ATLANTA, March 1, 2011 /PRNewswire/ -- Gray Television,
Inc. ("Gray," "we," "us" or "our") (NYSE: GTN) today announced
results of operations for the three-month period (the "fourth
quarter") and year ended December 31,
2010 ("2010") as compared to the three-month period and year
ended December 31, 2009.
Gray Earns Record Revenue and Broadcast Cash Flow for the
Year Ended December 31, 2010:
For the year ended December 31,
2010, we recorded revenue of $346.1
million and broadcast cash flow of $148.9 million. These are record amounts for
Gray. Our previous records were set in 2006 when we recorded
revenue of $332.1 million and
broadcast cash flow of 143.4 million for the year. These
record amounts were driven in part by a record $57.6 million of political advertising revenue in
2010. Broadcast cash flow is a non-GAAP term and is reconciled to
net income later in this press release.
As previously reported, we used cash from operations to reduce
our long-term debt and long-term accrued facility fee balance by a
total of $50.2 million during the
year ended December 31, 2010.
Results Exceed Estimates for the Fourth Quarter of
2010:
For the three-month period ended December
31, 2010, our operating results exceeded our initial
estimates, which were publicly disclosed on November 8, 2010. Our total revenue exceeded our
initial estimates, our actual broadcast expense was near the lower
end of our initially estimated range and our actual corporate
expense was below our initially estimated range. Our fourth quarter
2010 political advertising revenue of $33.1
million was a single quarter record for us. We also recorded
higher than expected local, national and internet advertising
revenue. Our consulting revenue for the fourth quarter of
2010 totaled $5.8 million and
exceeded our initial estimates. Consulting revenue consisted of
$0.6 million of base consulting
revenue and $5.3 million of incentive
consulting revenue.
Highlights:
|
Three Months
Ended December 31,
|
|
Years Ended
December 31,
|
|
|
2010
|
|
2009
|
|
%
Change
|
|
2010
|
|
2009
|
|
%
Change
|
|
|
(in
thousands except for percentages)
|
|
Revenues (less agency
commissions)
|
$ 114,595
|
|
$ 77,517
|
|
48 %
|
|
$ 346,058
|
|
$ 270,374
|
|
28 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
Broadcast
|
$ 52,898
|
|
$ 50,589
|
|
5 %
|
|
$ 196,353
|
|
$ 187,583
|
|
5 %
|
|
Corporate and
administrative
|
$ 3,417
|
|
$ 3,222
|
|
6 %
|
|
$ 13,545
|
|
$ 14,168
|
|
(4)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Excludes depreciation,
amortization and gain on disposal of assets.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comments on Results of Operations for the Three-Month Period
Ended December 31,
2010:
Revenue.
Total revenue increased $37.1
million, or 48%, to $114.6
million for the three-month period ended December 31, 2010 compared to the three-month
period ended December 31, 2009
reflecting increases in political, local, and internet advertising
revenue, retransmission consent revenue and consulting revenue
while national advertising revenue and production and other revenue
decreased. Local and internet advertising revenue increased due to
increased spending by advertisers in an improving economic
environment. National advertising revenue decreased due to large
purchases of advertising time by political advertisers, which
reduced advertising time available for other customers. Political
advertising revenue increased due to increased advertising from
political candidates and special interest groups in advance of
elections in November 2010.
Retransmission revenue increased due to the improved terms of our
retransmission contracts compared to those in effect during the
three-month period ended December 31,
2009. We continued to earn consulting revenue from our
agreement with Young Broadcasting, Inc ("Young"). Our consulting
revenue from this agreement includes a fixed base component and an
incentive component which is based upon Young's actual results. We
earned base consulting revenue of $0.6
million for the three-month periods ended December 31, 2010 and 2009, respectively.
Pursuant to the terms of this agreement, we recorded $5.3 million of incentive consulting revenue for
the three-month period ended December 31,
2010. We were not eligible for an incentive consulting fee
in the three-month period ended December 31,
2009. This agreement became effective on August 10, 2009 and expires on December 31, 2012.
The principal components of our revenue were as follows:
- Local advertising revenue increased $2.4
million, or 5%, to $49.5
million.
- National advertising revenue decreased $0.2 million, or 2%, to $15.6 million.
- Internet advertising revenue increased $0.7 million, or 21%, to $3.9 million.
- Political advertising revenue increased $28.2 million, or 569%, to $33.1 million.
- Retransmission consent revenue increased $1.1 million, or 29%, to $4.8 million.
- Production and other revenue decreased $0.3 million, or 14%, to $1.6 million.
