Fisher Communications, Inc. (NASDAQ: FSCI), a leader in local media
innovation, today reported its financial results for the third
quarter ended September 30, 2012.
Management Commentary "Fisher's positive
momentum continued throughout the third quarter, led by the
strength of our stations, strong political spending and new
retransmission agreements," said Colleen B. Brown, Fisher's
President and Chief Executive Officer. "Our stations delivered
audience share and revenue growth, as we continue to leverage the
Company's key set of multiplatform offerings to our competitive
advantage."
"As we look ahead to 2013, we remain focused on expanding our
trusted local news brands, as well as providing advertisers the
highly effective broadcast and on-line mediums to better reach
their customers. These are hallmarks of Fisher and the pillars that
will enable us to deliver value to our audiences, business partners
and shareholders."
Third Quarter Financial Highlights (All
financial comparisons are made to the third quarter of 2011 unless
otherwise noted.)
Fisher's consolidated revenue was $39.9 million, up slightly
from the third quarter of 2011. Excluding Fisher Plaza revenues
from the third quarter of 2011, Fisher's consolidated revenue
increased 11% year-over-year.
Total consolidated direct operating, selling, general and
administrative and programming expenses for the third quarter of
2012 increased 6%, or $2.0 million, compared to the third quarter
of 2011. Last year's third quarter results included one-time
savings of $0.9 million related to the Company's revised vacation
policy and the third quarter of 2012 included Plaza rent expense of
$1.4 million, $0.8 million of costs related to various strategic
initiatives and $0.6 million of increased network fees. Excluding
the items noted above, our remaining expenses were 5% lower year
over year.
EBITDA was $5.4 million in the third quarter of 2012, which
included $1.4 million of Fisher Plaza rent expense. This represents
a decrease of 22% from $6.8 million in the prior year period, which
included $2.3 million of Plaza EBITDA.
Adjusted EBITDA (excluding Plaza rent expense in 2012 and Plaza
EBITDA in 2011) was $6.8 million in the third quarter of 2012, an
increase of 48%, or $2.2 million, from the same period in 2011.
Highlights for the Company's television segment are as
follows:
- Net TV revenue, excluding political revenue, increased 5% to
$31.0 million.
- Political revenue increased 285% to $3.6 million and
retransmission revenue increased 83% to $6.3 million.
- TV cash flow increased 55%, or $3.7 million, to $10.5
million.
Balance Sheet and Liquidity
- Cash and short-term investments were $103.8 million at
quarter-end, compared to $176.5 million at the end of 2011.
- Cash used in operating activities for the year of $1.9 million
consists of $23.1 million of cash generated from operations offset
by $21.7 million in estimated 2011 tax payments, net of refunds
received, $1.5 million of debt extinguishment costs and $1.8
million of interest payments on the Company's retired senior notes.
In August, the Company announced a one-time special cash dividend
of $10.00 per share payable on October 19, 2012. The Company will
use its existing cash and short-term investments to fund the
dividend, which totals approximately $89 million.
- The Company remained debt-free, after using its strong cash
position to redeem the remaining $61.8 million of outstanding
principal for the Company's senior notes in the first quarter of
2012.
- In August, the Company announced it received a commitment
letter from JPMorgan Chase Bank for a five-year $30 million senior
secured revolving credit facility. The Company expects to establish
the facility in the fourth quarter of 2012.
Quarterly Dividend As previously
announced, the Company's Board of Directors approved a quarterly
dividend policy in August 2012. In accordance with the policy, the
Company has declared a quarterly cash dividend of $0.15 per share
on its common stock payable on December 17, 2012, to shareholders
of record at the close of business on November 30, 2012.
