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Nexstar Broadcasting Group Inc. Reports Operating Results (10-Q)

November 09, 2011 | About:
10qk

10qk

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Nexstar Broadcasting Group Inc. (NXST) filed Quarterly Report for the period ended 2011-09-30.

Nexstar Broadcasting Group Inc. has a market cap of $271 million; its shares were traded at around $9.41 with a P/E ratio of 94.1 and P/S ratio of 0.8. Nexstar Broadcasting Group Inc. had an annual average earning growth of 2.3% over the past 5 years.

Highlight of Business Operations:

Gross local advertising revenue was $43.3 million for the three months ended September 30, 2011, compared to $41.7 million for the same period in 2010, an increase of $1.6 million, or 3.9%, of which $1.9 million related to the acquisition of WFRV and WJMN. Gross national advertising revenue was $16.3 million for the three months ended September 30, 2011, compared to $15.0 million for the same period in 2010, an increase of $1.3 million, or 9.0%, of which $1.0 million related to the acquisition of WFRV and WJMN. Excluding WFRV and WJMN, gross local and national advertising revenue was consistent with the prior year. Within our customer categories, we saw an increase in advertising from automotive of $0.5 million, school and instruction of $0.5 million and department and retail stores of $0.3 million, which was offset by a decrease in advertising from media (radio, television, cable and newspapers) of $0.6 million, grocery stores of $0.3 million and paid programming of $0.3 million during the third quarter of 2011 compared to the prior year. The increase in automotive advertising was primarily driven by increases in domestic manufacturers and dealers, particularly Ford and GM, and was partially offset by decreases in foreign manufacturers, most notably Toyota. The increase in school and instruction advertising was primarily driven by increases in advertising from higher education and vocational schools, both from existing and new customers. The decrease in media advertising was primarily driven by the timing of spending by cable providers on their annual advertising commitments.

Retransmission compensation was $10.0 million for the three months ended September 30, 2011, compared to $7.6 million for the same period in 2010, an increase of $2.3 million, or 30.5%. The increase in retransmission compensation was primarily the result of renegotiated contracts providing for higher rates per subscriber during the year and additional revenue from WFRV and WJMN of $0.5 million.

Gross local advertising revenue was $132.3 million for the nine months ended September 30, 2011, compared to $126.8 million for the same period in 2010, an increase of $5.5 million, or 4.3%, of which $1.9 million related to the acquisition of WFRV and WJMN. Gross national advertising revenue was $47.7 million for the nine months ended September 30, 2011, compared to $45.9 million for the same period in 2010, an increase of $1.9 million, or 4.1%, of which $1.0 million related to the acquisition of WFRV and WJMN. Excluding WFRV and WJMN, gross local and national advertising revenue increased by $4.4 million, which was largely the result of an increase in advertising from automotive of $1.8 million, which provided 20.4% and 19.9% of our core local and national advertising revenue for the nine months ended September 30, 2011 and 2010, respectively. The increase in automotive advertising was primarily driven by increases in domestic manufacturers and dealers, particularly Ford and GM, and was partially offset by decreases in foreign manufacturers, most notably Toyota. Additionally, we had increases in advertising from department and retail stores of $1.2 million, school/instruction of $0.9 million, home repair and manufacturing of $0.5 million and insurance of $0.5 million, which was partially offset by a decrease in advertising from grocery stores of $0.6 million and media (radio, television, cable and newspapers) of $0.6 million during the first nine months of 2011 compared to the prior year. The increase in department and retail store advertising was primarily driven by increases in local retailers as well as BonTon, Walmart and Shoe Carnival. The increase in school and instruction advertising was primarily driven by increases in advertising from higher education and vocational schools, both from existing and new customers.

Retransmission compensation was $27.1 million for the nine months ended September 30, 2011, compared to $22.3 million for the same period in 2010, an increase of $4.8 million, or 21.6%. The increase in retransmission compensation was primarily the result of renegotiated contracts providing for higher rates per subscriber during the year and additional revenue from WFRV and WJMN of $0.5 million.

Station direct operating expenses, consisting primarily of news, engineering and programming, and selling, general and administrative expenses (net of trade expense) were $116.2 million for the nine months ended September 30, 2011, compared to $109.7 million for the same period in 2010, an increase of $6.5 million, or 5.9%. The increase was primarily attributed to an increase of $2.2 million in station expenses of WFRV and WJMN, an increase of $1.4 million in national, local and eMedia sales commissions due to an increase in local, national and eMedia revenue, an incremental $0.5 million in fees paid to Sinclair for our outsourcing arrangements in Peoria and Rochester, as revenues and broadcasting cash flows for those stations increased year-over-year, an increase of $0.5 million in bad debt expense and an increase of $0.4 million in employee health care costs, due to some large claims during the year.

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