Nexstar Broadcasting Group reported record Q2 financial results, with net revenue for the quarter up 2.9% to $70.7 million compared to $68.7 million in Q2 ‘07. Income from operations rose 20.9% to $16.2 million for the quarter, compared with $13.4 million in 2007. Broadcast cash flow increased 6.7% to $28.6 million in the second quarter of 2008 compared with $26.8 million for the same period in 2007. Q2 EBITDA grew 5.9% to $25.0 million up from $23.6 million in the 2007. Free cash flow increased 15.6% to $11.1 million in the quarter ended June 30, 2008, compared with $9.6 million in the comparable period of 2007.
Much of it could be attributed to Nexstar’s “stellar” eMedia business, which CEO Perry Sook unveiled much of in the way of strategy at this year’s TVB. In fact, political, eMedia and retransmission consent revenues for the quarter more than offset the softness in spot revenue and the erosion of network comp.
The Q2 net revenue of $70.7 million included approximately $3.1 million of net political advertising revenue–up from approximately $1.0 million of net political ad revenue in Q2 2007.
This is what Sook said in the conference call: “Our eMedia activities, momentum and results are moving full steam ahead, as strong usage trends, advertiser demand and innovation on the part of our eMedia teams are positioning us well for continued growth.”
They have rolled out new features and functions, including user-contributed video capabilities, auto classifieds a new local search feature, custom microsites and expanded classifieds including jobs, real estates and personals. Sook expects continued quarterly sequential growth in eMedia revenue in Q3 and Q4 with total 2008 eMedia revenue growing 100% from the initial 5.1 million reported in 2007.
Sook added that national political spending is pacing toward record levels for this election year. “Given our geography in the national battleground states of Pennsylvania, Indiana and Missouri, coupled with several hotly-contested statewide races in these states and others, suffice it to say we are really looking forward to the next 13 weeks from today.”
One of Sook’s best-won crusades, retransmission revenue streams, continues to grow at Nexstar. “We expect substantial increases in our per-subscriber revenue in this renewal cycle, which runs through the end of 2009. We’re close to finalizing a significant retransmission agreement renewal that will recognize the evolving importance of locally-produced video content while raising the bar for retransmission consent consideration on a per-subscriber basis. We are confident this trend will continue through our renewal cycle, thus generating high-margin revenue growth from this channel in the remainder of this year, 2009 and 2010.”
Q2 retransmission consent revenue grew 14% from year-ago levels to $4.8 million while eMedia revenue rose nearly three-fold to $2.6 million. For the full year, these digital high-margin revenue streams are expected to account for approximately $30.0 million of total revenue.