- Consulting revenue from our agreement with Young increased
$5.3 million, or 963%, to
$5.8 million.
Our five largest advertising revenue categories by customer
type, excluding political advertising, demonstrated the following
changes during the three-month period ended December 31, 2010 compared to the three-month
period ended December 31, 2009:
automotive increased 3%; restaurants decreased 11%; medical
increased 2%; communications increased 16% and department stores
increased 20%.
Operating expenses.
Broadcast expenses (before depreciation, amortization and gain
on disposal of assets) increased $2.3
million, or 5%, to $52.9
million. The increase was due primarily to an increase in
payroll expense of $2.0 million and
national sales representation expense of $1.5 million, partially offset by a decrease in
employee benefit expense of $1.5
million. Payroll expense increased primarily due to
increases in sales and certain other incentive compensation due to
the increase in advertising revenue discussed above. National
sales representation fees earned by third parties also increased
due to increased advertising revenue. National sales representation
expense is equal to a certain percentage of our national sales
revenue (including certain political advertising revenue) and
increases as this revenue increases. We continue to monitor
our total number of employees in order to reduce costs when
possible. As of December 31, 2010 and
2009, we employed 2,147 and 2,184 employees, respectively, in our
broadcast operations. Since December
31, 2007, we have decreased the total number of employees in
our broadcast operations by 278 persons, a decrease of 11.5%.
Corporate and administrative expenses (before depreciation,
amortization and gain on disposal of assets) increased $0.2 million, or 6%, to $3.4 million. The increase was due primarily to
an increase of $0.3 million in
payroll expense partially offset by a decrease in consulting
expense of $0.1 million. The increase
in payroll expense was due primarily to an increase in bonus
compensation of $0.6 million for
certain executive officers, resulting from the increase in revenues
discussed above, partially offset by a decrease of $0.3 million in non-cash stock-based compensation
expense. We recorded non-cash stock-based compensation expense
during the three-month periods ended December 31, 2010 and 2009 of $0.1 million and $0.3
million, respectively. Non-cash stock-based compensation
expense decreased due to outstanding stock options becoming fully
vested. Consulting expense decreased due to the expiration, on
December 31, 2009, of a consulting
agreement with our former Chairman.
Comments on Results of Operations for the Year Ended
December 31, 2010:
Revenue.
Total revenue increased $75.7
million, or 28%, to $346.1
million for the year ended December
31, 2010 compared to the year ended December 31, 2009, reflecting increases in
political, local, national and internet advertising revenue,
retransmission consent revenue, production and other revenue and
consulting revenue. Local, national and internet advertising
revenue increased due to increased spending by advertisers in an
improving economic environment. Political advertising revenues
increased due to increased advertising from political candidates
and special interest groups during the "on year" of the two-year
political advertising cycle. Net advertising revenue associated
with the broadcast of the 2010 Super Bowl on our seventeen
CBS-affiliated stations approximated $0.9
million which was an increase from our approximate
$0.8 million of Super Bowl revenues
earned in 2009 on our ten NBC-affiliated stations. In addition,
results in the year ended December 31,
2010 benefited from approximately $2.8 million of net revenues earned from the
broadcast of the 2010 Winter Olympic Games on our NBC-affiliated
stations. There was no corresponding broadcast of Olympic Games
during the year ended December 31,
2009. Retransmission consent revenue increased due to the
improved terms of our retransmission contracts compared to those in
effect during the year ended December 31,
2009. Production and other revenue increased primarily due
to increased revenue from producing news for a station not owned by
Gray. We continued to earn consulting revenue from our agreement
with Young. Our consulting revenue from this agreement includes a
fixed base component and an incentive component which is based upon
Young's actual results. We earned base consulting revenue of
$2.2 million and $0.9 million for the years ended December 31, 2010 and 2009, respectively.
The increase was due to the agreement being effective for
only a portion of the year ended December
31, 2009. Pursuant to the terms of this agreement, we
recorded $5.3 million of incentive
consulting revenue for the year ended December 31, 2010. We were not eligible for an
incentive consulting fee in the year ended December 31, 2009.
The principal components of our revenue were as follows:
- Local advertising revenue increased $12.4 million, or 7%, to $183.2 million.
- National advertising revenue increased $3.8 million, or 7%, to $57.6 million.
- Internet advertising revenue increased $2.0 million, or 17%, to $13.4 million.
- Political advertising revenue increased $47.6 million, or 477%, to $57.6 million.
- Retransmission consent revenue increased $3.1 million, or 20%, to $18.8 million.
