Media General Reports Fourth-Quarter 2012 Results

Media General Reports Fourth-Quarter 2012 Results

-- Revenues of $108.7 million increased 40%

-- Operating income of $42.3 million increased more than 2.5 times from prior year

-- Net income was $17.6 million, or 62 cents per share

-- Broadcast Cash Flow totaled $50.4 million

RICHMOND, Va., Jan. 31, 2013 /PRNewswire/ -- Media General, Inc. (NYSE: MEG), a broadcast television and digital media company, today reported fourth-quarter 2012 operating income of $42.3 million, more than 2.5 times greater than fourth-quarter 2011 operating income of $16.3 million. Net income in the fourth quarter was $17.6 million, or 62 cents per share, compared with a net loss of $3.3 million, or 15 cents per share, in the prior year.

George L. Mahoney, president and chief executive officer of Media General, said, "Media General had an exceptional fourth quarter, marked by 40% revenue growth. Record Political advertising was $30 million. Core Local and National advertising revenues, excluding Political, increased 4%. Media General was particularly well positioned to maximize Political advertising opportunities, with six of our stations located in four of the key battleground states. Broadcast cash flow in the fourth quarter was $50.4 million, with a margin of 46%," said Mr. Mahoney.

Starting with the full-year 2013, Media General's fiscal year will be a conventional calendar year (Jan. 1 - Dec. 31). Previously, the company's fiscal year ended on the last Sunday in December, a newspaper industry practice. Fiscal year 2012 began on December 26, 2011 and ended on December 31, 2012. Fiscal year 2011 began on December 27, 2010 and ended on December 25, 2011.

Total revenues in the fourth quarter of 2012 were $108.7 million compared with $77.9 million in the prior year. Local gross time sales increased 5.3% to $50.7 million. National gross time sales grew 1.4% to $25.2 million. The largest advertising category, automotive, increased 21%. Other key categories with strong growth in the quarter included entertainment, home improvement and furniture.

Cable and satellite retransmission fees rose 84.3% to $9.9 million, as a result of contract renewals in late 2011 that included higher rates. Digital revenues increased 18.8% to $2.7 million, driven primarily by Local advertising, which grew 16%.

Higher station operating costs in the fourth quarter reflected an increase in commissions from the strong revenue performance, higher NBC affiliate fees, a five-day furlough repayment in December 2012, and prior-year savings of nearly $2 million from a companywide furlough program.

Corporate expense of $101,000 in the fourth quarter compared with $9.6 million last year, and included two large non-recurring gains in the current quarter. The gains included a non-cash curtailment of more than $2 million resulting from former newspaper employees leaving the company's post-retirement plans, and a $5 million non-cash gain resulting from outsourcing disability coverage for substantially all Medicare eligible participants to a third party.

Total interest expense in the fourth quarter was $21 million, compared with $14.6 million last year. In the current quarter, cash interest paid was $16.7 million, non-cash interest expense was $2.6 million, and accrued but not paid cash interest was $1.7 million.

Noncash tax expense was $3.4 million in the fourth quarter, compared with $6.2 million in the prior year. The lower tax expense was primarily due to the absence of an intraperiod tax allocation made between continuing operations and Other Comprehensive Income that was recorded in the fourth quarter of last year.

EBITDA from continuing operations (income before interest, debt modification and extinguishment costs, taxes, and depreciation and amortization) was $48.1 million, compared with $23.8 million in the 2011 period.

Media General provides the non-GAAP financial metrics: Broadcast cash flow, EBITDA from continuing operations, After-tax cash flow from continuing operations, and Free cash flow. The company believes these metrics are alternative measures used in peer comparison and by lenders, investors, financial analysts and rating agencies 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.

Conference Call and Webcast

The company will hold a conference call with financial analysts today at 2:30 p.m. ET. To dial in to the call, listeners may call 866-831-6234 about 10 minutes prior to the 2:30 p.m. start. The participant passcode is "Media General."

Listeners may also access a 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 3:30 p.m. today. A telephone replay will also be available, beginning at 1:00 p.m. on February 1, 2013, and ending at 11:59 p.m. on February 8, 2013, by dialing 888-286-8010 or 617-801-6888 and using the passcode 57846918.

2012 Financial Statements

Media General will issue its 2012 audited financial statements, including footnotes, on its website www.mediageneral.com, following the close of the stock market today. A link to the statements will be posted prominently on the website's home page.

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 website www.mediageneral.com or by contacting Lou Anne J. Nabhan, Vice President-Corporate Communications, at (804) 887-5120 or lnabhan@mediageneral.com.

