TEGNA Provides Full-Year 2021 Guidance, Announces Record Preliminary Fourth Quarter and Full-Year 2020 Results and Renews $300 Million Share Repurchase Program
Record political revenue, continued growth in subscription business and operating efficiencies accelerate positive momentum heading into 2021
Company to exceed full-year 2020 guidance provided prior to the COVID-19 pandemic for all key financial metrics, despite the challenging external market environment
TYSONS, Va.--(BUSINESS WIRE)--Jan. 6, 2021--
PRELIMINARY FOURTH QUARTER HIGHLIGHTS:
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Record revenue is expected to be in the range of
$932-$937 million , up 34 to 35 percent year-over-year, driven by record political advertising and continued growth in subscription revenue.
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TEGNA generated record political advertising revenue of approximately$264 million in the fourth quarter, including$50 million of revenue generated from theGeorgia Senate runoff elections.
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GAAP Net Income is expected to be in the range of
$246-$251 million , up 193 to 199 percent year-over-year. Record Adjusted EBITDA is expected to be in the range of$424-$429 million . This represents an increase of 85 to 88 percent in Adjusted EBITDA compared with fourth quarter 2019.
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During the quarter,
TEGNA repriced approximately 35 percent of its subscribers at leading Big Four affiliate rates. Subscriber trends continue to improve, now with four consecutive months of sequential year-over-year improvement.
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TEGNA renewed its comprehensive, multi-year affiliation agreement withNBC , the Company’s largest network partner, covering 20TEGNA markets nationwide including 10 of the top 25 markets forNBC . This agreement, combined with our subscription revenue renewals, provides clear visibility into the growth of our durable, high-margin subscription revenue business.
PRELIMINARY FULL-YEAR 2020 HIGHLIGHTS:
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Revenue will be in the range of
$2,932-$2,937 million , up 27 to 28 percent year-over-year, driven primarily by growth in political and subscription revenues, as well as contributions from stations acquired in 2019.
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GAAP Net Income is expected to be in the range of
$484-$490 million , up 69 to 71 percent year-over-year. Adjusted EBITDA will be in the range of$1,020-$1,025 million , up 44 to 45 percent year-over-year driven by approximately$445 million of high-margin political advertising and growth in net subscription profits, despite advertising and marketing services challenges as a result of the COVID-19 pandemic.
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Free cash flow as a percentage of revenue will be above or at the high end of the previous guidance of 20 to 21 percent provided on
November 9, 2020 , for the two-year period endedDecember 31, 2020 .
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Net leverage is expected to end the year at or below 4.0x, better than the year-end 2020 guidance of 4.1x provided when
TEGNA completed its 2019 acquisitions, and despite the impacts of the pandemic.
CEO COMMENT:
“2020 was an extraordinary year of growth and innovation at
“Another driver of our results is the revenue achievement and demand for TEGNA’s over-the-top advertising business, Premion, which is expected to finish the year with revenues of more than
“Our full-year 2021 guidance metrics include our projection of year-over-year subscription revenue growth of mid-to-high-teens percent, reflecting leading retransmission rates for our portfolio of Big Four affiliates. Furthermore, our end of the year retransmission negotiations along with the new affiliation agreement with
“Our underlying Advertising and Marketing Services revenue trends continued to improve in the fourth quarter, and while it is early, that trend is continuing nicely in the first quarter of 2021, with automotive continuing to show improvement in January.
“The combination of our firepower and the strength of our balance sheet affords us tremendous financial flexibility into 2021 and beyond. Our prudent capital allocation decisions have led us to this solid positioning despite the continued challenging macroeconomic backdrop due to the pandemic. Thanks to the strength of our financial position, we are able to reintroduce buybacks as an additional opportunistic tool to return value to shareholders if we determine it is the most appropriate use of capital in the future. As we look to the year ahead, we are confident that the strength of our operations, cash flow and balance sheet position
FULL-YEAR 2021 OUTLOOK:
TEGNA’s full-year 2021 financial guidance metrics reflect management’s expectations for continued strong performance resulting from operational excellence across our portfolio of strong stations, including our focus on best-in-class journalism.
2021 guidance for subscription revenue growth reflects the culmination of successful retransmission negotiations covering roughly 35 percent of our subscribers. TEGNA’s net subscription profits are expected to grow mid-to-high twenties percent year over year.
Full-year Adjusted EBITDA and free cash flow will continue to reflect year-over-year expense improvements resulting from significant cost reduction initiatives that have been underway for the past 24 months. Excluding programming and Premion costs, all other operating expenses in 2021 will be flat or slightly lower than 2020. As a reminder, in early 2020, we targeted reducing our annual run-rate expenses by
Please see below for our full-year 2021 key guidance metrics.
