QUARTERLY REPORT

Tegna 4Q Revenue Climbs 8%

The increase to $694 million was driven by acquisitions and continued growth in subscription revenue and advertising and marketing services, which more than offset the absence of $140 million of political revenue in the same period last year.

Tegna this morning released fourth quarter 2019 results that included total revenue of $694 million, up 8% year-over-year.

Adjusted total company revenue, excluding political, was up 33% year-over-year.

Subscription revenue came in at $287 million and was up 31% due to increased subscribers from new stations acquired mid-third quarter, as well as negotiated rate increases.

Net income in the quarter from continuing operations was $84 million, down $77 million due to the cyclical absence of political revenue, and non-GAAP net income was $103 million.

Total company adjusted EBITDA was $229 million, down $44 million year-over-year as a result of the cyclical absence of high-margin political advertising revenue of $140 million in 4Q 2018.

Dave Lougee, Tegna president-CEO, said: “Tegna ended the year on a high note, driven by excellent performance across our business and strong momentum from our key growth drivers. Our full-year 2019 results demonstrate the power of our five-pillar strategy for shareholder value creation as we execute and drive organic and inorganic growth across the business.

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“In 2019, Tegna completed $1.5 billion of strategic acquisitions, expanding our reach into key markets and further increasing our scale. These deals were executed at attractive multiples and have been free cash flow accretive from day one. Projected synergies are on track to exceed our initial expectations. With seven percentage points remaining under the FCC ownership cap, strong cash flows and financial flexibility, we remain well-positioned for further consolidation opportunities.

“We have also bolstered our balance sheet by completing two senior note offerings at attractive interest rates, and by extending the term of our revolving credit facility. We remain on track to delever to approximately 4.0x by the end of 2020, increasing our financial flexibility to allow for continued, thoughtful capital deployment that creates value for our shareholders.

“Looking ahead, subscription and political advertising will represent about half of Tegna’s revenues in the 2019-20 cycle and higher going forward, and are relatively immune from secular trends. We have repriced roughly half of our subscribers to date and will have repriced 85 percent by the end of this year. The significant rate increases we have locked in for the first year, and subsequent rate escalators for the following years, continue to support our top-of-market Big Four retransmission rates.

“We are more confident than ever that 2020 will be a record year for political advertising, producing at least $300 million in revenue. Through our recent acquisitions, we have strategically expanded our portfolio to include additional key political markets and are primed to benefit from expected record levels of expenditures. The pace of spending is accelerating much earlier than in prior cycles, demonstrating that broadcast television is the outlet of choice, especially in many key battleground states where, as a result of our thoughtful approach to strategic M&A, we are extremely well-positioned to capture a meaningful amount of this spend.

“We expect, and are more confident than ever, that Tegna is poised for a record year as a result of prior investments and operational excellence.”

Read the company’s report here.


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