Gray Television today reported record second quarter revenue of $196.6 million, the highest of any quarter in the company’s history. Moreover, total revenue increased $53.2 million, or 37%, for the second quarter of 2016 when compared to the three months ended June 30
Net income was $17.7 million for 2Q 2016, which was the highest for any second quarter in its history and a 46% increase from the second quarter of 2015.
Second quarter broadcast cash flow was $79.3 million, which was also the highest for any second quarter in its history and a 38% increase from the second quarter of 2015.
Gray earned $9.6 million in political advertising revenue during the second quarter of 2016.
The record-setting 2Q performance resulted in basic net income per share of $0.25.
On a pro forma basis (what Gray calls “Combined Historical Basis”), total revenue increased 8%, net income increased 6% and broadcast cash flow increased 4% in the second quarter of 2016 compared to the second quarter of 2015. In addition, on a Combined Historical Basis, broadcast operating expenses, excluding network compensation fees, were virtually unchanged in the second quarter of 2016, when compared to 2Q 2015.
The expected increases in network compensation fees were offset by increases in gross retransmission revenue.
In the first six-months of 2016, when compared to the first six months of 2015 on a Combined Historical Basis, Gray’s national sales commission expenses decreased more than $2 million as a result of its termination of substantially all of its national sales representation agreements at the beginning of 2016. “We have reduced our national sales commission expenses while building a positive and direct relationship with our national sales customers,” Gray said.
Historically, Gray has reported its local television advertising revenues and its internet/digital/mobile advertising revenues separately. Beginning in 2016, it is reporting a single line item identified as “Local (including internet/digital/mobile)” which will combine both its local television ad revenues and its internet/digital/mobile advertising revenues.
First quarter financial highlights included:
Total revenue increased $53.2 million, or 37%, to $196.6 million for the second quarter of 2016 compared to the second quarter of 2015. Total revenue from the 2016 Acquired Stations and 2015 Acquired Stations, collectively, accounted for approximately $46.8 million of our total revenue, or 88% of the increase from the second quarter of 2015, with the remaining revenue increases resulting from our stations owned since the start of 2015. The 2015 Acquired Stations did not contribute any revenue during the second quarter of 2015 because all of the 2015 Acquired Stations were acquired after June 30, 2015.
The company said the revenue increase was due to increases in retransmission revenue, due primarily to increased retransmission consent rates; and increases in political advertising revenue, due to 2016 being the “on-year” of the two-year election cycle.
The principal types of revenue were:
- Local advertising revenue (including internet/digital/mobile) increased $21.6 million, or 26%, to $104.7 million.
- · National advertising revenue increased $7.1 million, or 38%, to $26.1 million.
- · Political advertising revenue increased $7.5 million, or 339%, to $9.6 million.
- Retransmission consent revenue increased $13.6 million, or 37%, to $50.5 million.
- Other revenue increased $3.3 million, or 143%, to $5.6 million.
Within Gray’s local and national advertising revenue categories, and excluding the 2016 Acquired Stations and 2015 Acquired Stations, its five largest customer categories experienced the following approximate changes during the second quarter of 2016 compared to 2Q 2015:
- Automotive increased 5%
- Medical decreased 4%
- Restaurant decreased 4%
- Furniture and appliances increased 4%
- Communications decreased 15%
On a Combined Historical Basis, total revenue increased $15.2 million, or 8%, to $198.0 million in the second quarter of 2016 as compared to the second quarter of 2015. On a Combined Historical Basis, the principal types of revenue for the second quarter of 2016, compared to the second quarter of 2015, were approximately as follows:
• Local advertising revenue (including internet/digital/mobile) was unchanged at $105.3 million.
• National advertising revenue decreased $0.8 million, or 3%, to $26.2 million.
• Political advertising revenue increased $7.5 million, or 288%, to $10.1 million.
• Retransmission consent revenue increased $8.1 million, or 19%, to $50.8 million.
• Other revenue increased $0.5 million, or 9%, to $5.6 million.
Within local and national advertising revenue types, and including revenue from the 2016 Acquired Stations and 2015 Acquired Stations, Gray’s five largest customer categories experienced the following approximate changes during the second quarter of 2016, compared to the second quarter of 2015: · Automotive increased 5%;
- · Medical decreased 3%
- · Restaurant decreased 1%
- · Furniture and appliances increased 6%
- · Communications decreased 12%
Read the company’s report here.
stock price close to 52 wk low……