- Production and other revenue increased $0.3 million, or 5%, to $7.4 million.
- Consulting revenue from our agreement with Young increased
$6.6 million, or 769%, to
$7.5 million.
Our five largest advertising revenue categories by customer
type, excluding political advertising, demonstrated the following
changes during the year ended December 31,
2010 compared to the year ended December 31, 2009: automotive increased 27%;
restaurants decreased 9%; medical increased 12%; communications
decreased 4% and furniture and appliances increased less than
1%.
Operating expenses.
Broadcast expenses (before depreciation, amortization and gain
on disposal of assets) increased $8.8
million, or 5%, to $196.4
million. This increase was primarily due to increases in
payroll expense of $7.1 million and
national sales representation expense of $2.9 million, partially offset by decreases in
employee benefit expense of $1.6
million. Payroll expense increased primarily due to
increases in sales and certain other incentive compensation due to
the increase in advertising revenue discussed above. National sales
representation fees earned by third parties also increased due to
increased advertising revenue. National sales representation
expense is equal to a certain percentage of our national sales
revenue (including certain political advertising revenue) and
increases as this revenue increases. Employee benefit expense
decreased due to a decrease in health care expense of $1.1 million and pension expense of $0.3 million. Health care expense decreased
primarily due to fewer claims incurred and pension expense
decreased primarily due to an increase in our pension expense
discount rate.
Corporate and administrative expenses (before depreciation,
amortization and gain on disposal of assets) decreased $0.6 million, or 4%, to $13.5 million. The decrease was due primarily to
a decrease in relocation expense of $0.6
million, consulting expense of $0.6
million and legal expense of $0.6
million, partially offset by an increase in payroll expense
of $1.3 million. Relocation expense
decreased due to the relocation of certain employees in the year
ended December 31, 2009, while no
similar relocations took place in the year ended December 31, 2010. Consulting expense decreased
due to the expiration, on December 31,
2009, of a consulting agreement with our former Chairman.
Legal expense decreased primarily due to a decrease in the
number of retransmission consent revenue contracts being negotiated
in the current period compared to the year ended December 31, 2009. The increase in payroll
expense was due primarily to an increase in bonus compensation
expense, partially offset by a decrease in non-cash stock-based
compensation. Bonus compensation expense increased due to the
payment of $1.05 million in bonuses
to certain executive officers related to the completed refinancing
in the year ended December 31, 2010.
In addition, bonus compensation expense increased an additional
$1.2 million reflecting incentive
compensation in 2010 resulting from the increase in revenues
discussed above. Non-cash stock-based compensation expense
decreased $1.0 million due to
outstanding stock options becoming fully vested. We recorded
non-cash stock-based compensation expense during the years ended
December 31, 2010 and 2009 of
$0.3 million and $1.4 million, respectively.
Internet Initiatives:
We continue to expand our internet initiatives in each of our
markets. Our focus remains on expanding local content to
attract additional traffic to our websites. Our website page view
data for the three-month period and year ended December 31, 2010 compared to the three-month
period and year ended December 31,
2009 is as follows:
Gray
Websites - Aggregate Page Views
|
|
|
|
|
|
|
|
|
|
Three Months
Ended December 31,
|
|
|
2010
|
|
2009
|
|
%
Change
|
|
|
(in
millions, except percentages)
|
|
|
|
|
|
|
|
|
Advertising impressions
generated
|
735.1
|
|
504.0
|
|
46 %
|
|
Total page views (including
mobile page views)
|
223.7
|
|
205.0
|
|
9 %
|
|
|
|
|
|
|
|
|
|
Years Ended
December 31,
|
|
|
2010
|
|
2009
|
|
%
Change
|
|
|
(in
millions, except percentages)
|
|
|
|
|
|
|
|
|
Advertising impressions
generated
|
2,639.9
|
|
2,100.0
|
|
26 %
|
|
Total page views (including
mobile page views)
|
847.2
|
|
762.0
|
|
11 %
|
|
|
|
|
|
|
|
We attribute the increase in our website traffic to increased
posting of local content and public awareness of our websites
resulting from our on-air promotion of our websites.
Our aggregate internet revenues are derived from two sources.
The first source is advertising or sponsorship opportunities
directly on our websites. We call this "direct internet
revenue." The other revenue source is television advertising
time purchased by our clients to directly promote their involvement
in our websites. We refer to this internet revenue source as
"internet-related commercial time sales."