Third Quarter Conference Call Fisher will
host a conference call today at 1:00 p.m. (PDT). Senior management
will discuss the financial results and host a question and answer
session. The dial-in number for the audio conference call is
1-866-730-5771; confirmation code 71674211#. A live audio webcast
of the call will be accessible to the public on Fisher's website,
www.fsci.com. A recording of the webcast will subsequently be
archived on the website and available for replay for one week
following the call. An audio replay of the call can be accessed for
one week by dialing 1-888-286-8010 and entering confirmation code
61098661#.
Definitions and Disclosures Regarding Non-GAAP
Financial Information The Company reports and discusses its
operating results using financial measures consistent with
generally accepted accounting principles (GAAP) and believes this
should be the primary basis for evaluating its performance.
The preceding discussion of our results includes a discussion of
non-GAAP financial measures such as Television cash flow, Radio
cash flow, Broadcast cash flow and Earnings before Interest, Taxes,
Depreciation and Amortization (EBITDA) and Adjusted EBITDA. These
non-GAAP measures should not be viewed as alternatives or
substitutes for GAAP reporting.
The Company believes the presentation of these non-GAAP measures
is 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; and 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, time
brokerage agreements or local marketing agreements. Management
believes they also provide an additional basis from which investors
can establish forecasts and valuations for the Company's
business.
Television and radio cash flow are calculated as television and
radio segment income (loss) from operations plus amortization of
broadcast rights, non-cash charges, Internet and trade expenses
minus payments for broadcast rights and Internet revenue. Broadcast
cash flow is calculated by adding the Television and radio cash
flow.
EBITDA is calculated as income (loss) from operations plus
amortization of broadcast rights; depreciation and amortization;
stock-based compensation; loss on disposal of property, plant and
equipment, net; proxy related costs; and non-cash charges minus
payments for broadcast rights; gain on sale of real estate, net;
Plaza fire reimbursements, net; and amortization of non-cash
benefit resulting from a change in national advertising
representation firm.
Adjusted EBITDA excludes Fisher Plaza rent expense in the third
quarter of 2012 and Plaza EBITDA in the third quarter of 2011.
Plaza EBITDA is calculated as Plaza segment income (loss) from
operations. Management believes this presentation of Adjusted
EBITDA is useful to investors because it provides investors with a
comparable measure given the impact of the disposition of Fisher
Plaza.
For a reconciliation of these non-GAAP financial measurements to
the GAAP financial results cited in this press release, please see
the supplemental tables at the end of this release.
About Fisher Communications, Inc. Fisher
Communications, Inc. is a Seattle-based communications Company that
owns and operates 13 full power television stations, 7 low power
television stations, 3 owned radio stations and one managed radio
station in the Western United States. The Company also owns and
operates Fisher Interactive Network, its online division (including
over 120 online sites) and Fisher Pathways, a satellite and fiber
transmission provider. For more information about Fisher
Communications, Inc., go to www.fsci.com.
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," "intends," "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, including, among other things, statements related to
changes in 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, the competitiveness of political races and
voter initiatives, 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 the risk
factors in our Annual Report on Form 10-K for the year ended
December 31, 2011, which we have filed with the Securities and
Exchange Commission.
