March 16, 2009 — Hoffman Estates, IL
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Barrington Broadcasting Group LLC (“Barrington”) announced today its financial results for the quarter ended December 31, 2008 and for the year ended December 31, 2008.
Results for the three and twelve 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 December 31, 2008 increased $2.7 million, or 7.6%, to $38.1 million from $35.4 million for the quarter ended December 31, 2007. Excluding results of the Acquired Stations, gross revenues increased $1.7 million, or 4.7%, to $37.1 million. The increase was primarily due to an increase in political revenues for the quarter over the prior period of $7.1 million. Political revenues for the quarter ended December 31, 2007 were approximately $1.1 million. Local revenues decreased 16.2%, or $3.4 million, to $17.8 million for the quarter ended December 31, 2008. National revenues decreased 22.5%, or $2.3 million, to $7.8 million for the quarter ended December 31, 2008.
- Net revenues (gross revenues less agency commissions and other direct costs) for the quarter ended December 31, 2008 increased 7.2% to $32.5 million from $30.4 million for the quarter ended December 31, 2007. Excluding results of the Acquired Stations, net revenues increased $1.3 million, or 4.3%, to $31.7 million.
- Operating expenses for the quarter ended December 31, 2008, excluding depreciation and amortization and an impairment of intangible assets and goodwill, increased $0.4 million, or 1.8%, to $21.5 million. Excluding results of the Acquired Stations, operating expenses decreased $0.2 million, or 0.7%, to $20.9 million. The decrease was primarily due to reduced salaries and wages as a result of a workforce reduction that was substantially completed in the second quarter of 2008.
- Broadcast Cash Flow (as defined herein) for the quarter ended December 31, 2008 increased 17.0% to $12.4 million from $10.6 million for the quarter ended December 31, 2007. Excluding results of the Acquired Stations, Broadcast Cash Flow increased 13.2% to $12.0 million.
- Gross revenues for the year ended December 31, 2008 increased 6.2% to $139.8 million from $131.7 million for the year ended December 31, 2007. Excluding results of the Acquired Stations, gross revenues increased $5.4 million, or 4.1%, to $137.1 million for the period. The increase was primarily due to an increase in political revenues of $12.8 million from the prior year to $14.5 million. National revenues decreased 12.2%, or $4.7 million, to $33.9 million for the year ended December 31, 2008. Local revenues decreased $3.4 million, or 4.2%, to $77.9 million.
- Net revenues (gross revenues less agency commissions and other direct costs) for the year ended December 31, 2008 increased 6.1% to $119.4 million from $112.5 million for the year ended December 31, 2007. Excluding results of the Acquired Stations, net revenues increased $4.5 million, or 4%, to $117.0 million.
- Operating expenses for the year ended December 31, 2008, excluding depreciation and amortization and impairment of intangible assets and goodwill, increased 3.7%, or $3.0 million, to $85.2 million from $82.2 million for the year ended December 31, 2007. Excluding results of the Acquired Stations, operating expenses increased $1.4 million, or 1.7%, to $83.6 million, primarily as a result of separation costs related to the workforce reduction that occurred during 2008 as well as increased expenses in website development.
- Broadcast Cash Flow for the year ended December 31, 2008 increased 13.5% to $40.5 million from $35.7 million for the year ended December 31, 2007. Excluding results of the Acquired Stations, Broadcast Cash Flow increased 10.9% to $39.6 million.
“In the fourth quarter, Barrington benefitted from year over year incremental political revenues which offset the increased weakness in local and national advertising as a result of the state of the economy. We have increased our sales presence in our markets and we continue to focus on a more efficient cost structure by seeking to constantly optimize 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”, Barrington tested the impairment of its broadcast licenses and goodwill during the fourth quarter due to continuing unfavorable business conditions, a reduction in value of television stations and the decline of advertising revenues. The amount of the impairment is still being analyzed and has not been included in the results of operations disclosed in this release. However, Barrington expects the impairment to be in excess of $50.0 million. The result of the analysis will be included in Barrington’s annual report.
Capital Contribution, Amendment to Credit Agreement and Purchases of Senior Subordinated
Notes On February 20, 2009, Pilot Group LP, Barrington’s owner, made an equity contribution of $16.0 million to Barrington.
On February 5, 2009, Barrington entered into an Amendment to its Credit Agreement. Among other things, the Amendment, which became effective on February 23, 2009, allows Barrington to use up to $13.0 million of cash for one year after the effective date to purchase and retire a portion of its 10-1/2% Senior Subordinated Notes due 2014 (the “Notes”). To date, Barrington has repurchased $28.2 million aggregate principal amount of the Notes for an aggregate purchase price of $3.5 million. Barrington may seek to retire or purchase additional Notes through cash purchases and/or exchanges for qualified equity securities, in open market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, Barrington’s liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.
Conference Call
As previously announced, Barrington will host a conference call to discuss its fourth quarter and annual results at 11:00 AM (ET) on Tuesday, March 17, 2009. The dial-in information for the earnings call is as follows: 1-800-240-6709. A telephonic replay of the earnings call will be available beginning on March 17, 2009 at 1:00 PM (ET) and remain available for thirty days. To access the replay, call 1-800-405-2236 (domestic callers) or 1-303-590-3000 (international callers) and enter access code 11127869#.
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.
Annual Report
The information in this press release should be read in conjunction with the financial statements and footnotes contained in Barrington’s annual report for the year ended December 31, 2008 which will be posted on Barrington’s website (www.barrington.com) at the end of March 2009. Barrington’s results for the year ended December 31, 2008 are subject to the completion of its annual 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 televisions 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.
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For further information contact:
Warren Spector
Chief Financial Officer
Barrington Broadcasting Group LLC
Barrington Broadcasting Capital Corporation
Phone: 847 884 1877
Fax: 847 755 3045
Email: wspector@barringtontv.com
Web: www.barringtontv.com