Other Financial Data:
|
December 31,
2010
|
|
December 31,
2009
|
|
|
(in
thousands)
|
|
|
|
|
|
|
Cash
|
$
5,431
|
|
$
16,000
|
|
Long-term debt, including
current portion
|
$
826,704
|
|
$
791,809
|
|
Long-term accrued facility
fee
|
$
-
|
|
$
18,307
|
|
Preferred stock (1)
|
$
37,181
|
|
$
93,386
|
|
Borrowing availability under our
senior credit facility
|
$
40,000
|
|
$
31,681
|
|
|
|
|
|
|
|
Years Ended
December 31,
|
|
|
2010
|
|
2009
|
|
|
(in
thousands)
|
|
|
|
|
|
|
Net cash provided by operating
activities
|
$
38,126
|
|
$
18,903
|
|
Net cash used in investing
activities
|
(19,506)
|
|
(17,531)
|
|
Net cash used in financing
activities
|
(29,189)
|
|
(16,021)
|
|
Net decrease in cash
|
$
(10,569)
|
|
$
(14,649)
|
|
|
|
|
|
|
Certain covenant ratios as
defined under
|
|
|
|
|
our senior credit facility
(2):
|
|
|
|
|
First lien leverage ratio
- actual
|
4.46
|
|
-
|
|
First lien leverage ratio
- maximum allowed
|
7.00
|
|
-
|
|
Fixed charge coverage
ratio - actual
|
1.27
|
|
-
|
|
Fixed charge coverage
ratio - minimum allowed
|
0.90
|
|
-
|
|
|
|
|
|
|
(1) As of December 31, 2010,
preferred stock does not include unaccreted original issuance costs
and accrued preferred stock dividends of $2.1
million and $14.1
million, respectively. As of
December 31, 2009, preferred stock does not include unaccreted
original issuance costs and accrued preferred stock dividends
of $6.6 million
and $18.9 million,
respectively.
|
|
(2) Gray was not required to
comply with these ratios prior to June 30, 2010.
|
|
|
|
|
|
Detailed Table of Operating Results:
Gray
Television, Inc.
|
|
Selected
Operating Data (Unaudited)
|
|
(in
thousands except for per share data and percentages)
|
|
|
|
|
|
Three Months
Ended
|
|
|
December
31,
|
|
|
|
|
|
|
%
|
|
|
2010
|
|
2009
|
|
Change
|
|
|
|
|
|
|
|
|
Revenues (less agency
commissions)
|
$ 114,595
|
|
$ 77,517
|
|
48 %
|
|
Operating expenses before
depreciation,
|
|
|
|
|
|
|
amortization and gain on
disposal of assets, net:
|
|
|
|
|
|
|
Broadcast
|
52,898
|
|
50,589
|
|
5 %
|
|
Corporate and
administrative
|
3,417
|
|
3,222
|
|
6 %
|
|
Depreciation
|
7,229
|
|
8,057
|
|
(10)%
|
|
Amortization of intangible
assets
|
117
|
|
137
|
|
(15)%
|
|
Gain on disposals of assets,
net
|
(1,300)
|
|
(3,173)
|
|
(59)%
|
|
|
62,361
|
|
58,832
|
|
6 %
|
|
Operating income
|
52,234
|
|
18,685
|
|
180 %
|
|
Other income
(expense):
|
|
|
|
|
|
|
Miscellaneous income,
net
|
1
|
|
28
|
|
(96)%
|
|
Interest
expense
|
(16,332)
|
|
(19,568)
|
|
(17)%
|
|
Income (loss) before income
tax
|
35,903
|
|
(855)
|
|
|
|
Income tax expense
|
14,039
|
|
1,104
|
|
|
|
Net income (loss)
|
21,864
|
|
(1,959)
|
|
|
|
Preferred stock dividends
(includes accretion of
|
|
|
|
|
|
|
issuance cost of $118 and
$299, respectively)
|
1,789
|
|
4,550
|
|
(61)%
|
|
Net income (loss) available to
common stockholders
|
$ 20,075
|
|
$ (6,509)
|
|
|
|
|
|
|
|
|
|
|
Basic per share
information:
|
|
|
|
|
|
|
Net income (loss)
available to common stockholders
|
$
0.35
|
|
$ (0.13)
|
|
|
|
Weighted-average shares
outstanding
|
57,075
|
|
48,526
|
|
18 %
|
|
|
|
|
|
|
|
|
Diluted per share
information:
|
|
|
|
|
|
|
Net income (loss)
available to common stockholders
|
$
0.35
|
|
$ (0.13)
|
|
|
|
Weighted-average shares
outstanding
|
57,078
|
|
48,526
|
|
18 %
|
|
|
|
|
|
|
|
|
Political advertising revenue
(less agency commissions)
|
$ 33,139
|
|
$ 4,954
|
|
569 %
|
|
|
|
|
|
|
|
Gray
Television, Inc.