Fisher Communications, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
(in thousands,
except per-share Three months ended Nine months ended
amounts) September 30, % September 30, %
2012 2011 Change 2012 2011 Change
-------- -------- ------ -------- -------- ------
Revenue $ 39,895 $ 39,700 0% $116,097 $117,602 (1%)
-------- -------- ------ -------- -------- ------
Operating expenses
Direct operating
costs 16,386 17,704 7% 48,974 52,595 7%
Selling, general
and
administrative
expenses 15,939 12,642 (26%) 45,574 40,809 (12%)
Amortization of
broadcast
rights 2,479 2,449 (1%) 7,372 8,324 11%
Depreciation and
amortization 1,736 2,697 36% 5,241 8,027 35%
Gain on sale of
real estate,
net - - n/a (164) (4,089) (96%)
Plaza fire
reimbursements,
net - (40) (100%) - (223) (100%)
-------- -------- ------ -------- -------- ------
Total operating
expenses 36,540 35,452 (3%) 106,997 105,443 (1%)
-------- -------- ------ -------- -------- ------
Income from
continuing
operations 3,355 4,248 (21%) 9,100 12,159 (25%)
Loss on
extinguishment of
senior notes, net - (298) (1,482) (1,356)
Other income, net 49 34 143 214
Interest expense (16) (1,572) (292) (5,697)
-------- -------- -------- --------
Income from
continuing
operations before
income taxes 3,388 2,412 7,469 5,320
Provision for
income taxes 1,188 893 2,851 1,978
-------- -------- -------- --------
Income from
continuing
operations, net
of income taxes 2,200 1,519 4,618 3,342
Loss from
discontinued
operations, net
of income taxes - (75) - (9)
-------- -------- -------- --------
Net income $ 2,200 $ 1,444 $ 4,618 $ 3,333
======== ======== ======== ========
Net income (loss)
per share:
From continuing
operations $ 0.25 $ 0.17 $ 0.52 $ 0.38
From
discontinued
operations - (0.01) - -
-------- -------- -------- --------
Net income per
share $ 0.25 $ 0.16 $ 0.52 $ 0.38
======== ======== ======== ========
Net income (loss)
per share
assuming
dilution:
From continuing
operations $ 0.25 $ 0.17 $ 0.52 $ 0.38
From
discontinued
operations - (0.01) - (0.01)
-------- -------- -------- --------
Net income per
share assuming
dilution $ 0.25 $ 0.16 $ 0.52 $ 0.37
======== ======== ======== ========
Weighted average
shares
outstanding 8,878 8,836 8,866 8,827
-------- -------- -------- --------
Weighted average
shares
outstanding
assuming dilution 8,958 8,900 8,949 8,898
-------- -------- -------- --------
Dividends declared
per share $ 10.00 $ - $ 10.00 $ -
======== ======== ======== ========
Fisher Communications, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
September 30, December 31,
(in thousands) 2012 2011
------------- -------------
ASSETS
Current assets
Cash and cash equivalents $ 31,316 $ 143,017
Short-term debt security investments 72,532 33,481
Receivables, net 28,240 32,402
Income taxes receivable - 117
Deferred income taxes, net 1,825 1,825
Prepaid expenses and other 1,972 3,062
Broadcast rights 9,219 6,789
------------- -------------
Total current assets 145,104 220,693
Restricted cash 3,623 3,594
Cash surrender value of life insurance and
annuity contracts 17,884 17,278
Goodwill, net 13,293 13,293
Intangible assets, net 40,131 40,307
Other assets 5,219 5,006
Deferred income taxes, net 3,303 3,367
Assets held for sale - 658
Property, plant and equipment, net 39,344 40,921
------------- -------------
Total assets $ 267,901 $ 345,117
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Current maturities of long-term debt $ - $ 61,834
Accounts payable 2,009 3,754
Accrued payroll and related benefits 4,558 4,660
Interest payable - 1,556
Broadcast rights payable 8,936 6,541
Income taxes payable 2,464 21,468
Current portion of accrued retirement benefits 1,302 1,302
Dividends payable 88,795 -
Other current liabilities 9,415 8,708
------------- -------------
Total current liabilities 117,479 109,823
Deferred income 8,633 10,036
Accrued retirement benefits 20,385 20,525
Other liabilities 2,943 2,688
------------- -------------
Total liabilities 149,440 143,072