Media General, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS

Fourteen Weeks Thirteen Weeks Fifty-Three Weeks Fifty-Two Weeks
Ending Ending Ending Ending
------ ------ ------ ------


December 31, December 25, December 31, December 25,
(Unaudited, in thousands except per share amounts) 2012 2011 2012 2011
------------------------------------------------- ---- ---- ---- ----

Station revenue (less agency commissions) $108,658 $77,881 $359,722 $280,611

Operating costs:
Station production expenses 33,637 25,483 125,996 111,586
Station selling, general, and
administrative expenses 24,762 19,618 88,235 80,472
Corporate and other expenses 101 9,581 31,705 33,651
Depreciation and software
amortization 5,298 5,630 22,422 23,029
Amortization of intangible assets 441 1,313 2,637 5,253
Loss (gain) related to fixed assets,
net 2,094 (23) 2,062 213
Total operating costs 66,333 61,602 273,057 254,204
--------------------- ------ ------ ------- -------

Operating income 42,325 16,279 86,665 26,407
---------------- ------ ------ ------ ------

Other income (expense):
Interest expense (10,155) (14,616) (51,566) (64,403)
Interest expense - related party (10,851) --- (26,468) ---
Debt modification and extinguishment
costs --- --- (35,415) ---
Other, net 6 593 458 1,281
Total other expense (21,000) (14,023) (112,991) (63,122)
------------------- ------- ------- -------- -------

Income (loss) from continuing operations before income taxes 21,325 2,256 (26,326) (36,715)

Income tax expense 3,408 6,217 13,631 12,218
------------------ ----- ----- ------ ------

Income (loss) from continuing operations 17,917 (3,961) (39,957) (48,933)
Discontinued operations:
Income (loss) from discontinued
operations (net of tax) (682) 657 (11,270) (25,389)
Loss related to divestiture of
discontinued operations (net of tax) 401 --- (142,190) ---
Net income (loss) $17,636 $(3,304) $(193,417) $(74,322)
================ ======= ======= ========= ========

Net income (loss) per common share - basic and diluted (1):
Income (loss) from continuing
operations $0.63 $(0.18) $(1.68) $(2.18)
Discontinued operations (0.01) 0.03 (6.47) (1.13)
Net income (loss) per common share - basic and diluted $0.62 $(0.15) $(8.15) $(3.31)
====================================================== ===== ====== ====== ======

Weighted-average common shares outstanding:
Basic and diluted 27,266 22,505 23,744 22,478


(1) For earnings per share purposes, shares under the Performance Accelerated Restricted Stock (PARS) and Deferred Stock
Units (DSU) plans are considered to participate equally with common shareholders in the Company's earnings. For the
fourteen weeks ending December 31, 2012, this reduced both the income from continuing operations per share and the net
income per share by $0.03.




Media General, Inc.
CONSOLIDATED BALANCE SHEETS

December 31, December 25,
(Unaudited, in thousands) 2012 2011
------------------------ ---- ----

ASSETS

Current assets:
Cash and cash
equivalents $36,802 $23,108
Accounts
receivable -
net 58,486 58,587
Other 18,493 17,424
Assets of
discontinued
operations 670 331,784
Total current assets 114,451 430,903
------- -------

Other assets 45,462 28,277

Property, plant and equipment - net 166,105 176,821

Goodwill and other intangibles - net 447,403 450,040
Total assets $773,421 $1,086,041
============ ======== ==========

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities:
Accounts
payable $11,669 $16,527
Accrued
expenses and
other
liabilities 64,362 46,472
Liabilities
of
discontinued
operations 467 38,716
Total current liabilities 76,498 101,715
------ -------

Long-term debt 295,721 658,199

Long-term debt - related party 257,466 -

Retirement, postretirement, and postemployment
plans 242,309 223,132

Deferred income taxes 58,865 45,954

Other liabilities and deferred credits 18,786 23,088

Stockholders' equity (deficit) (176,224) 33,953
Total liabilities and stockholders' equity
(deficit) $773,421 $1,086,041
========================================== ======== ==========



