Fisher Communications, Inc. (NASDAQ: FSCI), a leader in local media
innovation, today reported its financial results for the second
quarter ended June 30, 2013. The Company reported net income of
$0.4 million, or $0.05 per share, in the quarter, compared to net
income of $4.3 million, or $0.48 per share, in the second quarter
of 2012. The second quarter's results include $3.9 million of
pre-tax strategic transaction-related expenses. Excluding the
after-tax strategic transaction-related expenses, net income for
the second quarter would be $2.8 million, or $0.31 per share.
Second Quarter 2013 Financial Review (All
comparisons are made to the second quarter of 2012 unless otherwise
noted)
- Total revenues were $42.1 million, roughly flat year-over-year.
Excluding political revenue, total revenue was up 1%.
- Direct operating, selling, general and administrative and
programming costs increased 18%, or $6.0 million, primarily driven
by $3.9 million of strategic transaction-related expenses and $2.0
million of increased network programming fees. Otherwise, costs
were flat with prior year.
- Adjusted EBITDA of $4.3 million was down 58% from $10.2
million. Included in Adjusted EBITDA for the second quarter was
$3.9 million of pre-tax strategic transaction-related
expenses.
Television:
- Total TV net revenue was flat year-over-year. Excluding
political revenue, TV net revenue was up 2%.
- Core revenue increased 4% year-over-year due to the strength in
automotive and professional fees.
- Retransmission consent revenue increased 6% to $6.6 million, as
a result of renewed contracts.
- TV cash flow decreased 18% to $10.3 million; TV cash flow
margin was 28%, down from 34%. Excluding the increase in network
programming fees TV cash flow would be essentially flat
year-over-year.
- During the second quarter, KOMO 4 News was awarded 15 Regional
Emmys, including the most prestigious Station Excellence
Award.
- For the second consecutive year, KOMO 4 won Best Evening
Newscast, and for the third consecutive year, Best Morning
Newscast.
- Fisher Interactive, the Company's digital media unit, achieved
its highest audience ever in the second quarter delivering nearly
50 million average monthly page views network-wide.
- On June 1, 2013 the Company closed on its previously announced
acquisition of assets of KMTR(TV), the NBC and CW affiliates in
Eugene, Oregon.
Radio:
- Radio net revenue was down 2% year-over-year to $5.4 million
due to market softness.
- Radio cash flow was down $0.15 million to $1.70 million; radio
cash flow margin of 31% was down slightly from 33%.
Balance Sheet & Liquidity
- Cash and cash equivalents were $13.1 million at quarter-end,
compared to $20.4 million at the end of 2012, primarily reflecting
the closing of the KMTR(TV) transaction.
- Fisher remains virtually debt free with a $30.0 million senior
secured revolving credit facility in place.
Management Commentary "The second quarter
marked a continuation of our positive momentum, with Fisher
delivering another solid quarter financially and operationally.
Once again our performance highlights the strength of our broadcast
stations in their respective markets, which continued to climb in
ratings rank and received a number of coveted awards during the
quarter. KOMO 4 News, Fisher's flagship station in Seattle,
recently won 15 Regional Emmys, including the most prestigious
Station Excellence Award. And for the second consecutive year, KOMO
4 won Best Evening Newscast, and for the third consecutive year,
Best Morning Newscast," said Colleen B. Brown, Fisher's President
and Chief Executive Officer. "We are also pleased to announce that
in the second quarter we closed our acquisition of assets of
KMTR(TV) in Eugene, Oregon. We look forward to working with the
KMTR team to leverage our strengths, reach and resources to better
serve the Eugene community."
Second Quarter 2013 Conference Call Due to
the pending acquisition by Sinclair Broadcast Group, Inc., the
Company will not conduct a conference call to discuss the second
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 16 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, 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, major world
news events and the proposed merger involving the Company and
Sinclair Broadcast Group, Inc. 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.
