Fisher Communications, Inc. (NASDAQ: FSCI)
- Net Television Revenue, excluding Political
increased 14%
- TV cash flow increased 33%
- Adjusted EBITDA increased 51%
Fisher Communications, Inc. (NASDAQ: FSCI), a leader in local
media innovation, today reported its financial results for the
first quarter ended March 31, 2013. The Company reported a net loss
of $0.8 million, or $0.09 per share, in the first quarter, compared
to a net loss of $1.9 million, or $0.21 per share, in the first
quarter of 2012. The first quarter's results include $1.2 million
of pre-tax transaction-related expenses. Excluding the after-tax
transaction-related expenses, the financial results for the first
quarter would be breakeven.
First Quarter 2013 Financial Highlights
(All comparisons are made to the first quarter of 2012 unless
otherwise noted)
- Total revenues were $36.8 million, up 8% from $33.9
million.
- Direct operating, selling, general and administrative and
programming costs increased 8%, or $2.6 million, driven by $1.2
million of transaction related expenses and increased stock
compensation expense.
- Adjusted EBITDA of $2.2 million was up 51% from $1.5
million.
Television:
- Total TV net revenue was up 12% year-over-year to $32.6 million
driven by strong growth in the automotive, financial services and
retail categories.
- Retransmission consent revenue increased 82% to $6.5 million,
as a result of renewed contracts.
- TV cash flow increased 33% to $7.0 million; TV cash flow margin
was 22%, up from 18%.
- KOMO-TV and KATU-TV were recently recognized for their quality
journalism with 5 Edward R. Murrow awards. KOMO-TV earned the
coveted award for Overall Excellence as well as Breaking News,
Investigative Reporting and Best Documentary. KATU-TV received the
Murrow award for Best Newscast.
- During first quarter, KOMO-TV took top honors in local news
ratings in key demographics; the station also became the #1 station
in the Seattle DMA sign-on to sign-off.
- Fisher Interactive, the Company's digital media unit, achieved
record audience at the end of the first quarter with nearly 52
million page views network-wide; in Seattle, komonews.com exceeds
its closest television competitor in page views by a 2:1
margin.
Radio:
- Radio net revenue was down 9% year-over-year to $4.3 million
due to market softness.
- Radio cash flow was down $0.22 million to $0.65 million; radio
cash flow margin of 15% was down from 18%.
- KOMO Newsradio was recognized with the Edward R. Murrow award
for Overall Excellence as well as Best Newscast, Breaking News and
Continuing Coverage; Fisher's music radio station, KPLZ-FM (STAR
101.5) earned a Murrow award for Best Documentary.
Balance Sheet & Liquidity
- Cash and cash equivalents were $18.9 million at quarter-end,
compared to $20.4 million at the end of 2012.
- Fisher remains debt free and has an unused $30 million senior
secured revolving credit facility in place.
Management Commentary "2013 is off to a
strong start, led by the continued market share growth among our
broadcast stations. This momentum reflects the quality and value of
our local brands and is the direct result of solid execution across
our group of broadcast stations. A testament to the excellence of
our local media properties, Fisher recently dominated the 2013
Edward R. Murrow Awards in the Northwest region, bringing home 10
Edward R. Murrow awards, including the coveted Overall Excellence
awards for KOMO-TV (ABC) and KOMO Newsradio in Seattle," said
Colleen B. Brown, Fisher's President and Chief Executive Officer.
"At the same time, we coupled operational execution with financial
excellence, delivering substantial year-over-year improvements in
TV cash flow and adjusted EBITDA."
She added, "Subsequent to quarter-end, we announced that we have
entered into a definitive merger agreement with Sinclair Broadcast
Group, which we believe will deliver significant value to our
shareholders. In addition, the combined entity will provide our
stations, team members and business partners with new opportunities
to flourish. As always, we remain focused on solid execution of our
strategic plan and the continued growth of our stations."
First Quarter 2013 Conference Call Due to
the pending acquisition by Sinclair Broadcast Group, Inc., the
Company will not be conducting a conference call to discuss the
first quarter 2013 financial results.
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, net loss excluding the after-tax transaction-related
expenses 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 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.
Net loss excluding the after-tax transaction-related expenses,
is calculated as net loss plus transaction-related expenses,
adjusted by the estimated tax impact by applying the annual
effective tax rate.
EBITDA is calculated as income from operations plus amortization
of broadcast rights; depreciation and amortization; stock-based
compensation; loss on disposal of property, plant and equipment,
net; and non-cash charges minus payments for broadcast rights; gain
on sale of real estate, net; and amortization of non-cash benefit
resulting from a change in national advertising representation
firm.
