BALTIMORE, March 2, 2020 /PRNewswire/ -- Sinclair
Broadcast Group, Inc. (Nasdaq: SBGI), the "Company" or "Sinclair,"
is providing additional guidance in response to investor inquiries
following the February 26, 2020
release of the Company's financial results for the three and twelve
months ended December 31, 2019.
The outlook below supersedes the outlook provided in the
February 26 release and provides
certain first quarter and full year estimates for the Sports
segment. In addition, the Company has provided additional
2019 quarterly segment financial disclosures, which may be accessed
at www.sbgi.net under "Investors/ Non GAAP Measures."
![SBG logo SBG logo](https://mma.prnewswire.com/media/455827/Sinclair_Broadcast_Group_Logo.jpg)
The Company uses certain non-GAAP financial measures,
specifically Adjusted EBITDA, in addition to GAAP financial
measures as supplemental financial data to assist management and
the public in their analysis and valuation of our company. Adjusted
EBITDA is not formulated in accordance with GAAP, is not meant to
replace GAAP financial measures and may differ from other
companies' uses or formulations. Further discussions and
reconciliations of Adjusted EBITDA to its most comparable GAAP
financial measure, net income, may be accessed at www.sbgi.net
under "Investors/ Non GAAP Measures." The Company does not
provide reconciliations on a forward-looking basis.
Outlook:
The Company currently expects to achieve the following results
for the three months ending March 31,
2020 and twelve months ending December 31, 2020. The
outlook includes the acquisition of the Fox RSNs (August 23, 2019), the 20% ownership investment in
the YES Network (August 29, 2019), an
increased investment in Stadium which is now consolidated
(December 2, 2019), the launch of the
Marquee RSN (February 22, 2020), and
the divestiture of the non-license assets in Harlingen, TX (January
27, 2020).
For the three
months ending March 31,
2020 ($ in millions)
|
Local News and
Marketing
Services
|
|
Sports
|
|
Corporate and
Other and
Elimination
|
|
Consolidated
|
Revenue
Highlights:
|
|
|
|
|
|
|
|
Core advertising
revenue
|
|
|
|
|
|
|
$391 to
401
|
Political
revenue
|
|
|
|
|
|
|
34 to 46
|
Advertising
revenue
|
$314 to
333
|
|
$74 to 77
|
|
$37
|
|
$425 to
447
|
Distribution
revenue
|
350 to 354
|
|
760 to 762
|
|
50
|
|
1,160 to
1,166
|
Other media
revenue
|
40
|
(a)
|
4
|
|
(24)
|
(a)
|
20
|
Media
revenues
|
704 to 727
|
|
838 to 843
|
|
63
|
|
1,605 to
1,633
|
Non-media
revenue
|
—
|
|
—
|
|
42
|
|
42
|
Total
revenues
|
$704 to
727
|
|
$838 to
843
|
|
$105
|
|
$1,647 to
$1,675
|
|
|
|
|
|
|
|
|
Expense
Highlights:
|
|
|
|
|
—
|
|
|
Media programming
& production expenses
and media selling, general and
administrative expenses
|
$466 to
472
|
|
$651 to
653
|
(a)
|
$52 to 54
|
(a)
|
$1,169 to
1,179
|
Sports rights
amortization included in
media production expenses
|
—
|
|
487
|
|
—
|
|
487
|
Non-media
expenses
|
—
|
|
—
|
|
37
|
|
37
|
Corporate
overhead
|
|
|
|
|
|
|
38
|
Stock-based
compensation and non-
recurring costs for transaction, legal,
litigation and regulatory fees included in
corporate and media expenses above
|
|
|
|
|
|
|
19
|
Depreciation,
intangible & programming
amortization
|
|
|
|
|
|
|
195
|
|
|
|
|
|
|
|
|
Other
Highlights:
|
|
|
|
|
|
|
|
Sports rights
payments
|
—
|
|
$644
|
|
—
|
|
$644
|
Program contract
payments
|
24
|
|
—
|
|
—
|
|
24
|
Interest expense
(net)(b)
|
|
|
|
|
|
|
162
|
Income tax
provision
|
|
|
|
|
|
|
Approximately 14%
effective tax rate
|
Net cash tax
payment
|
|
|
|
|
|
|
N.M.
|
Payments to
noncontrolling interest holders,
including preferred
dividend
|
|
|
|
|
|
|
27
|
Total capital
expenditures, including repack
|
|
|
|
|
|
|
49 to 54
|
Repack capital
expenditures
|
|
|
|
|
|
|
24
|
Adjusted
EBITDA(c)
|
|
|
$30 to 33
|
|
|
|
$241 to
259
|
|
(a) In the
outlook for the quarter ending March 31, 2020, the Local News and
Marketing Services and the Sports segments include $27 million of
revenue and selling, general, and administrative expenses,
respectively, for services provided by the Local News and Marketing
Services segment to the Sports segment. Such amounts are
eliminated in the Consolidated column.
|
(b) Interest expense
is net of deferred finance costs, original issue discount
amortization, other non-cash interest expense, and interest
income.
|
(c) "Adjusted EBITDA"
is defined as earnings before interest, tax, depreciation and
amortization, adjusted for non-recurring transaction, legal,
litigation and regulatory costs, as well as certain non-cash items
such as stock-based compensation expense.