|
|
Selected
Operating Data (Unaudited)
|
|
(in
thousands except for per share data and percentages)
|
|
|
|
|
|
Years
Ended
|
|
|
December
31,
|
|
|
|
|
|
|
%
|
|
|
2010
|
|
2009
|
|
Change
|
|
|
|
|
|
|
|
|
Revenues (less agency
commissions)
|
$ 346,058
|
|
$ 270,374
|
|
28 %
|
|
Operating expenses before
depreciation,
|
|
|
|
|
|
|
amortization and gain on
disposal of assets, net:
|
|
|
|
|
|
|
Broadcast
|
196,353
|
|
187,583
|
|
5 %
|
|
Corporate and
administrative
|
13,545
|
|
14,168
|
|
(4)%
|
|
Depreciation
|
30,630
|
|
32,595
|
|
(6)%
|
|
Amortization of intangible
assets
|
479
|
|
577
|
|
(17)%
|
|
Gain on disposals of assets,
net
|
(1,909)
|
|
(7,628)
|
|
(75)%
|
|
|
239,098
|
|
227,295
|
|
5 %
|
|
Operating income
|
106,960
|
|
43,079
|
|
148 %
|
|
Other income
(expense):
|
|
|
|
|
|
|
Miscellaneous income,
net
|
44
|
|
54
|
|
(19)%
|
|
Interest
expense
|
(70,045)
|
|
(69,088)
|
|
1 %
|
|
Loss on early
extinguishment of debt
|
(349)
|
|
(8,352)
|
|
|
|
Income (loss) before income tax
expense (benefit)
|
36,610
|
|
(34,307)
|
|
|
|
Income tax expense
(benefit)
|
13,447
|
|
(11,260)
|
|
|
|
Net income (loss)
|
23,163
|
|
(23,047)
|
|
|
|
Preferred stock dividends
(includes accretion of
|
|
|
|
|
|
|
issuance cost of $4,489
and $1,202, respectively)
|
14,582
|
|
17,119
|
|
(15)%
|
|
Net income (loss) available to
common stockholders
|
$ 8,581
|
|
$ (40,166)
|
|
|
|
|
|
|
|
|
|
|
Basic per share
information:
|
|
|
|
|
|
|
Net income (loss)
available to common stockholders
|
$
0.16
|
|
$
(0.83)
|
|
|
|
Weighted-average shares
outstanding
|
54,322
|
|
48,510
|
|
12 %
|
|
|
|
|
|
|
|
|
Diluted per share
information:
|
|
|
|
|
|
|
Net income (loss)
available to common stockholders
|
$
0.16
|
|
$
(0.83)
|
|
|
|
Weighted-average shares
outstanding
|
54,324
|
|
48,510
|
|
12 %
|
|
|
|
|
|
|
|
|
Political advertising revenue
(less agency commissions)
|
$ 57,552
|
|
$ 9,976
|
|
477 %
|
|
|
|
|
|
|
|
Guidance for the First Quarter of 2011:
We currently anticipate that our results for the three-month
period ending March 31, 2011 (the
"first quarter of 2011") will approximate the ranges presented in
the table below.
|
2011
|
|
%
Change
|
|
2011
|
|
%
Change
|
|
|
|
|
Guidance
|
|
From
|
|
Guidance
|
|
From
|
|
|
|
|
Low
|
|
Actual
|
|
High
|
|
Actual
|
|
Actual
|
|
Selected operating
data:
|
Range
|
|
2010
|
|
Range
|
|
2010
|
|
2010
|
|
|
(dollars in
thousands)
|
|
OPERATING REVENUE:
|
|
|
|
|
|
|
|
|
|
|
Revenue (less agency
commissions)
|
$ 67,000
|
|
(5)%
|
|
$ 68,000
|
|
(4)%
|
|
$ 70,482
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES
|
|
|
|
|
|
|
|
|
|
|
(before depreciation,
amortization and
|
|
|
|
|
|
|
|
|
|
|
gain on disposal of
assets):
|
|
|
|
|
|
|
|
|
|
|
Broadcast
|
$ 49,500
|
|
4 %
|
|
$ 50,000
|
|
5 %
|
|
$ 47,567
|
|
Corporate and
administrative
|
$ 3,400
|
|
16 %
|
|
$ 3,600
|
|
23 %
|
|
$ 2,922
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER SELECTED DATA:
|
|
|
|
|
|
|
|
|
|
|
Political advertising
revenues
|
|
|
|
|
|
|
|
|
|
|
(less agency
commissions)
|
$
400
|
|
(86)%
|
|
$
500
|
|
(82)%
|
|
$ 2,783
|
|
|
|
|
|
|
|
|
|
|
|
Comments on Guidance:
Revenue.
