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FOR IMMEDIATE RELEASE
Wednesday, July 21, 2010
                                                                                                                                       
Media General Reports Second-Quarter 2010 Results, Provides Outlook

RICHMOND, Va. – Media General, Inc. (NYSE: MEG) today reported operating income of $16.3 million in the second quarter of 2010, a 19 percent increase from the second quarter of 2009.  The increase mostly reflected the benefit of Political advertising at the company’s television stations.  A net loss of $4.3 million, or 19 cents per share, reflected higher interest expense related to the company’s debt restructuring earlier this year as well as non-cash tax expense.  In the 2009 second quarter, net income was $20.6 million, or 90 cents per share, including a tax benefit of $11 million and a gain of $7.1 million from the sale of a television station in Jacksonville, Fla.

Total revenues in the current quarter increased approximately 2 percent to $166.2 million.  Total operating expenses were held even with the prior year. 

“Media General’s second-quarter operating results included $7 million in Political revenues and our television stations also benefited from increased automotive spending, which was up nearly 42 percent compared with last year,” said Marshall N. Morton, president and chief executive officer.  Total Broadcast revenues in the second quarter increased 13 percent from last year. 

“We were pleased to deliver continued moderation in the rate of decline in Publishing revenues, down 7 percent compared with last year.  Year-over-year declines in Classified revenues moderated to the mid-to-low single digits in all markets except Florida.  Our North Carolina market produced a nearly 3 percent increase in Classified advertising in the quarter.  

“We continue to manage expenses aggressively.  In the second quarter, our expense performance was somewhat better than expectations, due to lower health care expenses and to intentional delays in hiring for certain open positions,” said Mr. Morton.  “Lower newsprint expense, which decreased nearly 30 percent in the quarter, also contributed. 

“All of our properties are aggressively executing on our Digital Media strategy.  Total Digital Media revenues, including our Advertising Services businesses, increased 8 percent compared with last year.  Our Web sites alone generated a 16 percent increase in revenues.  Local online revenues continued their robust growth and increased 26 percent in the second quarter, a direct result of sales pressure in our markets.  Online Classified revenues grew for the second quarter in a row and increased nearly 16 percent.  This resulted from our sales initiatives related to our Internet partnerships with Yahoo! and Zillow.  We also focused our online content on relevant news and information, and unique visitors increased 19 percent in the second quarter.”   

Market Segments
Virginia/Tennessee segment profit in the second quarter was $10.5 million, compared to $11.3 million in the 2009 second quarter.  Revenues declined 3 percent from last year, while expenses decreased 2 percent.  Broadcast revenues were about even with the prior year, despite limited Political advertising at the market’s two television stations in 2010 as the Virginia gubernatorial election was held in 2009.  Publishing revenues decreased 4.5 percent.  Higher third-party printing and distribution revenues partially offset declines in Local, National and Classified advertising.  Local revenues decreased 1 percent, and Classified revenues were down 4 percent.  National revenues declined 19 percent, due primarily to lower spending by telecommunications advertisers in Richmond.  Digital revenues rose 15 percent, reflecting increases in Local and Classified online advertising.

Florida segment profit was $1.5 million, compared with $193,000 a year ago.  Expenses decreased 4 percent, offsetting a 1 percent decline in total revenues.  Broadcast revenues increased 17 percent, due to strong Political advertising on WFLA, but were more than offset by lower Publishing revenues.  Political revenues were $1.6 million compared with essentially none last year, reflecting gubernatorial, U.S. Senate and U.S. House races.  Classified and Local revenues decreased 22 percent and 3 percent, respectively.  National revenues increased 11 percent, mostly the result of advertising related to the Gulf of Mexico oil spill.  Digital revenues increased 25 percent, due to solid growth in Local, National and Classified online advertising.

Mid-South segment profit was $9.6 million, compared with $6 million in the prior year.  Total revenues increased 12 percent, and Broadcast revenues increased 17 percent.  The Mid-South Market includes 11 television stations and only three community newspapers.  Political revenues were $4.4 million, compared with $311,000 in 2009 and included robust spending for primary elections in South Carolina and Alabama.  Local revenues increased 4.5 percent, while National and Classified revenues decreased 3 percent and 5 percent, respectively. Digital media revenues rose 11 percent.

North Carolina segment profit was $1.5 million, which was up slightly from last year.  Revenues decreased 2 percent, and expenses were down 4 percent from last year.  Broadcast revenues increased 10 percent and included Political revenues of approximately $100,000 at the market’s two television stations.  The Raleigh station also benefited from significantly increased National revenues.  Publishing revenues in North Carolina declined 8 percent in the second quarter.  National and Classified revenues increased 2 percent and 3 percent, respectively, while Local revenues declined 6 percent.  Digital media revenues increased 14 percent.

