Nexstar Media Group (NXST) Q4 2020 earnings summary

Executive summary

• Record FY20 net revenue of $4.50B, operating income of $1.38B, net income attributable of $811.4M and diluted EPS of $17.37; Tribune contributions and election-year political demand drove results despite COVID-19 disruption.

• Adjusted EBITDA was $1.95B; free cash flow was $1.28B, or $1.30B before one-time transaction expenses.

• COVID-related business disruption was most pronounced early in Q2, followed by improvement through year-end as businesses reopened; operations remained profitable and liquidity was not materially affected.

Financial highlights

• Revenue rose 48.1% to $4.50B; distribution revenue increased 57.3% to $2.15B, political advertising reached $507.6M, and core advertising was $1.57B.

• Operating income was $1.38B versus $655.1M; net income attributable to Nexstar Media Group, Inc. was $811.4M versus $230.3M, with diluted EPS of $17.37 versus $4.80.

• Operating cash flow was $1.25B; cash was $152.7M and working capital was $479.1M at Dec. 31, 2020.

• Adjusted EBITDA before one-time transaction expenses increased 105.3% to $1.996B; Adjusted EBITDA increased 117.2% to $1.951B.

• Free cash flow before one-time transaction expenses increased 150.5% to $1.305B; free cash flow increased 191.3% to $1.280B.

Outlook and guidance

• Pro forma average annual free cash flow guidance for the 2021/2022 cycle is ~$1.27B; management cited visibility to meeting or exceeding targets as economic trends improve and vaccine distribution progresses.

• Distribution revenue was expected to continue increasing as retransmission rates move toward a more balanced share of pay-TV programming fees.

• The rescheduled Summer Olympics could support higher 2021 advertising revenue if held as scheduled.

• NewsNation was set to expand to five weeknight hours in March 2021, including NewsNation Prime, Banfield, NewsNation Early Edition and The Donlon Report.