SUPPLEMENTAL INFORMATION

Media General, Inc.
Selected Revenue Categories

Fourteen Weeks Thirteen Weeks Fifty-Three Weeks Fifty-Two Weeks
Ending Ending Ending Ending
------ ------ ------ ------
December 31, December 25, December 31, December 25,
(Unaudited, in thousands) 2012 2011 % Change 2012 2011 % Change
------------------------ ---- ---- -------- ---- ---- --------
Local (gross) $50,656 $48,112 5.3 % $187,346 $176,652 6.1 %
National (gross) 25,195 24,848 1.4 % 94,504 88,634 6.6 %
Political 30,474 3,607 --- 63,698 5,714 ---
Cable/Satellite (retransmission) fees 9,944 5,396 84.3 % 37,662 21,367 76.3 %
Digital (local website revenues) 2,721 2,290 18.8 % 9,899 8,361 18.4 %





Broadcast Cash Flow

Fourteen Weeks Ending Thirteen Weeks Ending Fifty-Three Weeks Ending Fifty-Two Weeks Ending
--------------------- --------------------- ------------------------ ----------------------
December 31, December 25, December 31, December 25,
(Unaudited, in thousands) 2012 2011 2012 2011
------------------------ ---- ---- ---- ----

Operating income $42,325 $16,279 $86,665 $26,407
Add:
Corporate and other expenses 101 9,581 31,705 33,651
Depreciation and software amortization 5,298 5,630 22,422 23,029
Amortization of intangible assets 441 1,313 2,637 5,253
Loss (gain) related to fixed assets, net 2,094 (23) 2,062 213
Amortization of broadcast film rights 2,984 2,566 10,738 16,298
Less:
Payments for broadcast film rights 2,839 2,521 10,493 15,925
---------------------------------- ----- ----- ------ ------
Broadcast cash flow $50,404 $32,825 $145,736 $88,926
=================== ======= ======= ======== =======




SUPPLEMENTAL INFORMATION

Media General, Inc.
EBITDA, After-tax Cash Flow, and Free Cash Flow

Fourteen Weeks Thirteen Weeks Fifty-Three Weeks Fifty-Two Weeks
Ending Ending Ending Ending
------ ------ ------ ------


December 31, December 25, December 31, December 25,
(Unaudited, in thousands) 2012 2011 2012 2011
------------------------ ---- ---- ---- ----

Income (loss) from continuing operations $17,917 $(3,961) $(39,957) $(48,933)
Interest 21,006 14,616 78,034 64,403
Debt modification and extinguishment costs - - 35,415 -
Depreciation and software amortization 5,298 5,630 22,422 23,029
Amortization of intangible assets 441 1,313 2,637 5,253
Taxes 3,408 6,217 13,631 12,218


EBITDA from continuing operations $48,070 $23,815 $112,182 $55,970
================================= ======= ======= ======== =======


Income (loss) from continuing operations $17,917 $(3,961) $(39,957) $(48,933)
Taxes * 3,408 6,217 13,631 12,218
Depreciation and software amortization 5,298 5,630 22,422 23,029
Amortization of intangible assets 441 1,313 2,637 5,253

After-tax cash flow from continuing operations $27,064 $9,199 $(1,267) $(8,433)
============================================== ======= ====== ======= =======

After-tax cash flow from continuing operations $27,064 $9,199 $(1,267) $(8,433)
Capital expenditures 10,623 3,372 17,886 19,053

Free cash flow $16,441 $5,827 $(19,153) $(27,486)
============== ======= ====== ======== ========
* The Company's income taxes are non-cash in nature and have been added back accordingly.
See 2011 Form 10-K for further discussion.



Corporate and other expenses

Fourteen Weeks Ending Thirteen Weeks Ending Fifty-Three Weeks Ending Fifty-Two Weeks Ending
--------------------- --------------------- ------------------------ ----------------------


December 31, December 25, December 31, December 25,
(Unaudited, in thousands) 2012 2011 2012 2011
------------------------ ---- ---- ---- ----
Corporate (excluding depreciation and amortization) $6,112 $7,015 $28,211 $29,909
Corporate severance (51) 176 3,394 254
Incentive compensation (including stations) 1,374 1,776 5,723 1,611
Postretirement benefits** (2,337) 44 (2,222) 173
Postemployment benefits** (4,975) (115) (4,828) 35
Other operating expenses (22) 685 1,427 1,669
Corporate and other expenses $101 $9,581 $31,705 $33,651
==== ====== ======= =======

** In the fourth quarter of 2012, the Company recorded gains related to postretirement and
postemployment benefits. The postretirement gain resulted from former newspaper employees leaving
certain of the Company's postretirement plans. The postemployment gain is due to outsourcing
coverage for substantially all Medicare eligible participants to a third-party.

SOURCE Media General, Inc.

Media General, Inc.

Web Site: http://www.mediageneral.com


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