Fisher Communications, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
(in thousands, Three months ended Six months ended
except per-share June 30, % June 30, %
amounts) 2013 2012 Change 2013 2012 Change
-------- -------- ------ -------- -------- ------
Revenue 42,067 42,270 (0%) $ 78,858 $ 76,202 3%
-------- -------- ------ -------- -------- ------
Operating expenses
Direct operating
costs 17,751 15,932 (11%) 35,397 32,588 (9%)
Selling, general
and
administrative
expenses 19,257 15,081 (28%) 35,470 29,635 (20%)
Amortization of
broadcast
rights 2,440 2,436 (0%) 4,842 4,893 1%
Depreciation and
amortization 1,838 1,748 (5%) 3,632 3,505 (4%)
Loss (gain) on
sale of real
estate, net - 209 100% - (164) (100%)
-------- -------- ------ -------- -------- ------
Total operating
expenses 41,286 35,406 (17%) 79,341 70,457 (13%)
-------- -------- ------ -------- -------- ------
Income (loss) from
operations 781 6,864 (89%) (483) 5,745 (108%)
Loss on
extinguishment of
senior notes, net - - - (1,482)
Other income
(expense), net (36) 64 (6) 94
Interest expense (30) (10) (60) (276)
-------- -------- -------- --------
Income (loss) from
operations before
income taxes 715 6,918 (549) 4,081
Provision for
(benefit from)
income taxes 277 2,636 (218) 1,663
-------- -------- -------- --------
Net Income (loss) $ 438 $ 4,282 $ (331) $ 2,418
======== ======== ======== ========
Net income (loss)
per share:
Basic $ 0.05 $ 0.48 $ (0.04) $ 0.27
-------- -------- -------- --------
Diluted $ 0.05 $ 0.48 $ (0.04) $ 0.27
-------- -------- -------- --------
Weighted average
shares
outstanding:
Basic 8,858 8,874 8,829 8,860
-------- -------- -------- --------
Diluted 8,955 8,928 8,829 8,936
-------- -------- -------- --------
Dividends declared
per share $ 0.15 $ - $ 0.30 $ -
-------- -------- -------- --------
Fisher Communications, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
June 30, December 31,
(in thousands) 2013 2012
------------ ------------
ASSETS
Current assets
Cash and cash equivalents $ 13,144 $ 20,403
Receivables, net 31,718 28,243
Income taxes receivable 1,051 834
Deferred income taxes, net 1,062 1,062
Prepaid expenses and other 1,970 3,629
Broadcast rights 1,990 6,690
------------ ------------
Total current assets 50,935 60,861
Restricted cash 125 3,624
Cash surrender value of life insurance and annuity
contracts 17,824 18,100
Goodwill, net 13,702 13,293
Intangible assets, net 44,804 40,072
Other assets 5,393 5,208
Deferred income taxes, net 688 711
Property, plant and equipment, net 41,244 39,155
------------ ------------
Total assets $ 174,715 $ 181,024
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable 1,315 $ 1,496
Accrued payroll and related benefits 3,359 4,200
Broadcast rights payable 1,750 6,488
Income taxes payable 160 3,060
Current portion of accrued retirement benefits 1,368 1,368
Other current liabilities 10,582 7,260
------------ ------------
Total current liabilities 18,534 23,872
Long-term debt 1,700 -
Deferred income 7,742 8,338
Accrued retirement benefits 22,381 22,574
Other liabilities 3,369 3,105
------------ ------------
Total liabilities 53,726 57,889
------------ ------------
Total stockholders' equity 120,989 123,135
------------ ------------
Total liabilities and stockholders' equity $ 174,715 $ 181,024
============ ============
Fisher Communications, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Six months ended June 30,
(in thousands) 2013 2012
-------------- --------------
Operating activities
Net income $ (331) $ 2,418
Adjustments to reconcile net income (loss)
to net cash provided by (used in)
operating activities
Depreciation and amortization 3,632 3,505
Deferred income taxes, net 56 37
Loss on extinguishment of senior
notes, net - 594
Loss in operations of equity investees 107 74
Loss on disposal of property, plant
and equipment, net 93 20
Gain on sale of real estate, net - (164)
Amortization of deferred financing
fees 26 19