------------- -------------
Total stockholders' equity 118,461 202,045
------------- -------------
Total liabilities and stockholders' equity $ 267,901 $ 345,117
============= =============
Fisher Communications, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flow
(Unaudited)
Nine months ended
September 30,
(in thousands) 2012 2011
----------- -----------
Operating activities
Net income $ 4,618 $ 3,333
Adjustments to reconcile net income to net cash
providedby (used in) operating activities
Depreciation and amortization 5,241 8,027
Deferred income taxes, net 64 31
Loss on extinguishment of senior notes, net 594 416
Loss in operations of equity investees 119 188
Loss on disposal of property, plant and
equipment, net 101 75
Gain on sale of radio station, net - (48)
Gain on sale of real estate, net (164) (4,089)
Amortization of deferred financing fees 19 235
Amortization of deferred gain on sale of
Fisher Plaza (569) -
Amortization of debt security investment
premium 78 -
Amortization of non-cash contract termination
fee (1,096) (1,096)
Amortization of broadcast rights 7,372 8,324
Payments for broadcast rights (7,421) (8,688)
Stock-based compensation 1,284 1,174
Change in operating assets and liabilities, net
Receivables 4,162 1,791
Prepaid expenses and other 1,091 791
Cash surrender value of life insurance and
annuity contracts (606) 1,819
Other assets 125 203
Accounts payable, accrued payroll and related
benefits and other current liabilities 2,872 (1,593)
Interest payable (1,556) (2,312)
Income taxes receivable and payable (18,887) 2,514
Accrued retirement benefits (43) 31
Other liabilities 675 (783)
----------- -----------
Net cash provided by (used in) operating
activities (1,927) 10,343
----------- -----------
Investing activities
Investment in equity investee (50) (88)
Purchase of debt security investments (82,733) -
Purchase of investment in a radio station (750) -
Purchase of option to acquire a radio station (615) -
Purchase of radio stations - (113)
Purchase of property, plant and equipment (7,565) (5,070)
Proceeds from sale of debt security investments 7,628 -
Proceeds from maturity of debt security
investments 35,967 -
Proceeds from sale of radio station - 48
Proceeds from sale of real estate 825 4,164
----------- -----------
Net cash used in investing activities (47,293) (1,059)
----------- -----------
Financing activities
Repurchase of senior notes (61,834) (34,606)
Repurchase of common stock (86) -
Shares settled on vesting of stock rights (441) (278)
Proceeds from exercise of stock options 25 75
Payments on capital lease obligations (145) (134)
----------- -----------
Net cash used in financing activities (62,481) (34,943)
----------- -----------
Net decrease in cash and cash equivalents (111,701) (25,659)
Cash and cash equivalents, beginning of period 143,017 52,945
----------- -----------
Cash and cash equivalents, end of period $ 31,316 $ 27,286
=========== ===========
Fisher Communications, Inc. and Subsidiaries
GAAP to Non-GAAP Reconciliations
(Unaudited, in thousands)
The following table provides a reconciliation of income (loss)
from operations (GAAP) to EBITDA (non-GAAP) and Adjusted EBITDA
(non-GAAP) in each of the periods presented:
Three months ended Nine months ended
September 30, September 30,
-------------------- --------------------
2012 2011 2012 2011
--------- --------- --------- ---------
Income from continuing
operations $ 3,355 $ 4,248 $ 9,100 $ 12,159
Adjustments:
Amortization of broadcast
rights 2,479 2,449 7,372 8,324
Payments for broadcast
rights (2,394) (2,631) (7,421) (8,688)
Depreciation and
amortization 1,736 2,697 5,241 8,027
Stock-based compensation 458 441 1,284 1,174
Loss on disposal of
property, plant and
equipment, net 81 23 101 75
Gain on sale of real estate,
net - - (164) (4,089)
Plaza fire reimbursements,
net - (40) - (223)
Proxy related costs - 15 79 1,639
Amortization of non-cash
benefit resulting from
change in national