Our current first quarter 2011 revenue estimates in comparison
to actual revenue in the three-month period ended March 31, 2010 (the "first quarter of 2010") take
into account the following non-recurring revenue in 2010:
$2.3 million of political
advertising revenue;
$2.8 million of advertising
revenue from the broadcast of the 2010 Olympics; and
$0.9 million of advertising
revenue from the broadcast of the 2010 Super Bowl on 17 CBS
stations in comparison to $0.2
million of advertising revenue from the broadcast of the
2011 Super Bowl on 1 Fox primary channel and 4 Fox digital
secondary channels.
Based on our current forecast, we believe that our non-political
advertising revenue for the first quarter of 2011, including our
local, national and internet revenue, will approximate our results
from the first quarter of 2010 on an aggregate basis.
We currently believe our first quarter of 2011 local revenue,
excluding political revenue, will approximate the results from the
first quarter of 2010.
We currently believe our first quarter of 2011 national revenue,
excluding political revenue, will decrease from the first quarter
of 2010 by approximately 8% reflecting in part the impact of the
non-recurring Olympic, and a lower level of Super Bowl revenue
discussed above.
We anticipate our first quarter of 2011 internet revenue will
increase from the first quarter of 2010 by approximately 36%.
We anticipate our first quarter of 2011 political advertising
revenue will approximate $500,000 due
to a lack of political races in the first quarter of 2011.
We anticipate that our first quarter of 2011 retransmission
consent revenue will increase approximately $0.3 million to $5.0 million.
We estimate our base consulting revenue will remain stable at
$0.6 million for the first quarter of
2011.
Broadcast Operating Expense (before depreciation,
amortization and gain/loss on disposal of assets).
The anticipated increase in broadcast operating expense for the
first quarter of 2011 compared to the first quarter of 2010 is due
primarily to increases in employee compensation and benefits. For
the full year of 2011, we currently anticipate that total broadcast
operating expense will range between $194.5
million and $196.0 million in comparison to an actual amount
of $196.4 million for the full year
of 2010.
Corporate and Administrative Expense (before depreciation,
amortization and gain/loss on disposal of assets).
The anticipated increase in corporate expense for the first
quarter of 2011 as compared to the first quarter of 2010 is due
primarily to increases in compensation and market research expense.
For the full year of 2011, we currently anticipate that total
corporate expense will range between $13.3
million and $13.6 million in comparison to an actual amount
of $13.6 million for the full year of
2010.
Net Revenue By Category:
The table below presents our net revenue by type for the
three-month period and year ended December
31, 2010 and 2009, respectively (dollars in thousands):
|
|
|
|
|
|
|
|
|
|
Three Months
Ended December 31,
|
|
|
2010
|
|
2009
|
|
|
|
|
Percent
|
|
|
|
Percent
|
|
|
Amount
|
|
of
Total
|
|
Amount
|
|
of
Total
|
|
Broadcasting net
revenues:
|
|
|
|
|
|
|
|
|
Local
|
$
49,502
|
|
43.2%
|
|
$
47,120
|
|
60.8%
|
|
National
|
15,613
|
|
13.6%
|
|
15,861
|
|
20.5%
|
|
Internet (1)
|
3,876
|
|
3.4%
|
|
3,213
|
|
4.1%
|
|
Political
|
33,139
|
|
28.9%
|
|
4,954
|
|
6.4%
|
|
Retransmission
consent
|
4,807
|
|
4.2%
|
|
3,734
|
|
4.8%
|
|
Production and
other
|
1,638
|
|
1.4%
|
|
1,914
|
|
2.5%
|
|
Network
compensation
|
173
|
|
0.2%
|
|
171
|
|
0.2%
|
|
Consulting
revenue
|
5,847
|
|
5.1%
|
|
550
|
|
0.7%
|
|
Total
|
$
114,595
|
|
100.0%
|
|
$
77,517
|
|
100.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended
December 31,
|
|
|
2010
|
|
2009
|
|
|
|
|
Percent
|
|
|
|
Percent
|
|
|
Amount
|
|
of
Total
|
|
Amount
|
|
of
Total
|
|
Broadcasting net
revenues:
|
|
|
|
|
|
|
|
|
Local
|
$ 183,177
|
|
52.9%
|
|
$ 170,813
|
|
63.2%
|
|
National
|
57,649
|
|
16.7%
|
|
53,892
|
|
19.9%
|
|
Internet (1)
|
13,401
|
|
3.9%
|
|
11,413
|
|
4.2%
|
|
Political
|
57,552
|
|
16.6%
|
|
9,976
|
|
3.7%
|
|
Retransmission
consent
|
18,774
|
|
5.4%
|
|
15,645
|
|
5.8%
|
|
Production and
other
|
7,446
|
|
2.2%
|
|
7,119
|
|
2.6%
|
|
Network
compensation
|
562
|
|
0.2%
|
|
653
|
|
0.2%
|
|
Consulting
revenue
|
7,497
|
|
2.1%
|
|
863
|
|
0.4%
|
|
Total
|
$ 346,058
|
|
100.0%
|
|
$ 270,374
|
|
100.0%
|
|
|
|
|
|
|
|
|
|
|
(1) Internet
revenues are derived from two sources: (i) direct internet revenue
and (ii) internet related commercial time sales.
