quarterly report

Sinclair 1Q Revenue Falls 18% to $131M

Local advertising revenue drops 18%, national plunges 31%, with automotive down 46% and services coming in 19% lower. Retrans money was up, however, by $1.5 million.
By
TVNewsCheck,

Sinclair Broadcast Group today reported financial results for the three months ended March 31 and its net broadcast revenues from continuing operations were $131.3 million, a decrease of 18.4% versus the prior year period result of $160.9 million.

The company had an operating loss of $106.7 million, as compared to operating income of $46.2 million in the prior year period.

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Included in the first quarter 2009 results was a $130.1 million ($100.8 million net of taxes) non-cash impairment of goodwill and other intangible assets charge. The company had a net loss attributable to Sinclair Broadcast Group of $85.7 million in the three-month period versus net income of $15.0 million in the prior year period.

Political revenues were $300,000 million in the first quarter 2009 versus $3.2 million in the first quarter 2008.

Revenues from retransmission consent agreements were $21.1 million in the first quarter 2009 as compared to $19.6 million in the first quarter 2008.

Local advertising revenues were down 18.3% in the first quarter 2009 while national advertising revenues were down 31.3% versus the first quarter 2008. Excluding political revenues, local advertising revenues were down 17.3% and national advertising revenues were down 28.8% in the first quarter 2009.

Advertising spending categories that were down the most were automotive, services, movies, fast food and pharmacy. Services, now Sinclair's largest category representing 16.7% of time sales, was down 19.2% while automotive, its second largest category representing 13.7% of time sales, was down 46.3% in the quarter.

Local advertising revenues, excluding political revenues, represented 70.6% of advertising revenues in the first quarter 2009.

Time sales on the company's Fox, ABC, My Network TV, CW, CBS and NBC stations were down 25.1%, 24.8%, 15.9%, 21.7%, 12.3% and 18.4% in the first quarter 2009, respectively.

With all but two markets reporting, Sinclair's stations, on average, grew their total market share including political revenues, increasing from 18.4% to 18.8%.

During the quarter, the company received digital equipment at seven stations in exchange for comparable analog equipment as a result of vacating certain analog spectrum to be used for public safety. As a result, Sinclair recorded a $1.2 million non-cash gain on the equipment exchange.

Commenting on the quarter, David Smith, president-CEO of Sinclair, stated, "While first quarter net broadcast revenues exceeded our guidance, we are still not seeing any meaningful improvements in the economy or increased visibility on the revenue side in the second quarter. As such, our expectation is for net broadcast revenues in the second quarter to finish down by high teen percents, similar to our first quarter results. Additionally, it is unclear how Chrysler's bankruptcy and a potential filing by General Motors will affect our business in 2009. Nonetheless, we continue to be disciplined on the cost side and look for additional ways to offset the declines in revenues. First quarter television station operating expenses, which were down 10.4%, was largely due to the cost cutting measures we implemented in the fourth quarter of 2008."

Read the company's release here.

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