Amortization of deferred gain on sale
of Fisher Plaza (379) (379)
Amortization of debt security
investment premium - 85
Amortization of non-cash contract
termination fee (487) (731)
Amortization of broadcast rights 4,842 4,893
Payments for broadcast rights (4,881) (5,027)
Stock-based compensation 1,424 826
Change in operating assets and
liabilities, net
Receivables (3,400) 920
Prepaid expenses and other 1,696 961
Cash surrender value of life insurance
and annuity contracts 276 (398)
Other assets (218) 96
Accounts payable, accrued payroll and
related benefits and other current
liabilities 2,324 (2,423)
Interest payable - (1,556)
Income taxes receivable and payable (3,118) (20,075)
Accrued retirement benefits (88) (11)
Other liabilities 448 546
-------------- --------------
Net cash provided by (used in)
operating activities 2,022 (15,770)
-------------- --------------
Investing activities
Investment in equity investee (45) (32)
Purchase of debt security investments - (82,733)
Purchase of investment in a radio station - (750)
Purchase of option to acquire a radio
station - (615)
Purchase of television stations (8,398) -
Purchase of property, plant and equipment (2,598) (5,731)
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 - 825
-------------- --------------
Net cash used in investing activities (7,542) (56,408)
-------------- --------------
Financing activities
Proceeds from long-term debt 1,700 -
Repurchase of senior notes - (61,834)
Repurchase of common stock - (86)
Shares settled on vesting of stock rights (852) (433)
Proceeds from exercise of stock options 210 25
Payments on capital lease obligations (104) (96)
Cash dividends paid (2,693) -
-------------- --------------
Net cash used in financing activities (1,739) (62,424)
-------------- --------------
Net decrease in cash and cash equivalents (7,259) (134,602)
Cash and cash equivalents, beginning of
period 20,403 143,017
-------------- --------------
Cash and cash equivalents, end of period $ 13,144 $ 8,415
-------------- --------------
Fisher Communications, Inc. and Subsidiaries
GAAP to Non-GAAP Reconciliations
(Unaudited, in thousands)
The following table provides a reconciliation of income (loss) from
operations (GAAP) to EBITDA (non-GAAP) and Adjusted EBITDA (non-GAAP) in
each of the periods presented:
Three months ended Six months ended
June 30, June 30,
---------------------- --------------------
2013 2012 2013 2012
---------- ---------- --------- ---------
Income (loss) from operations $ 781 $ 6,864 $ (483) $ 5,745
Adjustments:
Amortization of broadcast
rights 2,440 2,436 4,842 4,893
Payments for broadcast
rights (2,440) (2,376) (4,881) (5,027)
Depreciation and
amortization 1,838 1,748 3,632 3,505
Stock-based compensation 594 375 1,424 826
Loss on disposal of
property, plant and
equipment, net 76 9 93 20
Loss (gain) on sale of
real estate, net - 209 - (164)
Other - 34 - 79
Amortization of non-cash
benefit resulting from
change in national
advertising
representation firm (122) (366) (487) (731)
---------- ---------- --------- ---------
EBITDA (Non-GAAP) $ 3,167 $ 8,933 $ 4,140 $ 9,146
========== ========== ========= =========
Plaza rent expense 1,109 1,253 2,377 2,524
---------- ---------- --------- ---------
Adjusted EBITDA (Non-GAAP) $ 4,276 $ 10,186 $ 6,517 $ 11,670
========== ========== ========= =========
The following table provides a reconciliation of television income from
operations (GAAP) to television cash flow (non-GAAP) in each of the
periods presented:
Three months ended Six months ended
June 30, June 30,
---------------------- --------------------
2013 2012 2013 2012
---------- ---------- --------- ---------
Television segment income from
operations $ 10,314 $ 12,373 $ 16,995 $ 17,452
Adjustments:
Amortization of broadcast
rights 2,440 2,436 4,842 4,893
Payments for broadcast
rights (2,440) (2,376) (4,881) (5,027)
Net trade and internet
loss (1) 25 117 395 511
