Nexstar Rev. Climbs 35% In 4Q, 24% For Year

Nexstar Broadcasting Group today reported financial results for the fourth quarter and year-ended Dec. 31, 2012, that included a 34.8% increase in net revenue to $116.2 million in the fourth quarter compared to the year earlier quarter. For the full year, revenue rose 23.5% to $306.5 million.

The net revenue growth drove 4Q operating income to $35.4 million, adjusted EBITDA of $48.1 million and free cash flow of $28.7 million. 2012 full year free cash flow rose 135.5% to $80.5 million on 23.5% net revenue increase to $378.6 million.

Perry A. Sook, the company’s chairman, president and CEO, commented: “The 34.8% rise in fourth quarter net revenue concluded what was already a record year financially for Nexstar. Our strong financial results were primarily driven by record-breaking political advertising sales, higher core television ad revenue, growing retransmission consent revenues, and our 24th consecutive quarter of e-Media revenue increases. We also benefited from a month of operations related to the accretive acquisition of 10 television stations from Newport Television.

“Fourth quarter BCF, EBITDA and free cash flow increases of 61.2%, 62.6% and 87.2%, respectively, reflect significant margin growth related to the leverage in our operating model as well as the value of our initiatives to diversify revenues, maximize the political advertising opportunity, manage costs and actively expand our operations through strategic, accretive station acquisitions.

“During the fourth quarter, we successfully managed inventory to maximize our share of election spending in our markets without materially impacting our core television business. Notably, excluding political, gross revenue in the fourth quarter grew over 10%, as we continued to successfully leverage the value of our traditional television broadcasting operating model into a diversified platform with multiple high margin revenue streams.

“The company’s core local and national ad fourth quarter revenue growth of 8.8% benefited from a 12% rise in automotive advertising and was complemented by a 55.9% rise in retransmission fee revenue and 24.9% increase in e-Media revenue which benefited from a month of operations of Inergize Digital.

“Nexstar’s annual retransmission revenue growth of 63% largely reflects our 2011 contract renewals with our distribution partners and we expect the long-term growth trend from this revenue source to continue as additional contract renewals are negotiated at year-end 2013.

“Fourth quarter 2012 net revenue rose 45% over the same period in 2008, the last Presidential election year, while free cash flow was up over 300% over the same period which clearly illustrates the operating leverage being derived from our revenue diversification and platform building strategies.

“The combination of our operating successes and accretive station transactions has positioned Nexstar to maintain a strong leverage profile while allowing us to also return capital to shareholders through cash dividends. Last week, we paid our first quarterly cash dividend of $0.12 per share of Class A and Class B common stock. The annual capital allocated to dividend payments at this time of approximately $14.2 million relative to the total free cash flow that Nexstar now generates, provides us with ample liquidity to reduce leverage, evaluate additional accretive station acquisitions and pursue other initiatives to enhance long-term shareholder value.”