Nexstar Broadcasting Group Inc. has a market cap of $163.4 million; its shares were traded at around $5.8 with and P/S ratio of 0.6. NXST is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:In April 2010, the Third Amendment became effective to Nexstar Broadcasting s Fourth Amended and Restated Credit Agreement among Nexstar Broadcasting, Nexstar, and lenders. Under the terms of the Nexstar Credit Agreement, the principal amount available under the revolving credit facility was reduced to $65.0 million, and the Term Loan B was reduced to $61.0 million. In April 2010, the Second Amendment became effective to Mission Broadcasting s Third Amended and Restated Credit Agreement. Under the terms of the Mission Credit Agreement, the principal amount available under the revolving credit facility was reduced to $10.0 million, and the term loan B was reduced to $39.0 million.
In April 2010, Nexstar Broadcasting completed the cash tender offer to retire $34.3 million (representing 82.5% of the outstanding aggregate principal amount) amount of the Senior Subordinated PIK Notes due 2014 at 104.5%. In connection with this tender offer, a second supplemental indenture was executed whereby substantially all restrictive covenants and certain event of default provisions were eliminated. In May 2010, Nexstar Broadcasting repurchased an additional $2.0 million of the Senior Subordinated PIK Notes due 2014 at 106.5%. In September 2010, Nexstar Broadcasting redeemed the remaining $5.3 million of the Senior Subordinated PIK Notes due 2014 at 109.75%. These transactions resulted in a loss of approximately $2.6 million.
In June through August 2010, Nexstar Broadcasting purchased approximately $6.7 million of the 7% Senior Subordinated PIK notes due 2014 at 88.8% to 90.25% and approximately $0.9 million of the 7% Senior Subordinated Notes due 2014 at 93%. These transactions resulted in gains totaling approximately $0.7 million.
In January 2010, the Compensation Committee approved the repricing of outstanding options with an exercise price of $5.00 or more to a new exercise price equal to the current closing price of the stock of $4.56 per share. In May 2010 the shareholders of Nexstar approved the repricing. The total incremental cost of the repricing was calculated to be approximately $1.8 million, which represents the incremental fair value of the awards. Of the $1.8 million total incremental cost, approximately $1.6 million has been recognized and included in selling, general & administration expense as of September 30, 2010. The remaining unrecognized incremental cost will be recognized in addition to the cost (fair value) of the original awards, which will continue to vest and amortize just as they did before the modification.
Our net revenue increased 21.5% to $216.3 million for the nine months ended September 30, 2010, compared to $178.0 million for the nine months ended September 30, 2009 partially due to increases in local and national advertising due to an overall upswing in the economy from the same period in 2009.
Political advertising revenue was $16.7 million for the nine months ended September 30, 2010, an increase of $14.4 million or greater than six times the $2.3 million for the nine months ended September 30, 2009. The demand for political advertising is generally higher in even-numbered years, when congressional and presidential elections occur, than in odd-numbered years when there are no federal elections scheduled. Since 2010 is an election year, we expect significantly more political advertising revenue to be reported in 2010 in relation to the amount of political advertising reported in 2009.
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