FOR IMMEDIATE RELEASE
Wednesday, December 5, 2012
Media General Presents at UBS Global Media & Communications Conference
RICHMOND, Va. – Media General, Inc. (NYSE: MEG), a local broadcast television and digital media company, presented today at the 40th Annual UBS Global Media & Communications Conference in New York. Company speakers were Marshall N. Morton, president and chief executive officer; George L. Mahoney, vice president and chief operating officer; and Jim Woodward, vice president-finance and chief financial officer.
Mr. Morton said, “This year, Media General fundamentally changed its business model when we exited the newspaper business. We are now focusing all of our resources on our television stations and our growing digital and mobile platforms. In addition to selling our newspapers, our new focus was further tightened by discontinuing our former digital advertising services businesses. We also ceased operation of a broadcast equipment subsidiary. We refinanced $363 million of bank debt that was due in March 2013 and extended its maturity to 2020. We completed our plan to reduce corporate expense from $32 million to $20 million and will enter 2013 slightly below that new run rate.
“On August 22, I announced my plan to retire at the end of this year. With the newspapers sold and debt refinanced, combined with the fact that I turned 67 in October, the time is right. I worked with the Board of Directors for several years to plan for the best management succession. I was delighted that the Board chose George Mahoney to succeed me. George and I have worked together closely since he joined the company in 1993, as General Counsel and Corporate Secretary. More recently, George ran our Digital Media and central Broadcast operations. George has the experience, talent and energy to lead Media General to new successes in a media world that’s making new opportunities available practically every day. George will be supported well by Jim Woodward. Jim led the debt refinance and newspaper sale processes this year and made a real success of both,” said Mr. Morton.
Mr. Mahoney said, “This has been a very strong year for our stations, with significant revenue growth in all major categories. Political advertising reached an all-time high. We benefited from operating top-ranked stations, where political advertisers prefer to place their ads. Our outlook for Political revenues this year has increased to $64 million, up from our previous guidance of $57-58 million.
“We capitalized fully on the event-driven revenue opportunities provided by the Summer Olympics and Super Bowl on our NBC stations. Our revenue growth will also include a 75% increase in Retransmission revenues, and an 18% increase in Digital revenues. Further, we’ve seen healthy growth in our core business, driven by increased spending by automotive, financial, grocery, medical, telecommunications and travel industry advertisers,” said Mr. Mahoney.
Mr. Woodward said the company expects to enter 2013 with a cash balance in the neighborhood of $28 million. “Provided the capital markets are strong and open, we plan to refinance our 11.75% Senior Notes, which are callable in February of 2014, at a lower rate. We will have the option of using any cash on the balance sheet at the end of 2013 to pay down a portion of that debt.
“Looking ahead to next year, total revenues in 2013 will decrease from this year, due to the absence of non-recurring Political and other event-driven revenues. We have in place a number of key revenue drivers to help mitigate these shortfalls from this year, starting with Political revenues of at least $5 million. The Super Bowl on CBS will benefit 8 of our stations. Retransmission revenues will increase.
“Our Digital initiatives should generate better than industry growth rates. The momentum in our core business is continuing, and this will help us achieve above-market revenue performance. More Local news and programming will provide more inventory. We will implement special incentives for volume advertisers and business development programs to drive local time sales,” said Mr. Woodward.
Mr. Morton said, “Media General is a much stronger company, with excellent growth potential, based on our new model as a broadcaster. Our operating results and cash flow are strong, even in the ‘odd’ years. We’ll focus on progressively increasing cash flow margins at our stations by driving ratings and share increases as well as through expense management. We will delever over time, starting with the refinancing of our 11-3/4% notes. The strong management team I’ve been working with for years is primed to lead the company starting January 1. I’m confident that they – and all of our employees – will make the most of the new opportunities provided by our new business model,” Mr. Morton said.
The company provided the following guidance for the full year 2012:
|Political revenues||$64 million|
|Retransmission revenues||$37 million|
|Digital revenues||$10 million|
|Total net revenues||$350 million|
|Broadcast Cash Flow||$141 million|
|Broadcast Cash Flow Margin||40%|
|Cash Interest||$69 million|
|Non-Cash Interest Expense||$9 million|
|Capital Expenditures||$17 million|
|Pension Contribution||$9 million|
|The company provided the following guidance for the full year 2013:|
|Cash Interest||$68 million|
|Non-Cash Interest Expense||$9 million|
|Capital Expenditures||$15 million|
|Pension Contribution||$4.5 million|
This news release contains forward-looking statements that are subject to various risks and uncertainties and should be understood in the context of the company’s publicly available reports filed with the Securities and Exchange Commission. Media General’s future performance could differ materially from its current expectations.
About Media General
Media General is a leading provider of news, information and entertainment across 18 network-affiliated broadcast television stations and their associated digital media and mobile platforms. The company’s stations serve consumers and advertisers in strong local markets, primarily in the Southeast. Media General’s network affiliates include eight NBC stations, eight CBS stations, one ABC station and one CW station. Six of the company’s stations operate in the Top 40 markets in the United States. Media General’s stations reach more than one-third of TV households in the Southeast and more than 8 percent of U.S. TV households. Media General entered the television business in 1955 when it launched WFLA-TV in Tampa, Florida, as an NBC affiliate. Today, WFLA is the company’s largest TV station, operating in the 14th largest DMA in the United States.
Contact Media General
Additional information about Media General is available on its web site www.mediageneral.com or by contacting Lou Anne J. Nabhan, Vice President-Corporate Communications, at (804) 649-6103 or firstname.lastname@example.org.