Full-Year 2021 Key Guidance Metrics |
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Subscription Revenue Growth |
+Mid-to-High Teens percent |
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Corporate Expenses |
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Depreciation |
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Amortization |
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Interest Expense |
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Capital Expenditures |
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Effective Tax Rate |
24.0 - 25.0% |
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Net Leverage Ratio |
Mid 3x |
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Free Cash Flow as a % of est. 2020/2021 Revenue |
20.5 - 21.5% |
RENEWAL OF SHARE REPURCHASE PROGRAM
In
The
Under the approved authorization, the Company may purchase up to
USE OF NON-GAAP INFORMATION
We use non-GAAP financial 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 our Board of Directors use the non-GAAP financial measures for the purpose of evaluating company performance. Furthermore, the
“Adjusted EBITDA,” a non-GAAP measure, is defined as net income attributable to the Company before (1) net (income) loss attributable to redeemable noncontrolling interest, (2) income taxes, (3) interest expense, (4) equity (loss) income in unconsolidated investments, net, (5) other non-operating items, net, (6) workforce restructuring expense, (7) M&A due diligence costs, (8) acquisition-related costs, (9) advisory fees related to activism defense, (10) spectrum repacking reimbursements and other, net, (11) depreciation and (12) amortization.
Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of the limitations are:
- it does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;
- it does not reflect changes in, or cash requirements for, our working capital needs;
- it does not reflect interest expense, or the cash requirements necessary to service interest or principal payments, on our indebtedness;
- it does not reflect our income tax expense or the cash requirements to pay our taxes; and
- other companies in our industry may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.
All of the data presented above is preliminary and unaudited, based upon our estimates, and subject to further internal review by our management and compilation of actual results. With regards to the 2020 numbers, we have provided estimated ranges for this data primarily because our closing procedures for the quarter ended
As a result of the foregoing considerations and other limitations on non-GAAP measures, investors are cautioned not to place undue reliance on this preliminary estimated financial data.
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 and Quarterly Reports on Form 10-Q. Any forward-looking statements in this press release should be evaluated in light of these important risk factors.
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. The reconciling items presented below represent what is included in the estimated Net income attributable to |
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Quarter ended |
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low end |
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high end |
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Net income attributable to |
$ |
245,692 |
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$ |
251,340 |
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Plus: Net income attributable to redeemable noncontrolling interest |
364 |
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364 |
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Plus: Provision for income taxes |
78,654 |
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80,606 |
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Plus: Interest expense |
49,553 |
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49,553 |
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Less: Equity income in unconsolidated investments, net |
(1,746) |
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(1,746) |
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Plus: Other non-operating items, net |
17,452 |
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14,952 |
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Operating income (GAAP basis) |
389,969 |
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395,069 |
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Plus: Spectrum repacking reimbursements and other, net |
588 |
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588 |
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Adjusted operating income (non-GAAP basis) |
390,557 |
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395,657 |
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Plus: Depreciation |
16,423 |
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16,423 |
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Plus: Amortization of intangible assets |
17,113 |
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17,113 |
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Adjusted EBITDA (non-GAAP basis) |
$ |
424,093 |
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$ |
429,193 |
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Year ended |
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low end |
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high end |
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Net income attributable to |
$ |
484,166 |
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$ |
489,814 |
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Less: Net loss attributable to redeemable noncontrolling interest |
(69) |
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(69) |
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Plus: Provision for income taxes |
148,353 |
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150,305 |
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Plus: Interest expense |
210,286 |
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210,286 |
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Less: Equity income in unconsolidated investments, net |
(10,153) |
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(10,153) |
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Plus: Other non-operating items, net |
34,722 |
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32,222 |
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Operating income (GAAP basis) |
867,305 |
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872,405 |
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Plus: Workforce restructuring expense |
1,021 |
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1,021 |
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Plus: M&A due diligence costs |
4,588 |
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4,588 |
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Plus: Advisory fees related to activism defense |
23,087 |
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23,087 |
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Less: Spectrum repacking reimbursements and other, net |
(9,945) |
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(9,945) |
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Adjusted operating income (non-GAAP basis) |
886,056 |
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891,156 |
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Plus: Depreciation |
66,120 |
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66,120 |
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Plus: Amortization of intangible assets |
67,690 |
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67,690 |
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Adjusted EBITDA (non-GAAP basis) |
$ |
1,019,866 |
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$ |
1,024,966 |
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About
View source version on businesswire.com: https://www.businesswire.com/news/home/20210106005427/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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