advertising representation
firm (365) (365) (1,096) (1,096)
--------- --------- --------- ---------
EBITDA (Non-GAAP) $ 5,350 $ 6,837 $ 14,496 $ 17,302
========= ========= ========= =========
Fisher Plaza rent expense 1,409 - 3,933 -
Plaza EBITDA - (2,285) - (6,937)
--------- --------- --------- ---------
Adjusted EBITDA (Non-GAAP) $ 6,759 $ 4,552 $ 18,429 $ 10,365
========= ========= ========= =========
The following table provides a reconciliation of television
income (loss) from operations (GAAP) to television cash flow
(non-GAAP) in each of the periods presented:
Three months ended Nine months ended
September 30, September 30,
-------------------- --------------------
2012 2011 2012 2011
--------- --------- --------- ---------
Television segment income from
continuing operations $ 10,178 $ 6,783 $ 27,630 $ 18,213
Adjustments:
Amortization of broadcast
rights 2,479 2,449 7,372 8,324
Payments for broadcast
rights (2,394) (2,631) (7,421) (8,688)
Net trade and internet loss 262 185 773 474
--------- --------- --------- ---------
Television broadcast cash flow
(Non-GAAP) $ 10,525 $ 6,786 $ 28,354 $ 18,323
========= ========= ========= =========
Television broadcast cash flow
as a percentage of television
segment revenue 30.4% 22.2% 28.2% 20.2%
========= ========= ========= =========
Television segment revenue $ 34,663 $ 30,522 $ 100,600 $ 90,557
========= ========= ========= =========
The following table provides a reconciliation of radio income
(loss) from operations (GAAP) to radio cash flow (non-GAAP) in each
of the periods presented:
Three months ended Nine months ended
September 30, September 30,
-------------------- --------------------
2012 2011 2012 2011
--------- --------- --------- ---------
Radio segment income from
continuing operations $ 1,387 $ 1,476 $ 4,020 $ 3,358
Adjustments:
Net trade loss (11) 1 77 31
--------- --------- --------- ---------
Radio broadcast cash flow (Non-
GAAP) $ 1,376 $ 1,477 $ 4,097 $ 3,389
========= ========= ========= =========
Radio broadcast cash flow as a
percentage of radio segment
revenue 26.3% 27.6% 26.4% 21.3%
========= ========= ========= =========
Radio segment revenue $ 5,225 $ 5,344 $ 15,524 $ 15,876
========= ========= ========= =========
The following table provides television net revenue comparisons
in each of the periods presented:
Three months ended Nine months ended
September 30, % September 30, %
------------------- ------ ------------------- ------
2012 2011 Change 2012 2011 Change
--------- --------- ------ --------- --------- ------
Core advertising
(local and
national) $ 21,760 $ 22,775 (4%) $ 69,917 $ 69,578 0%
Political 3,648 947 285% 5,110 1,301 293%
Internet 1,220 1,408 (13%) 3,800 3,958 (4%)
Retransmission 6,271 3,420 83% 16,117 10,037 61%
Trade, barter and
other 1,764 1,972 (11%) 5,656 5,683 (0%)
--------- --------- ------ --------- --------- ------
Television segment
net revenue $ 34,663 $ 30,522 14% $ 100,600 $ 90,557 11%
========= ========= ====== ========= ========= ======
Television segment
net revenue,
excluding
political $ 31,015 $ 29,575 5% $ 95,490 $ 89,256 7%
The following table provides radio net revenue comparisons in
each of the periods presented:
Three months ended Nine months ended
September 30, % September 30, %
------------------- ------ ------------------- ------
2012 2011 Change 2012 2011 Change
--------- --------- ------ --------- --------- ------
Core advertising
(local and
national) $ 4,849 $ 5,059 (4%) $ 14,591 $ 14,951 (2%)
Political 122 22 455% 180 149 21%
Trade, barter and
other 254 263 (3%) 753 776 (3%)
--------- --------- ------ --------- --------- ------
Radio segment net
revenue $ 5,225 $ 5,344 (2%) $ 15,524 $ 15,876 (2%)
========= ========= ====== ========= ========= ======
Radio segment net
revenue,
excluding
political $ 5,103 $ 5,322 (4%) $ 15,344 $ 15,727 (2%)
Contacts: Sard Verbinnen & Co Ron Low or David Isaacs (415)
618-8750
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