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

May 14, 2010 | About:
10qk

10qk

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Nexstar Broadcasting Group Inc. (NXST) filed Quarterly Report for the period ended 2010-03-31.

Nexstar Broadcasting Group Inc. has a market cap of $203 million; its shares were traded at around $7.14 with and P/S ratio of 0.9. NXST is in the portfolios of Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

Gross local advertising revenue was $41.7 million for the three months ended March 31, 2010, compared to $35.9 million for the same period in 2009, an increase of $5.8 million, or 16.2%. Of this increase, approximately $1.5 million is due to the addition of WCWJ in May 2009. Gross national advertising revenue was $14.7 million for the three months ended March 31, 2010, compared to $12.1 million for the same period in 2009, an increase of $2.6 million, or 21.8%. Of this increase, approximately $0.7 million is due to the addition of WCWJ in May 2009. Advertising revenue from automotive, furniture and attorneys business categories increased by approximately $3.2 million, $0.5 million and $0.6 million during the first quarter of 2010 compared to the prior year, respectively.

Retransmission compensation was $7.4 million for the three months ended March 31, 2010, compared to $5.3 million for the same period in 2009, an increase of $2.1 million, or 39.9%. The increase in retransmission compensation was primarily the result of new contracts being added during the second half of 2009 and the beginning of 2010 which totaled approximately $1.5 million, the addition of WCWJ in May 2009 resulting in an increase of $0.2 million, combined with certain increases in billing and subscription rates of approximately $0.4 million.

Corporate expenses, related to costs associated with the centralized management of Nexstar s and Mission s stations, were $4.8 million for the three months ended March 31, 2010, compared to $6.8 million for the three months ended March 31, 2009, a decrease of $2.0 million, or 29.8%. The decrease during the three months ended March 31, 2010 was primarily attributed to the non-recurring $2.9 million in fees associated with the March 2009 7% Notes exchange offer including bank, legal and accounting fees, partially offset by an increase in bonus expense accruals of $0.5 million during the three months ended March 31, 2010.

Station direct operating expenses, consisting primarily of news, engineering and programming, net of trade, and selling, general and administrative expenses were $35.9 million for the three months ended March 31, 2010, compared to $34.5 million for the same period in 2009, an increase of $1.4 million, or 3.9%. The increase in station direct operating expenses, net of trade, and selling, general and administrative expenses for the three months ended March 31, 2010 was primarily attributed to increases in national and local sales commissions of approximately $1.0 million, the addition of WCWJ in May 2009 of approximately $0.7 million, combined with increases in payments to Sinclair at WMBD and WROC of approximately $0.5 million, partially offset by a reduction in utility costs from the elimination of the analog transmission and the 2009 regionalization of certain accounting and traffic functions which resulted in a reduction in workforce.

Income from operations was $9.8 million for the three months ended March 31, 2010, compared to a loss of $1.3 million for the same period in 2009, an increase of $11.1 million or 849.4%. The increase was primarily the result of the overall increase in net revenue of $13.1 million, partially offset by the decrease in gain on asset exchange of $1.6 million.

For the three months ended March 31, 2010, the Company purchased approximately $1.0 million of its outstanding Senior Subordinated PIK Notes for $0.9 million, plus accrued interest of $27 thousand. This transaction resulted in a gain of $0.1 million. During the three months ended March 31, 2009, the Company purchased $27.9 million of its 11.375% Notes and $1.0 million of its 7% Notes for a total of $10.0 million, plus accrued interest of $1.0 million. These transactions resulted in combined gains of $18.6 million for the three months ended March 31, 2009.

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