Adjusted EBITDA excludes Plaza rent expense in 2012 and 2013.
Management believes this presentation of Adjusted EBITDA is useful
to investors because it provides investors with a comparable
measure given the rent expense for 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, seven low
power television stations, three 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 Certain
statements in this news release constitute "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements involve known
and unknown risks, uncertainties and other factors which may cause
the actual results, performance or achievements of the Company to
be materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements. Statements preceded by, followed by or that otherwise
include the words "believes," "expects," "anticipates," "intends,"
"projects," "estimates," "plans," "increase," "forecast" and
"guidance" and similar expressions or future or conditional verbs
such as "will," "should," "would," "may" and "could" are based upon
then-current assumptions and expectations and are generally
forward-looking in nature and not historical facts. Any statements
that refer to outlook, expectations or other characterizations of
future events, circumstances or results are also forward-looking
statements. The forward-looking statements contained in this news
release, including, among other things, statements related to
changes in revenue, cash flow and operating expenses, the proposed
merger involving the Company and Sinclair Broadcast Group and the
expected closing of the KMTR TV transaction, 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. There can
be no assurance that the proposed merger will occur as currently
contemplated, or at all, or that the expected benefits from the
transaction will be realized on the timetable currently
contemplated, or at all. Additional risks and uncertainties
relating to the proposed merger include, but are not limited to,
uncertainties as to the satisfaction of closing conditions to the
proposed merger, including timing and receipt of regulatory
approvals, timing and receipt of approval by the shareholders of
the Company, the respective parties' performance of their
obligations under the merger agreement relating to the proposed
merger, and other factors affecting the execution of the
transaction.
A further list and description of important assumptions and
other important factors that could cause actual results to differ
materially from those in the forward-looking statements are
specified in the Company's Annual Report on Form 10-K for the year
ended December 31, 2012, as amended, included under headings such
as "Forward-Looking Statements," "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations," the Company's most recently filed Form 10-Q, and in
other filings and furnishings made by the Company with the SEC from
time to time. Other unknown or unpredictable factors could also
have material adverse effects on the Company's performance or
achievements. In light of these risks, uncertainties, assumptions
and factors, the forward-looking events discussed in this news
release may not occur. You are cautioned not to place undue
reliance on these forward-looking statements, which speak only as
of the date stated, or if no date is stated, as of the date of this
news release. The Company undertakes no obligation to release
publicly any revisions to any forward-looking statements, to report
events or to report the occurrence of unanticipated events unless
required by law.
Additional Information In connection with
the meeting of the Company's shareholders to be held with respect
to the proposed merger involving the Company and Sinclair Broadcast
Group, the Company plans to file with the SEC preliminary and
definitive proxy statements and other relevant materials. The
definitive proxy statement (when available) will be mailed to the
Company's shareholders. INVESTORS AND SECURITYHOLDERS ARE ADVISED
TO READ THE PROXY STATEMENT WHEN IT BECOMES AVAILABLE BEFORE MAKING
ANY VOTING OR INVESTMENT DECISION WITH RESPECT TO THE PROPOSED
MERGER BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. Investors and
security holders will be able to obtain a free copy of the proxy
statement (when available) and other relevant documents filed by
the Company with the SEC from the SEC's website at
http://www.sec.gov. In addition, investors and security holders may
obtain free copies of the documents filed with the SEC at the
Company's website at www.fsci.com by clicking on the "Investor
Relations" link, then clicking on the "SEC Filings" link.
The Company and its directors, executive officers and certain
other employees may be deemed to be participants in the
solicitation of proxies of the Company's shareholders in connection
with the proposed merger. Investors and security holders may obtain
more detailed information regarding the names, affiliations and
interests of the Company's directors and executive officers by
reading the Company's Form 10-K/A for the year ended December 31,
2012, which was filed with the SEC on April 29, 2013. Additional
information regarding potential participants in such proxy
solicitation and a description of their direct and indirect
interests, by security holdings or otherwise, will be included in
the proxy statement and other relevant materials filed by the
Company with the SEC in connection with the proposed merger when
they become available.