|
For the twelve
months ending
December 31, 2020 ($ in millions)
|
Local News and
Marketing
Services
|
|
Sports
|
|
Corporate and
Other and
Elimination
|
|
Consolidated
|
|
Revenue
Highlights:
|
|
|
|
|
|
|
|
|
Media
revenues
|
Not
provided
|
(a)
|
$3,515 to
3,555
|
|
Not
provided
|
(a)
|
Not
provided
|
(a)
|
|
|
|
|
|
|
|
|
|
Expense
Highlights:
|
|
|
|
|
|
|
|
|
Media programming
& production
expenses and media selling, general and
administrative expenses
|
$1,880 to
1,910
|
|
$2,732 to
2,737
|
(b)
|
$228 to
233
|
(b)
|
$4,840 to
4,880
|
|
Sports rights
amortization included
in media production expenses
|
—
|
|
2,054
|
|
—
|
|
2,054
|
|
Non-media
expenses
|
—
|
|
—
|
|
110
|
|
110
|
|
Corporate
overhead
|
|
|
|
|
|
|
131
|
|
Stock-based
compensation and non-
recurring costs for transaction, legal,
litigation and regulatory fees included in
corporate and media
expenses above
|
|
|
|
|
|
|
63
|
|
Depreciation,
intangible & programming
amortization
|
|
|
|
|
|
|
780
|
|
|
|
|
|
|
|
|
|
|
Other
Highlights: (c)
|
|
|
|
|
|
|
|
|
Sports rights
payments
|
—
|
|
1,900
|
|
—
|
|
1,900
|
|
Program contract
payments
|
90
|
|
—
|
|
—
|
|
90
|
|
Interest expense
(net)(d)
|
|
|
|
|
|
|
643
|
|
Income tax
provision
|
|
|
|
|
|
|
Approximately 12%
effective tax rate
|
|
Net cash tax
refund
|
|
|
|
|
|
|
N.M.
|
|
Payments to
noncontrolling interest
holders, including preferred dividend
|
|
|
|
|
|
|
114
|
|
Total capital
expenditures, including
repack
|
|
|
|
|
|
|
220 to 240
|
|
Repack capital
expenditures
|
|
|
|
|
|
|
90
|
|
Adjusted
EBITDA(e)
|
Not
provided
|
(a)
|
$939 to
974
|
|
Not
provided
|
(a)
|
Not
provided
|
(a)
|
|
(a) Consistent with
past practices, the Company does not provide a full year outlook
for revenues due to the limited visibility on a meaningful amount
of the media revenues.
|
(b) The February 26,
2020 press release inadvertently excluded $107 million of selling,
general, and administrative expenses for services provided by the
Local News and Marketing Services segment to the Sports segment and
did not include its elimination in the Corporate and Other and
Elimination column. In the outlook provided above, for
the year ending December 31, 2020, the Sports segment correctly
includes $107 million of selling, general, and administrative
expenses for services provided by the Local News and Marketing
Services segment to the Sports segment. The offset would be
included in the Local News and Marketing Services segment
revenues. Such amounts are eliminated in the Consolidated
column. There is no impact on the Consolidated
outlook.
|
(c) In addition to
the Other Highlights in the table above, the Company expects 2020
growth in net distribution, which is defined as distribution
revenue less reverse retrans payments to the networks, for the
combined Local News and Marketing Services segment and Corporate
and Other segment to be in the mid to high single digit
percentages.
|
(d) Interest expense
is net of deferred finance costs, original issue discount
amortization, other non-cash interest expense, and interest
income.
|
(e) "Adjusted EBITDA"
is defined as earnings before interest, tax, depreciation and
amortization, adjusted for non-recurring transaction, legal,
litigation and regulatory costs, as well as certain non-cash items
such as stock-based compensation expense.
|
About Sinclair:
Sinclair is a diversified media company and leading provider of
local sports and news. The Company owns and/or operates 23 regional
sports network brands; owns, operates and/or provides services to
191 television stations in 89 markets; is a leading local news
provider in the country; owns multiple national networks; and has
TV stations affiliated with all the major broadcast networks.
Sinclair's content is delivered via multiple-platforms, including
over-the-air, multi-channel video program distributors, and digital
platforms. The Company regularly uses its website as a key source
of Company information which can be accessed at
www.sbgi.net.
Forward-Looking Statements:
The matters discussed in this news release, particularly those
in the section labeled "Outlook," include forward-looking
statements regarding, among other things, future operating
results. When used in this news release, the words "outlook,"
"intends to," "believes," "anticipates," "expects," "achieves,"
"estimates," and similar expressions are intended to identify
forward-looking statements. Such statements are subject to a
number of risks and uncertainties. Actual results in the
future could differ materially and adversely from those described
in the forward-looking statements as a result of various important
factors, including and in addition to the assumptions set forth
therein, but not limited to, the impact of changes in national and
regional economies, our ability to generate cash to service our
substantial indebtedness, the completion of the FCC spectrum
repack, successful execution of outsourcing agreements, pricing and
demand fluctuations in local and national advertising, volatility
in programming costs, the market acceptance of new programming, the
successful execution of retransmission consent agreements, the
successful execution of network and MVPD affiliation agreements,
the successful execution of media rights agreements with
professional sports teams, the impact of OTT and other emerging
technologies and their potential impact on cord-cutting, the impact
of MVPDs, vMVPDs, and OTT distributors offering "skinny"
programming bundles that may not include all programming of our
networks, our ability to identify and consummate acquisitions and
investments and to achieve anticipated returns on those investments
once consummated, the impact of pending and future litigation
claims against the Company, the impact of FCC and other regulatory
proceedings against the Company, uncertainties associated with
potential changes in the regulatory environment affecting our
business and growth strategy, and any risk factors set forth in the
Company's recent reports on Form 10-Q and/or Form 10-K, as filed
with the Securities and Exchange Commission. There can be no
assurances that the assumptions and other factors referred to in
this release will occur. The Company undertakes no obligation
to publicly release the result of any revisions to these
forward-looking statements except as required by law.
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SOURCE Sinclair Broadcast Group, Inc.