Nexstar’s 4Q Net Revenue Down 9.5%

Nexstar Media Group this morning reported financial results for the fourth quarter of 2021 that included net revenue of $1,245,838, a decrease of 9.5% from the same quarter of 2020. However, excluding political advertising revenue, net revenue increased 13.8% year-over-year.

The 4Q revenue comprised:

• Core ad revenue totaled $494 million, up 4.3% from 4Q 2020.
• New-to-television revenue of $37 million increased 33% year-over-year.
• Political ad revenue was $19 million, down 93.7%.
• Distribution fee revenue grew 16.6% to $616 million.
• Digital revenue climbed 56.3% to $102 million.
• Other revenue grew 31.8% to $16 million.

Income from operations was $324.8 million, down 38.8%.

Net income totaled $262.3 million, a decrease of 27.7% from 4Q 2020.

Free cash flow was $327 million, down 26.2% from $443 million.

For the full year, the company reported:

• Record full year net revenue of $4.65 billion increased 3.3% over the prior year.
• Record full year core television advertising revenue of $1.76 billion increased 12% over the prior year.
• Record full year distribution revenue of $2.47 billion increased 14.9% over the prior year.
• Record full year digital revenue of $323 million increased 44.4% over the prior year.

Perry A. Sook, Nexstar chairman, president and CEO, said: “In 2021, Nexstar generated all-time high net revenue and record non-election year Adjusted EBITDA, once again exceeding consensus expectations. Our results leveraged an improving and strong core television advertising market, the positive impact of 2020 distribution agreement renewals and double-digit growth in our core digital business, aided by recent content-driven digital acquisitions. Our operating model, which prioritizes free cash flow, resulted in Nexstar generating record non-election year free cash flow, enabling us to invest in our platform and in complementary accretive acquisitions, while reducing our debt-load and returning approximately 53% of our free cash flow to our shareholders in the form of dividends and share repurchases.”

“We are enthusiastic about Nexstar’s opportunities for the foreseeable future and have excellent three-year visibility. While early, this year is off to an excellent start and we expect 2022 operating results will benefit from strong mid-term election year political advertising. Looking ahead, 2023 will benefit from the renegotiation of our distribution contracts representing more than half of our subscribers during 2022, and 2024 will benefit from presidential election year political advertising and additional distribution contract renewals. For the 2022/2023 cycle, we expect to generate pro forma average annual free cash flow of approximately $1.40 billion.”

“Consistent with our capital allocation priorities and focus on enhancing shareholder value, in January, the board of directors increased Nexstar’s quarterly cash dividend by approximately 29% to $0.90 per share. The double-digit increase in Nexstar’s dividend for the ninth consecutive year, ongoing opportunistic share repurchases and our free cash flow growth will allow us to continue delivering industry leading risk-adjusted returns to our shareholders. Last month our board also approved a plan to eliminate our Class B and C shares which will be voted on at our annual shareholders’ meeting in June, highlighting another corporate governance action intended to benefit all shareholders.”

“With solid operating momentum across our business and projected record financial performance in 2022, Nexstar has confidence in delivering our free cash flow targets, which will provide us with the financial flexibility to pursue and expand strategic organic growth initiatives, including accretive M&A, while supporting growing shareholder returns.”

Read the company’s report here.