---------- ---------- --------- ---------
Television broadcast cash flow
(Non-GAAP) $ 10,339 $ 12,550 $ 17,351 $ 17,829
========== ========== ========= =========
Television broadcast cash flow
as a percentage of television
segment revenue 28.2% 34.1% 25.0% 27.0%
========== ========== ========= =========
Television segment revenue $ 36,707 $ 36,778 $ 69,267 $ 65,937
========== ========== ========= =========
(1) Excludes multiplatform
internet related revenue
The following table provides a reconciliation of radio income from
operations (GAAP) to radio broadcast cash flow (non-GAAP) in each of the
periods presented:
Three months ended Six months ended
June 30, June 30,
-------------------- --------------------
2013 2012 2013 2012
--------- --------- --------- ---------
Radio segment income from
operations $ 1,654 $ 1,835 $ 2,267 $ 2,633
Adjustments:
Net trade loss 50 14 85 88
--------- --------- --------- ---------
Radio broadcast cash flow (Non-
GAAP) $ 1,704 $ 1,849 $ 2,352 $ 2,721
========= ========= ========= =========
Radio broadcast cash flow as a
percentage of radio segment
revenue 31.4% 33.2% 24.1% 26.4%
========= ========= ========= =========
Radio segment revenue $ 5,430 $ 5,566 $ 9,750 $ 10,299
========= ========= ========= =========
The following table provides television net revenue comparisons in each of
the periods presented:
Three months ended Six months ended
June 30, % June 30, %
------------------- ------ ------------------- ------
2013 2012 Change 2013 2012 Change
--------- --------- ------ --------- --------- ------
Core advertising
(local and
national) $ 26,920 $ 25,943 4% $ 50,338 $ 48,157 5%
Political 242 943 (74%) 242 1,462 (83%)
Internet (1) 1,175 1,298 (9%) 2,241 2,580 (13%)
Retransmission 6,623 6,269 6% 13,146 9,846 34%
Trade, barter and
other 1,747 2,325 (25%) 3,300 3,892 (15%)
--------- --------- ------ --------- --------- ------
Television segment
net revenue $ 36,707 $ 36,778 (0%) $ 69,267 $ 65,937 5%
========= ========= ====== ========= ========= ======
Television segment
net revenue,
excluding
political $ 36,465 $ 35,835 2% $ 69,025 $ 64,475 7%
(1) Excludes multiplatform internet related revenue
The following table provides radio net revenue comparisons in each of the
periods presented:
Three months ended Six months ended
June 30, % June 30, %
------------------- ------ ----------------- ------
2013 2012 Change 2013 2012 Change
--------- --------- ------ -------- -------- ------
Core advertising
(local and
national) $ 5,154 $ 5,284 (2%) $ 9,286 $ 9,742 (5%)
Political 69 18 283% 81 58 40%
Trade, barter and
other 207 264 (22%) 383 499 (23%)
--------- --------- ------ -------- -------- ------
Radio segment net
revenue $ 5,430 $ 5,566 (2%) $ 9,750 $ 10,299 (5%)
========= ========= ====== ======== ======== ======
Radio segment net
revenue, excluding
political $ 5,361 $ 5,548 (3%) $ 9,669 $ 10,241 (6%)
The following table provides a reconciliation of net income (loss) (GAAP) to
adjusted net income, excluding the after-tax transaction-related expenses
(non-GAAP) in each of the periods presented:
Three months ended Six months ended
June 30, June 30,
-------------------- ------------------
2013 2012 2013 2012
--------- --------- -------- --------
Net income (loss) $ 438 $ 4,282 $ (331) $ 2,418
Adjustments:
Transaction-related expenses 3,856 - 5,089 -
Effect of income taxes (1,538) - (2,021) -
--------- --------- -------- --------
Adjusted net income, excluding the
after-tax transaction-related
expenses $ 2,756 $ 4,282 $ 2,737 $ 2,418
========= ========= ======== ========
Adjusted net income per share
assuming dilution, excluding the
after-tax transaction-related
expenses $ 0.31 $ 0.48 $ 0.31 $ 0.27
========= ========= ======== ========
Weighted average shares outstanding
assuming dilution 8,955 8,928 8,829 8,936
========= ========= ======== ========
Contacts: Addo Communications 310-829-5400
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