2008, the date Tucker Broadcasting of Traverse City, Inc. completed the acquisition of these stations (the “Acquired Stations”). Highlights are as follows:
- Gross revenues for the quarter ended September 30, 2008 increased 13.3% to $35.9 million from $31.7 million for the quarter ended September 30, 2007. Excluding results of the Acquired Stations, gross revenues increased $3.4 million, or 10.8%, to $35.1 million. The increase was primarily due to an increase in political revenues of $3.8 million to $4 million. Local revenues increased $0.2 million, or 1.0%, to $19.9 million. National revenues decreased $0.6 million, or 6.3%, to $8.7 million for the quarter ended September 30, 2008.
- Net revenues (gross revenues less agency commissions and other direct costs) for the quarter ended September 30, 2008 increased $3.5 million, or 13%, to $30.6 million from $27.1 million for the quarter ended September 30, 2007. Excluding results of the Acquired Stations, net revenues increased $2.9 million, or 10.5%, to $30 million.
- Operating expenses for the quarter ended September 30, 2008, not including depreciation and amortization and an impairment of intangible assets and goodwill, were unchanged at $20.6 million. Excluding results of the Acquired Stations, operating expenses decreased $0.5 million, or 2.3%, to $20.1 million, primarily as a result of reduced salaries and wages as a result of the workforce reduction that was substantially completed in the second quarter of 2008.
- Broadcast Cash Flow (as defined herein) for the quarter ended September 30, 2008 increased 45.2% to $11.4 million from $7.8 million for the quarter ended September 30, 2007. Excluding results of the Acquired Stations, Broadcast Cash Flow increased 42.9% to $11.2 million.
- Gross revenues for the nine months ended September 30, 2008 increased 5.6% to $101.7 million from $96.2 million for the nine months ended September 30, 2007. Excluding results of the Acquired Stations, gross revenues increased $3.8 million, or 3.9%, to $100 million for the period. The increase was primarily due to an increase in political revenue of $5.7 million to $6.3 million. Local revenues were flat at $60.1 million. National revenues decreased $2.4 million, or 8.6%, to $26 million.
- Net revenues (gross revenues less agency commissions and other direct costs) for the nine months ended September 30, 2008 increased $4.7 million, or 5.7%, to $86.8 million from $82.2 million for the nine months ended September 30, 2007. Not including results of the Acquired Stations, net revenues increased $3.2 million, or 3.9%, to $85.4 million
- Operating expenses for the nine months ended September 30, 2008, not including depreciation and amortization and an impairment of intangible assets and goodwill, increased 4.3%, or $2.6 million, to $63.7 million from $61.1 million for the nine months ended September 30, 2007. Excluding results of the Acquired Stations, operating expenses increased $1.6 million, or 2.6%, primarily as a result of increased website sales and development costs of $1.0 million, as well as severance costs of $.7 million related to the workforce reduction initiated and substantially completed in the second quarter.
- Broadcast Cash Flow for the nine months ended September 30, 2008 increased 11.9% to $28.1 million from $25.1 million for the nine months ended September 30, 2007. Excluding results of the Acquired Stations, Broadcast Cash Flow increased 10.1% to $27.7 million.
For more information regarding this financial information and a definition of Broadcast Cash Flow, see the attachments to this press release.
“In the third quarter Barrington benefitted from year over year incremental revenues associated with the political season and the Olympics, which helped to offset some of the negative impact from weak regional and national advertising revenues. In this economic environment we remain very focused on our transition to a more efficient cost structure by constantly optimizing station-level operations”, said K. James Yager, Chief Executive Officer of Barrington Broadcasting.
Impairment of Intangible Assets
As required by SFAS 142 “Goodwill and Other Intangible Assets”, in addition to the required annual test, Barrington tests the impairment of its broadcast licenses and goodwill whenever events or changes in circumstances indicate that such assets might be impaired. During the quarter Barrington determined that an interim impairment analysis was required due to unfavorable business conditions, a reduction in value of television stations, and the decline of advertising revenues. This testing resulted in a $18.5 million non-cash impairment charge for the quarter ended September 30, 2008.
Conference Call
As previously announced, Barrington will host a conference call to discuss its third quarter results at 11:00 AM (ET) on Monday, November 17, 2008. The dial-in information for the earnings call is as follows: 1-800-257-2101. A telephonic replay of the earnings call will be available beginning on November 17, 2008 at 1:00 PM (ET) and remain available for 30 days. To access the replay, call 1-800-405-2236 (domestic callers) or 303-590-3000 (international callers) and enter access code 11121728#.
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 thereto contained in Barrington’s quarterly report for the quarter ended September 30, 2008 which will be posted on Barrington’s website (www.barringtontv.com) on November 14, 2008. Barrington’s results for the quarter ended September 30, 2008 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 three 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 August 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.
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
wspector@barringtontv.com
