Nexstar Raises 2015/2016 Free Cash Flow
Guidance to Reflect Transaction Accretion, Ongoing Operating
Strength of Existing Portfolio and Recent Share Repurchase
Activity
Nexstar Broadcasting Group, Inc. (Nasdaq:NXST) (“Nexstar” or
“the Company”) announced today that it entered into a definitive
agreement to acquire the assets of four CBS-affiliated television
stations serving the Minot-Bismarck-Dickinson-Williston, North
Dakota market (DMA #139) (“the market”) for $44.0 million from
Reiten Television, Inc. (“Reiten”). The proposed acquisition is
expected to be immediately accretive to Nexstar’s operating results
upon closing.
In addition, under the terms of the agreement, Nexstar will
provide sales and other services to the market’s two ABC-affiliated
television stations owned by Forum Communications (“Forum”)
pursuant to Reiten’s services agreement with Forum. Nexstar intends
to finance the transaction with cash generated from operations and
borrowings under its senior credit facilities.
The Minot-Bismarck-Dickinson-Williston television DMA is
benefitting from rapid economic expansion related to strong growth
of the U.S. domestic energy production industry in the region. From
2006 to 2015 Nielsen’s market rank for
Minot-Bismarck-Dickinson-Williston has ascended to DMA #139 from
DMA #160, making it one of the fastest rising DMAs in the country.
According to the 2014 BIA Kelsey Television Yearbook the Reiten
television stations are the leading revenue share cluster in the
market.
City of License Market Rank
Station Affiliation 1
Minot, ND 139 KXMC CBS 2
Bismarck, ND 139 KXMB CBS 3
Dickinson, ND 139 KXMA CBS 4
Williston, ND 139 KXMD CBS 5
Minot, ND 139 KMCY* ABC 6
Bismarck, ND 139 KBMY* ABC
* Forum-owned stations where Nexstar will
provide sales and other services.
The planned acquisition of Reiten further broadens Nexstar’s
local television broadcasting and digital media platform with
stations that are geographically complementary to the Company’s
operating base while presenting significant financial and operating
synergies. Upon closing this and other previously announced
transactions, Nexstar’s portfolio of stations that it owns,
operates, programs or to which it provides sales and other
services, will increase to 114 television stations serving 59
markets in 24 states, reaching approximately 20.4 million
television households or 18.0% of all U.S. television
households.
Commenting on the acquisition, Nexstar Broadcasting Group
President and Chief Executive Officer, Perry A. Sook said, “The
Reiten transaction reflects the successful ongoing execution of
Nexstar’s long-term growth strategy to opportunistically expand our
broadcast station and digital media platform through accretive
acquisitions. The Western North Dakota market is a natural
complement to our existing operations in the Upper Midwest region
of the United States and by adhering to our disciplined transaction
criteria, we are acquiring a leading portfolio of market-leading
television stations at an attractive pro-forma multiple of
approximately 6.2 times average 2015/2016 adjusted broadcast cash
flow, which is consistent with other recent Nexstar transactions.
The Reiten family’s legacy in the North Dakota television business
dates back nearly sixty years and consistent with our
organization-wide operating focus we intend to build on their rich
tradition of localized content and programming and community
involvement.
“From 2009 to 2014 television and digital revenue in the
Minot-Bismarck-Dickinson-Williston, North Dakota market have grown
by 61% and Reiten’s operations have generated consistent revenue
and broadcast cash flow growth, both year-to-date and on an
historical basis. Under Nexstar’s ownership, Reiten’s financial
results will benefit from our scale, proven operating disciplines,
expense synergies and growing net retransmission revenues. In this
regard, the acquisition, on a pro-forma basis, is expected to add
an average of approximately $0.15 per share of free cash flow per
year to Nexstar’s operating results over the 2015/2016 period.
“Nexstar’s consistent industry out-performance is the direct
result of our disciplined operating approach, revenue
diversification initiatives and the success we are achieving in
identifying, efficiently financing and integrating selective
accretive station acquisitions. Pro-forma for the completion of
pending transactions as well as the year-to-date and continued
strength in our operating results and approximately one million of
share repurchases completed since the August 2015 authorization, we
are increasing Nexstar’s projected 2015/2016 free cash flow to
approximately $467 million, or average pro-forma free cash flow of
approximately $7.62 per share per year, in this two year period
based on the current share count.
“Since the August 2015 authorization to repurchase up to $100
million of Nexstar shares, the Company has repurchased
approximately one million shares at an average purchase price of
approximately $48.10 per share. We believe repurchasing shares at
recent levels underscores our confidence in the Company’s long-term
prospects based on visible organic and M&A-related growth
opportunities. At the same time, our growing free cash flow affords
us the financial flexibility to continue pursuing additional
accretive transactions, while simultaneously reducing leverage and
returning capital to shareholders through the quarterly cash
dividend and share repurchases.”