|
|
|
|
|
|
|
|
|
|
Conference Call Information:
We will host a conference call to discuss our fourth quarter and
year ended December 31, 2010
operating results on March 1, 2011.
The call will begin at 11:00 AM
Eastern Time. The live dial-in number is 1(877)
741-4244 and the confirmation code is 7873176. The call will
be webcast live and available for replay at www.gray.tv. The
taped replay of the conference call will be available at 1 (888)
203-1112, Confirmation Code: 7873176 until March 31, 2011.
Non-GAAP Terms:
This press release includes the non-GAAP financial measures of
Broadcast Cash Flow and Broadcast Cash Flow Less Cash Corporate
Expenses. These non-GAAP amounts are used by us to
approximate the amount used to calculate a key financial
performance covenant contained in our senior credit facility.
Broadcast Cash Flow is defined as operating income plus
corporate expense, depreciation and amortization (including
amortization of program broadcast rights), impairment, non-cash
compensation and (gain) loss on disposal of assets and cash
payments received or receivable under network affiliation
agreements, less payments for program broadcast obligations and
less network compensation revenue, net of income taxes.
Corporate expenses (excluding depreciation, amortization and
non-cash stock-based compensation) are deducted from Broadcast Cash
Flow to calculate "Broadcast Cash Flow Less Cash Corporate
Expenses." These non-GAAP terms are not defined in GAAP and
our definitions may differ from, and therefore not be comparable
to, similarly titled measures used by other companies, thereby
limiting their usefulness. Such terms are used by management in
addition to and in conjunction with results presented in accordance
with GAAP and should be considered as supplements to, and not as
substitutes for, net income (loss) and cash flows reported in
accordance with GAAP.
Reconciliations:
Reconciliation of net income (loss) to the non-GAAP terms
(dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
December
31,
|
|
|
|
|
2010
|
|
2009
|
|
%
Change
|
|
Net income (loss)
|
$ 21,864
|
|
$ (1,959)
|
|
|
|
Adjustments to reconcile
to Broadcast Cash Flow Less
|
|
|
|
|
|
|
Cash Corporate
Expenses:
|
|
|
|
|
|
|
Depreciation
|
7,229
|
|
8,057
|
|
|
|
Amortization of intangible
assets
|
117
|
|
137
|
|
|
|
Amortization of non-cash
stock based compensation
|
58
|
|
344
|
|
|
|
Gain on disposals of
assets, net
|
(1,300)
|
|
(3,173)
|
|
|
|
Miscellaneous expense
(income), net
|
(1)
|
|
(28)
|
|
|
|
Interest
expense
|
16,332
|
|
19,568
|
|
|
|
Income tax
expense
|
14,039
|
|
1,104
|
|
|
|
Amortization of program
broadcast rights
|
3,972
|
|
3,777
|
|
|
|
Common stock contributed
to 401(k) plan
|
|
|
|
|
|
|
excluding corporate 401(k)
contributions
|
7
|
|
7
|
|
|
|
Network compensation
revenue recognized
|
(173)
|
|
(171)
|
|
|
|
Network compensation per
network affiliation agreement
|
(60)
|
|
-
|
|
|
|
Payments for program
broadcast rights
|
(3,883)
|
|
(3,804)
|
|
|
|
Broadcast Cash Flow Less Cash
Corporate Expenses
|
58,201
|
|
23,859
|
|
144 %
|
|
Corporate and
administrative expenses excluding
|
|
|
|
|
|
|
amortization of non-cash
stock-based compensation
|
3,359
|
|
2,878
|
|
|
|
Broadcast Cash
Flow
|
$ 61,560
|
|
$ 26,737
|
|
130 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
Ended
|
|
|
Year Ended
December 31,
|
|
|
|
December 31,
|
|
|
2010
|
|
2009
|
|
%
Change
|
|
2006
|
|
Net income (loss)
|
$ 23,163
|
|
$ (23,047)
|
|
|
|
$
11,711
|
|
