TEGNA Announces Strong Preliminary Third Quarter 2020 Results, Increases Subscription Revenue Outlook
Preliminary results reflect the ongoing execution of TEGNA’s long-term strategy, the strength of the Company’s portfolio of Big Four affiliates and a record-breaking year for political advertising revenue
TYSONS, Va.--(BUSINESS WIRE)--Oct. 15, 2020--
Preliminary Third Quarter 2020 Highlights:
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Revenue is expected to be
$738 million , up 34 percent1 year-over-year, driven by record 2020 political advertising revenue, continued strength of subscription revenue, and stronger than expected advertising and marketing services revenue despite the impact of COVID-19 on the advertising market this year, as well as the impact of acquisitions. Excluding political advertising, revenue is expected to be up 14 percent compared to last year.
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GAAP net income more than doubled1 compared to the third quarter of 2019 and is expected to be
$132 million . Adjusted EBITDA is expected to be$259 million , a 65 percent1 increase compared to the same period in 2019. Both increases were driven by strong revenues, the impact of acquisitions and the Company’s continued prudent expense management.
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Free cash flow is expected to be
$153 million . Cash generation was driven by stronger than expected business performance. Strong free cash flow has facilitated accelerated debt pay down, and net leverage is now expected to be 4.2x or lower by the end of the year, an improvement from prior guidance.
Update on Full Year Subscription Revenue Expectations:
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Full year subscription revenue growth is now expected to be up in the high-twenties percentage-wise1 compared to 2019, an improvement from our prior outlook of up mid-twenties reaffirmed on
August 10, 2020 .
1 Computed using the reported amount in the prior year period. The reported amount excludes the financial results of the Dispatch and
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FORWARD-LOOKING STATEMENTS
Certain statements in this communication may constitute “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Any forward-looking statements contained herein are subject to a number of risks, trends and uncertainties that could cause actual results or company actions to differ materially from what is expressed or implied by these statements, including risks relating to the coronavirus (COVID-19) pandemic and its effect on our revenues, particularly our non-political advertising revenues. Potential regulatory actions, changes in consumer behaviors and impacts on and modifications to TEGNA’s operations and business relating thereto and TEGNA’s ability to execute on its standalone plan can also cause actual results to differ materially. Other economic, competitive, governmental, technological and other factors and risks that may affect TEGNA’s operations or financial results are discussed in our Annual Report on Form 10-K for the fiscal year ended
Conference Call Information
Use of Non-GAAP Information
The company uses non-GAAP financial performance measures to supplement the financial information presented on a GAAP basis. These non-GAAP financial measures should not be considered in isolation from, or as a substitute for, the related GAAP measures, nor should they be considered superior to the related GAAP measures, and should be read together with financial information presented on a GAAP basis. Also, our non-GAAP measures may not be comparable to similarly titled measures of other companies.
Management and the company’s Board of Directors use the non-GAAP financial measures for purposes of evaluating company performance. Furthermore, the
The company also discusses Adjusted EBITDA, a non-GAAP financial performance measure that it believes offers a useful view of the overall operation of its businesses. The company defines Adjusted EBITDA as net income attributable to
This announcement of preliminary results also discusses free cash flow, a non-GAAP financial performance measure that the Board of Directors uses to review the performance of the business. The most directly comparable GAAP financial measure to free cash flow is Net income attributable to
PRELIMINARY NON-GAAP FINANCIAL INFORMATION
Unaudited, in thousands of dollars
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Table No. 1 |
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Reconciliations of Adjusted EBITDA to net income presented in accordance with GAAP on the company's Consolidated Statements of Income are presented below: |
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Quarter ended |
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2020 |
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2019 |
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Net income attributable to |
$ |
132,219 |
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$ |
48,346 |
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Plus: Net income attributable to redeemable noncontrolling interest |
51 |
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— |
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Plus: Provision for income taxes |
41,967 |
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5,079 |
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Plus: Interest expense |
51,896 |
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52,454 |
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Plus: Equity loss in unconsolidated investments, net |
2,529 |
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491 |
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Less: Other non-operating items, net |
(961) |
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463 |
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Operating income (GAAP basis) |
227,701 |
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106,833 |
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Plus: Workforce restructuring expense |
1,021 |
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— |
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Plus: Acquisition-related costs |
— |
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19,973 |
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Less: Spectrum repacking reimbursements and other, net |
(2,902) |
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(80) |
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Adjusted operating income (non-GAAP basis) |
225,820 |
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126,726 |
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Plus: Depreciation |
16,086 |
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15,381 |
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Plus: Amortization of intangible assets |
17,113 |
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15,018 |
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Adjusted EBITDA (non-GAAP basis) |
$ |
259,019 |
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$ |
157,125 |
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PRELIMINARY NON-GAAP FINANCIAL INFORMATION
Unaudited, in thousands of dollars
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Table No. 2 |
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Reconciliations of free cash flow to net income presented in accordance with GAAP on the company's Consolidated Statements of Income are presented below: |
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Quarter ended |
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2020 |
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2019 |
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% Increase
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Net income attributable to |
$ |
132,219 |
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$ |
48,346 |
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*** |
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Plus: Provision for income taxes |
41,967 |
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5,079 |
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*** |
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Plus: Interest expense |
51,896 |
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52,454 |
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(1.1) |
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Plus: Acquisition-related costs |
— |
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19,973 |
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*** |
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Plus: Depreciation |
16,086 |
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15,381 |
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4.6 |
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Plus: Amortization |
17,113 |
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15,018 |
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13.9 |
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Plus: Stock-based compensation |
5,010 |
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4,445 |
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12.7 |
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Plus: Company stock 401(k) contribution |
4,458 |
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3,242 |
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37.5 |
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Plus: Syndicated programming amortization |
17,628 |
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15,516 |
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13.6 |
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Plus: Workforce restructuring expense |
1,021 |
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— |
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*** |
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Plus: Cash dividend from equity investments for return on capital |
2,205 |
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|
751 |
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*** |
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Plus: Equity loss in unconsolidated investments, net |
2,529 |
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|
491 |
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*** |
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Plus: Cash reimbursements from spectrum repacking |
2,902 |
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5,536 |
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(47.6) |
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Plus: Net income attributable to redeemable noncontrolling interest |
51 |
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— |
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*** |
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Less: Other non-operating items, net |
(961) |
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463 |
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*** |
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Less: Income tax payments, net of refunds |
(39,407) |
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(17,672) |
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*** |
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Less: Spectrum repacking reimbursements and other, net |
(2,902) |
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(80) |
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*** |
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Less: Syndicated programming payments |
(17,009) |
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(16,316) |
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4.2 |
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Less: Pension contributions |
(942) |
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(2,460) |
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(61.7) |
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Less: Interest payments |
(74,499) |
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(31,952) |
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*** |
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Less: Purchases of property and equipment |
(6,276) |
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(13,547) |
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(53.7) |
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Free cash flow (non-GAAP basis) |
$ |
153,089 |
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$ |
104,668 |
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46.3 |
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*** Not meaningful |
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About
View source version on businesswire.com: https://www.businesswire.com/news/home/20201015005553/en/
For media inquiries:
Vice President, Corporate Communications
703-873-6366
abentley@TEGNA.com
For investor inquiries:
Head of Investor Relations
703-873-6764
dkuckelman@TEGNA.com
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