Nexstar Media Group (NXST) Q4 2019 earnings summary

Executive summary

• FY19 net revenue reached $3.039B, up 9.9% YoY; Adjusted EBITDA was $898.1M and free cash flow was $439.5M after one-time transaction expenses.

• Tribune acquisition closed in September for $7.187B; station divestitures generated $1.36B consideration and expanded the platform to 197 stations across 115 markets.

• FY19 results include acquisition costs, a $63.3M digital impairment, a $96.1M net station-sale gain, and FCC repack reimbursements.

Financial highlights

• Net revenue was $3.039B, up 9.9% YoY; operating income was $655.1M vs. $757.8M; net income attributable to shareholders was $230.3M vs. $389.5M.

• Diluted EPS was $4.80 vs. $8.21; reported net income was $236.3M vs. $388.3M.

• Distribution revenue rose 22.1% to $1.369B and core advertising increased 22.5% to $1.335B, primarily reflecting Tribune; digital revenue fell 7.5% to $241.5M.

• Political revenue declined 79.3% to $51.9M as 2019 was not an election year; legacy television ad revenue fell $221.9M.

• Adjusted EBITDA was $898.1M, excluding $74.1M in corporate one-time transaction costs; free cash flow was $439.5M, or $520.9M before one-time transaction expenses.

Outlook and guidance

• Expected higher 2020 distribution revenue reflects 2019 contract renewals and annual subscriber-rate escalators; 2020 political spending was projected to reach record levels.

• COVID-19 created uncertainty around the depth and duration of operational impacts; cost controls, liquidity management, distribution growth, and election-related advertising were identified as resilience factors.

• News Nation, a three-hour live primetime newscast on WGN America, was planned for summer 2020, with reach projected at ~75M U.S. households.

• Available cash, operating cash flow, and borrowing capacity were expected to cover working capital, capex, interest, and scheduled debt payments for at least 12 months from the filing date.