The transaction is subject to FCC approval and other customary
approvals, and is expected to close in the late 2015 / early
2016. Kalil & Co., Inc. served as the broker for the
seller in the transaction.
Definitions and Disclosures Regarding non-GAAP Financial
Information
Broadcast cash flow is calculated as income from operations,
plus corporate expenses, depreciation, amortization of intangible
assets and broadcast rights (excluding barter), net loss on asset
disposal and non-cash representation contract termination fee,
minus broadcast rights payments.
Adjusted EBITDA is calculated as broadcast cash flow less
corporate expenses.
Free cash flow is calculated as income from operations plus
depreciation, amortization of intangible assets and broadcast
rights (excluding barter), net loss on asset disposal, non-cash
compensation expense and non-cash representation contract
termination fee, less payments for broadcast rights, cash interest
expense, capital expenditures and net operating cash income
taxes.
Broadcast cash flow, Adjusted EBITDA and free cash flow results
are non-GAAP financial measures. Nexstar believes the presentation
of these non-GAAP measures are useful to investors because they are
used by lenders to measure the Company’s ability to service debt;
by industry analysts to determine the market value of stations and
their operating performance; by management to identify the cash
available to service debt, make strategic acquisitions and
investments, maintain capital assets and fund ongoing operations
and working capital needs; and, because they reflect the most
up-to-date operating results of the stations inclusive of pending
acquisitions, TBAs or LMAs. Management believes they also provide
an additional basis from which investors can establish forecasts
and valuations for the Company’s business.
Reiten Television, Inc.
Reiten Television is a family owned and operated company that
owns four CBS affiliated television stations in the
Minot-Bismarck-Dickinson-Williston, North Dakota DMA and provides
sales and other services to two ABC affiliated stations owned by
Forum Communications in the DMA.
About Nexstar Broadcasting Group, Inc.
Nexstar Broadcasting Group is a leading diversified media
company that leverages localism to bring new services and value to
consumers and advertisers through its traditional media, digital
and mobile media platforms. Nexstar owns, operates, programs or
provides sales and other services to 107 television stations and
related digital multicast signals reaching 58 markets or
approximately 18.0% of all U.S. television households. Nexstar’s
portfolio includes affiliates of NBC, CBS, ABC, FOX, MyNetworkTV,
The CW, Telemundo, Bounce TV, Me-TV, LATV, RTV, Estrella, This TV,
Weather Nation Utah, Movies! and News/Weather. Nexstar’s community
portal websites offer additional hyper-local content and verticals
for consumers and advertisers, allowing audiences to choose where,
when and how they access content while creating new revenue
opportunities.
Forward-Looking Statements
This news release includes forward-looking statements. We have
based these forward-looking statements on our current expectations
and projections about future events. Forward-looking statements
include information preceded by, followed by, or that includes the
words "guidance," "believes," "expects," "anticipates," "could," or
similar expressions. For these statements, the Company claims the
protection of the safe harbor for forward-looking statements
contained in the Private Securities Litigation Reform Act of 1995.
The forward-looking statements contained in this news release,
concerning, among other things, changes in net revenue, cash flow
and operating expenses, involve risks and uncertainties, and are
subject to change based on various important factors, including the
impact of changes in national and regional economies, our ability
to service and refinance our outstanding debt, successful
integration of acquired television stations (including achievement
of synergies and cost reductions), pricing fluctuations in local
and national advertising, future regulatory actions and conditions
in the television stations' operating areas, competition from
others in the broadcast television markets served by the Company,
volatility in programming costs, the effects of governmental
regulation of broadcasting, industry consolidation, technological
developments and major world news events. Unless required by law,
we undertake no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise. In light of these risks, uncertainties and
assumptions, the forward-looking events discussed in this news
release might not occur. You should not place undue reliance on
these forward-looking statements, which speak only as of the date
of this release. For more details on factors that could affect
these expectations, please see our filings with the Securities and
Exchange Commission.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150917006487/en/
Nexstar Broadcasting Group, Inc.Thomas E. Carter,
972-373-8800Chief Financial OfficerorJCIRJoseph Jaffoni /Jennifer
Neuman, 212-835-8500nxst@jcir.com
Nexstar Media (NASDAQ:NXST)
Historical Stock Chart
From Mar 2024 to Apr 2024
Nexstar Media (NASDAQ:NXST)
Historical Stock Chart
From Apr 2023 to Apr 2024