Fisher Communications, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
Three months ended %
March 31, Increase
(in thousands, except per-share
amounts) 2013 2012 (decrease)
----------- ----------- ----------
Revenue $ 36,791 $ 33,932 8%
----------- ----------- ----------
Operating expenses
Direct operating costs 17,646 16,656 6%
Selling, general and administrative
expenses 16,213 14,554 11%
Amortization of broadcast rights 2,402 2,457 (2%)
Depreciation and amortization 1,794 1,757 2%
Gain on sale of real estate, net - (373) 100%
----------- ----------- ----------
Total operating expenses 38,055 35,051 9%
----------- ----------- ----------
Loss from operations (1,264) (1,119) (13%)
Loss on extinguishment of senior
notes, net - (1,482)
Other income, net 30 30
Interest expense (30) (266)
----------- -----------
Loss from operations before income
taxes (1,264) (2,837)
Benefit for income taxes (495) (973)
----------- -----------
Net loss $ (769) $ (1,864)
=========== ===========
Net loss per share (basic and
diluted) $ (0.09) $ (0.21)
=========== ===========
Weighted average shares outstanding
(basic and diluted) 8,800 8,847
----------- -----------
Dividends declared per share $ 0.15 $ -
=========== ===========
Fisher Communications, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
March 31, December 31,
(in thousands) 2013 2012
------------- -------------
ASSETS
Current assets
Cash and cash equivalents $ 18,943 $ 20,403
Receivables, net 28,975 28,243
Income taxes receivable 1,314 834
Deferred income taxes, net 1,062 1,062
Prepaid expenses and other 3,588 3,629
Broadcast rights 4,298 6,690
============= =============
Total current assets 58,180 60,861
Restricted cash 125 3,624
Cash surrender value of life insurance and
annuity contracts 18,314 18,100
Goodwill, net 13,293 13,293
Intangible assets, net 40,013 40,072
Other assets 5,414 5,208
Deferred income taxes, net 685 711
Property, plant and equipment, net 38,847 39,155
------------- -------------
Total assets $ 174,871 $ 181,024
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 1,475 $ 1,496
Accrued payroll and related benefits 4,038 4,200
Broadcast rights payable 4,057 6,488
Income taxes payable 145 3,060
Current portion of accrued retirement benefits 1,368 1,368
Other current liabilities 9,083 7,260
------------- -------------
Total current liabilities 20,166 23,872
Deferred income 8,043 8,338
Accrued retirement benefits 22,475 22,574
Other liabilities 3,134 3,105
------------- -------------
Total liabilities 53,818 57,889
------------- -------------
Total stockholders' equity 121,053 123,135
------------- -------------
Total liabilities and stockholders' equity $ 174,871 $ 181,024
============= =============
Fisher Communications, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Three months ended March 31,
(in thousands) 2013 2012
------------- -------------
Operating activities
Net loss $ (769) $ (1,864)
Adjustments to reconcile net loss to net
cash used in operating activities
Depreciation and amortization 1,794 1,757
Deferred income taxes, net 26 18
Loss on extinguishment of senior notes,
net - 594
Loss in operations of equity investees 50 44
Loss on disposal of property, plant and
equipment 17 11
Gain on sale of real estate, net - (373)
Amortization of deferred financing fees 13 19
Amortization of deferred gain on sale of
Fisher Plaza (190) (190)
Amortization of debt security investment
premium - 74
Amortization of non-cash contract
termination fee (365) (365)
Amortization of broadcast rights 2,402 2,457
Payments for broadcast rights (2,441) (2,651)
Stock-based compensation 830 451
Change in operating assets and liabilities,
net
Receivables (732) 5,328
Prepaid expenses and other 41 12
Cash surrender value of life insurance and
annuity contracts (214) (207)
Other assets (227) 37
Accounts payable, accrued payroll and
related benefits and other current
liabilities 1,337 (815)
Interest payable - (1,556)
Income taxes receivable and payable (3,395) (22,691)
Accrued retirement benefits (46) (2)
Other liabilities 341 117
------------- -------------
Net cash used in operating activities (1,528) (19,795)
------------- -------------
Investing activities
Investment in equity investee (11) (9)
Purchase of held to maturity debt security
investments - (82,733)
Purchase of property, plant and equipment (1,182) (4,445)
Proceeds from sale of available for sale
debt security investments held as
restricted cash 3,499 -
Proceeds from sale of held to maturity debt
security investments - 7,628
Proceeds from maturity of held to maturity
debt security investments - 25,000
Proceeds from sale of real estate - 570
------------- -------------
Net cash provided by (used in)
investing activities 2,306 (53,989)
Financing activities
Repurchase of senior notes - (61,834)
Repurchase of common stock - (86)
Shares settled upon vesting of stock rights (845) (437)
Payments on capital lease obligations (51) (47)