Adjustments to reconcile
to Broadcast Cash Flow Less
|
|
|
|
|
|
|
|
|
Cash Corporate
Expenses:
|
|
|
|
|
|
|
|
|
Depreciation
|
30,630
|
|
32,595
|
|
|
|
34,073
|
|
Amortization of intangible
assets
|
479
|
|
577
|
|
|
|
2,453
|
|
Amortization of non-cash
stock based compensation
|
332
|
|
1,388
|
|
|
|
1,092
|
|
Gain on disposals of
assets, net
|
(1,909)
|
|
(7,628)
|
|
|
|
1,021
|
|
Miscellaneous income,
net
|
(44)
|
|
(54)
|
|
|
|
(677)
|
|
Interest
expense
|
70,045
|
|
69,088
|
|
|
|
66,787
|
|
Loss on early
extinguishment of debt
|
349
|
|
8,352
|
|
|
|
347
|
|
Income tax expense
(benefit)
|
13,447
|
|
(11,260)
|
|
|
|
9,823
|
|
Amortization of program
broadcast rights
|
15,410
|
|
15,130
|
|
|
|
14,234
|
|
Common stock contributed
to 401(k) plan
|
|
|
|
|
|
|
|
|
excluding corporate 401(k)
contributions
|
30
|
|
(19)
|
|
|
|
2,234
|
|
Network compensation
revenue recognized
|
(562)
|
|
(653)
|
|
|
|
(1,089)
|
|
Network compensation per
network affiliation agreement
|
(196)
|
|
30
|
|
|
|
2,216
|
|
Payments for program
broadcast rights
|
(15,473)
|
|
(15,287)
|
|
|
|
(14,839)
|
|
Broadcast Cash Flow Less Cash
Corporate Expenses
|
135,701
|
|
69,212
|
|
96 %
|
|
129,386
|
|
Corporate and
administrative expenses excluding
|
|
|
|
|
|
|
|
|
amortization of non-cash
stock-based compensation
|
13,213
|
|
12,780
|
|
|
|
14,005
|
|
Broadcast Cash
Flow
|
$ 148,914
|
|
$ 81,992
|
|
82 %
|
|
$
143,391
|
|
|
|
|
|
|
|
|
|
Gray Television, Inc.
Gray Television, Inc. is a television broadcast company
headquartered in Atlanta, GA.
We currently operate 36 television stations serving 30
markets. Each of the stations are affiliated with either CBS
(17 stations), NBC (10 stations), ABC (8 stations) or FOX (1
station). In addition, we currently operate 40 digital second
channels including 1 ABC, 4 Fox, 8 CW, 18 MyNetworkTV, 2 Universal
Sports Network, 1 The Country Network affiliates and 6 local
news/weather channels in certain of our existing markets.
Cautionary Statements for Purposes of the "Safe Harbor"
Provisions of the Private Securities Litigation Reform Act
This press release contains statements that constitute
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 and the federal securities
laws. These "forward-looking statements" are not statements
of historical facts, and may include, among other things,
statements regarding our current expectations and beliefs of
operating results for the first quarter of 2011 and other periods,
internet strategies, future expenses and other future events.
Actual results are subject to a number of risks and
uncertainties and may differ materially from the current
expectations and beliefs discussed in this press release. All
information set forth in this release and its attachments is as of
March 1, 2011. We do not
intend, and undertake no duty, to update this information to
reflect future events or circumstances. Information about
certain potential factors that could affect our business and
financial results and cause actual results to differ materially
from those expressed or implied in any forward-looking statements
are included under the captions "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations," in our Quarterly Report on Form 10-Q for the periods
ended March 31, 2010, June 30, 2010, September
30, 2010 and in subsequently filed reports, which are filed
with the U.S. Securities and Exchange Commission (the "SEC") and
available at the SEC's website at www.sec.gov.
SOURCE Gray Television, Inc.