Ohio/Rhode Island segment profit was $3.7 million, compared with $2.6 million last year, due to strong Political and National revenues from the segment’s two television stations.  Total revenues increased 10 percent.  Political revenues were $708,000 compared with $119,000 in 2009.  National advertising increased 20 percent, due to increased automotive, entertainment and health care advertising.  Local revenues declined 2 percent.  Digital media revenues rose 9.5 percent.

Advertising Services and Other segment profit was $884,000, a 14 percent increase from last year.  DealTaker.com, the company’s shopping and coupon Web site, drove the improvement.  Revenues rose 11 percent and profit increased 7 percent at DealTaker.com. 

Other Results
Interest expense was $17.1 million in the second quarter, compared with $11.3 million last year, due to the company’s new financing structure.  Debt at the end of second quarter of 2010 was $673 million, compared with $693 million at the end of the first quarter of 2010 and $712 million at the beginning of the year.  The reduction in the second quarter reflects a tax refund received in April of approximately $26 million that was used to reduce debt.  

Acquisition intangibles amortization decreased 12 percent, reflecting the impact of the prior-year’s impairment write-downs of network affiliation agreements.  Corporate expense increased 17 percent, reflecting the absence in 2010 of employee furlough days and certain other cost containment measures.

The previously estimated second-quarter non-cash tax expense of $7.5 million was partially offset by a $1 million non-cash favorable adjustment related to a court ruling received in connection with a state income tax issue as well as a $2.8 million non-cash tax benefit resulting from the intraperiod allocation of tax to other comprehensive income items.  Thus, income tax expense in the second quarter was $3.7 million.  Last year’s second quarter showed an income tax benefit of $11 million on continuing operations, including $3.6 million from a favorable determination concerning a state tax issue and $7.5 million of tax benefit attributable to first-half results.

EBITDA [income (loss) from continuing operations before interest, taxes, depreciation and amortization] was $30.1 million in the second quarter of 2010, compared with $28.7 million in the 2009 period.  After-Tax Cash Flow was $13.1 million, compared with $17.4 million in the prior year’s quarter.  Capital expenditures in the second quarter of 2010 were $6.7 million, compared with $3.8 million in the prior-year period.  Free Cash Flow (After-Tax Cash Flow minus capital expenditures) was $6.4 million, compared with $13.6 million in the prior-year period.

Media General provides the non-GAAP financial metrics EBITDA from continuing operations, After-Tax Cash Flow and Free Cash Flow.  The company believes these metrics are useful in evaluating financial performance and are common alternative measures used by investors, financial analysts and rating agencies.  These groups use EBITDA, along with other measures, to evaluate a company’s ability to service its debt requirements and to estimate the value of the company.  A reconciliation of these metrics to amounts on the GAAP statements has been included in this news release.

Outlook
For the third quarter of 2010, Media General expects total revenues to increase 6-8 percent, compared with 2009.  Broadcast revenues in the third quarter are expected to increase more than 20 percent, mostly reflecting significant Political revenues.  Publishing revenue decreases compared with prior year are expected to continue to moderate and the third-quarter decline is expected to be 3-5 percent.  Total operating costs are expected to increase 7-8 percent, reflecting the absence in 2010 of furlough days and certain cost containment measures in 2010 as well as increased support of new revenue initiatives.  The company continues to expect free cash flow for the full year 2010 of $58-60 million, including the $26 million tax refund.

Conference Call, Webcast and Financial Statements
The company will hold a conference call with financial analysts today at 11 a.m. ET.  The conference call will be available to the media and general public through a limited number of listen-only dial-in conference lines and via simultaneous Webcast.  To dial in to the call, listeners may call 1-800-299-0433 about 10 minutes prior to the 11 a.m. start.  The participant passcode is “Media General.”  Listeners may also access the live Webcast by logging on to www.mediageneral.com and clicking on the “Live Webcast” link on the homepage about 10 minutes in advance.  A replay of the Webcast will be available online at www.mediageneral.com beginning at 1 p.m. today.  A telephone replay is also available, beginning at 2 p.m. today and ending at 2 p.m. on July 28, 2010, by dialing 888-286-8010 or 617-801-6888, and using the passcode 31552116.

Forward-Looking Statements
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 multiple media platforms, serving consumers and advertisers in strong local markets, primarily in the Southeastern United States.  Media General’s operations are organized in five geographic market segments and a sixth segment that includes the company’s interactive advertising services and certain other operations.  The company’s operations include 18 network-affiliated television stations and their associated Web sites, three metropolitan and 20 community newspapers and their associated Web sites, and more than 200 specialty publications that include weekly newspapers and niche publications targeted to various demographic, geographic and topical communities of interest.  Many of the company’s specialty publications have associated Web sites.  Media General additionally operates three interactive advertising services companies:  Blockdot, which specializes in interactive entertainment and advergaming technologies; DealTaker.com, a coupon and shopping Web site; and NetInformer, a leading provider of wireless media and mobile marketing services.

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Investor Contact:
Lou Anne Nabhan
(804) 649-6103

Media Contact:
Ray Kozakewicz
(804) 649-6748