Gray Television today announced that revenue, net income and broadcast cash flow set records in the first quarter of 2015.
Highlights included:
- Record Revenue — Gray revenue for the first quarter of 2015 was $133.3 million, which was the highest for any first quarter in the company’s history, it said. Moreover, total revenue increased $42.0 million, or 46%, for the first quarter of 2015 compared to the first quarter of 2014. Excluding revenue received in the first quarter of 2014 that was related to the Olympic Games, total revenue in the first quarter of 2015 compared to the first quarter of 2014 increased $45.8 million, or 50.1%.
- Record Broadcast Cash Flow — Broadcast cash flow was $46.7 million, which was also the highest for any first quarter in Gray history.
- Record Net Income — Net income was $5.6 million, which was also the highest for any first quarter in its history.
- Record Retransmission Revenue — Retransmission revenue increased significantly to $36.3 million in the first quarter of 2015, which was also the highest for any first quarter in company history.
- Successful Equity Offering — On March 31, Gray completed an underwritten public offering of 13.5 million shares of common stock resulting in net proceeds, after discounts and expenses, of approximately $167.5 million.
- Cash — As of March 31, total cash was $224.6 million.
- Total Leverage Ratio — As of March 31, Gray lowered its total leverage ratio to 5.9 times on a trailing eight quarter basis (calculated under the terms of our senior credit facility); netting all cash on our balance sheet improves this ratio to 4.9 times.
- Pending Acquisitions — Gray announced agreements to acquire KMVT (CBS) and KSVT (Fox) in Twin Falls, Idaho, and WAGM (CBS-Fox) Presque Isle, Maine. The company said it anticipates completing these acquisitions in the third quarter of 2015.
- Digital — On March 5, NBCUniversal and Gray announced an agreement that expands NBCUniversal’s “TV Everywhere” offering of local NBC linear streams beyond the NBC-owned stations for the first time. This deal authorizes the live linear simulcasts of Gray’s 24 NBC affiliated television stations. On April 22, 2015, Gray announced that it had launched five of its CBS affiliates on CBS All Access, CBS’s subscription video on-demand and live-streaming service. Gray’s launch expanded CBS’s direct-to-consumer service into mid-size markets for the first time.
The components of Gray’s revenue for the first quarter of 2015 compared to the first quarter of 2014 were:
- Local advertising revenue increased $17.3 million, or 34%, to $68.3 million.
- National advertising revenue increased $4.4 million, or 33%, to $17.8 million.
- Internet advertising revenue increased $0.5 million, or 8% to $6.5 million.
- Political advertising revenue decreased $1.6 million, or 58%, to $1.2 million.
- Retransmission consent revenue increased $20.1 million, or 125%, to $36.3 million.
- Other revenue increased $1.3 million, or 67%, to $3.3 million.
Gray revenues increased primarily due to the revenue of the 2014 acquired stations and increases in retransmission consent revenue. Local advertising revenue increased primarily due to increased spending in an improving economy. Local and national advertising revenue in the first quarter of 2014 benefited from approximately $3.8 million earned from the broadcast of the 2014 Winter Olympic Games on Gray’s then-14 NBC affiliated stations. There was no corresponding Olympic Games advertising revenue during the first quarter of 2015.
Local and national advertising revenue included approximately $1.5 million of revenue from the broadcast of the 2015 Super Bowl on its 24 NBC channels, an increase of approximately $1.3 million compared to the $0.2 million of revenue from the broadcast of the 2014 Super Bowl on Gray’s then-five Fox channels.
Political advertising revenue decreased due to 2015 being the “off year” of the two-year election cycle.
Retransmission consent revenue increased due to increased retransmission consent rates.
Within Gray’s local and national advertising revenue categories, and excluding the 2014 acquired stations, the company’s five largest customer categories experienced the following changes during the first quarter of 2015 compared to the first quarter of 2014:
- Automotive decreased 1%;
- Medical decreased 2%;
- Communications decreased 1%;
- Restaurant decreased 3%; and
- Furniture and appliances increased 13%.
Factoring out the new station acquisitions, in what Gray calls a “combined historical basis,” total revenue increased $12.5 million, or 10%, to $133.3 million in the first quarter of 2015 as compared to the first quarter of 2014. The combined historical basis components of revenue for the first quarter of 2015 compared to the first quarter of 2014, were approximately as follows:
- Local advertising revenue increased $1.0 million, or 2%, to $68.3 million;
- National advertising revenue increased $0.4 million, or 2%, to $17.8 million;
- Combined local and national advertising revenue increased $1.4 million, or 2%, to $86.1 million;
- Internet advertising revenue decreased $0.1 million, or 2%, to $6.5 million;
- Political advertising revenue decreased $2.4 million, or 67%, to $1.2 million, reflecting the off-year of the two-year election cycle;
- Retransmission consent revenue increased $15.3 million, or 73%, to $36.3 million; and
- Other revenue decreased $1.6 million, or 33%, to $3.3 million.
Read the company’s report here.
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