Cash dividends paid (1,342) -
------------- -------------
Net cash used in financing activities (2,238) (62,404)
------------- -------------
Net decrease in cash and cash equivalents (1,460) (136,188)
Cash and cash equivalents, beginning of period 20,403 143,017
------------- -------------
Cash and cash equivalents, end of period $ 18,943 $ 6,829
============= =============
Fisher Communications, Inc. and Subsidiaries
GAAP to Non-GAAP Reconciliations
(Unaudited, in thousands)
The following table provides a reconciliation of loss from operations
(GAAP) to EBITDA (non-GAAP) in each of the periods presented:
Three months ended March 31,
----------------------------
2013 2012
------------- -------------
Loss from operations $ (1,264) $ (1,119)
Adjustments:
Amortization of broadcast rights 2,402 2,457
Payments for broadcast rights (2,441) (2,651)
Depreciation and amortization 1,794 1,757
Stock-based compensation 830 451
Loss on disposal of property, plant and
equipment, net 17 11
Gain on sale of real estate, net - (373)
Other - 45
Amortization of non-cash benefit resulting
from change in national advertising
representation firm (365) (365)
------------- -------------
EBITDA (Non-GAAP) $ 973 $ 213
============= =============
Fisher Plaza rent expense 1,268 1,271
------------- -------------
Adjusted EBITDA (Non-GAAP) $ 2,241 $ 1,484
============= =============
The following table provides a reconciliation of television segment income
from operations to television broadcast cash flow in each of the periods
presented:
Three months ended March 31,
----------------------------
2013 2012
------------- -------------
Television segment income from operations $ 6,681 $ 5,079
Adjustments:
Amortization of broadcast rights 2,402 2,457
Payments for broadcast rights (2,441) (2,651)
Net trade and internet loss (1) 370 394
------------- -------------
Television broadcast cash flow (Non-GAAP) $ 7,012 $ 5,279
============= =============
Television broadcast cash flow as a percentage
of television segment revenue 21.5% 18.1%
============= =============
Television segment revenue $ 32,560 $ 29,159
============= =============
(1) Excludes multiplatform internet related revenue
The following table provides a reconciliation of radio segment income from
operations to radio broadcast cash flow in each of the periods presented:
Three months ended March 31,
----------------------------
2013 2012
------------- -------------
Radio segment income from operations $ 613 $ 798
Adjustments:
Net trade loss 35 74
------------- -------------
Radio broadcast cash flow (Non-GAAP) $ 648 $ 872
============= =============
Radio broadcast cash flow as a percentage of
radio segment revenue 15.0% 18.4%
============= =============
Radio segment revenue $ 4,320 $ 4,733
============= =============
The following table provides television net revenue comparisons in each of
the periods presented:
Three months ended March 31, %
----------------------------- ----------
Increase
2013 2012 (decrease)
-------------- -------------- ----------
Core advertising (local and
national) $ 23,418 $ 22,214 5%
Political - 519 (100%)
Internet (1) 1,066 1,282 (17%)
Retransmission 6,523 3,577 82%
Trade, barter and other 1,553 1,567 (1%)
-------------- -------------- ----------
Television segment net revenue $ 32,560 $ 29,159 12%
============== ============== ==========
Television segment net revenue,
excluding political $ 32,560 $ 28,640 14%
(1) Excludes multiplatform internet
related revenue
The following table provides radio net revenue comparisons in
each of the periods presented:
Three months ended March 31, %
----------------------------- ----------
Increase
2013 2012 (decrease)
-------------- -------------- ----------
Core advertising (local and
national) $ 4,132 $ 4,458 (7%)
Political 12 40 (70%)
Trade, barter and other 176 235 (25%)
-------------- -------------- ----------
Radio segment net revenue $ 4,320 $ 4,733 (9%)
============== ============== ==========
Radio segment net revenue,
excluding political $ 4,308 $ 4,693 (8%)
The following table provides a reconciliation of net loss (GAAP) to
adjusted net loss, excluding the after-tax transaction-related expenses
(non-GAAP) in each of the periods presented:
Three months ended March 31,
----------------------------
2013 2012
------------- -------------
Net loss $ (769) $ (1,864)
Adjustments:
Transaction-related expenses 1,233 -
Effect of income taxes (483) -
------------- -------------
Adjusted net loss, excluding the after-tax
transaction-related expenses $ (19) $ (1,864)
============= =============
Adjusted net loss per share assuming dilution,
excluding the after-tax transaction-related
expenses $ - $ (0.21)
============= =============
Weighted average shares outstanding assuming
dilution 8,800 8,847
============= =============
Contacts: Addo Communications 310-829-5400
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