IRVING, Texas–(BUSINESS WIRE)–Nexstar Media Group, Inc. (NASDAQ: NXST) today reported financial results for the second quarter ended June 30, 2024 as summarized below. Please visit Nexstar’s website to view the full press release.
STATEMENT FROM PERRY A. SOOK, FOUNDER, CHAIRMAN AND CEO
“Nexstar delivered another period of solid financial results, building on our strong start to the year. Following a first quarter in which Nexstar generated record first-quarter distribution and total net revenue, we did it again, generating our highest-ever second-quarter distribution and total net revenue. During the quarter, we continued executing on our plan at The CW, reducing operating losses by $33 million year-over-year and $83 million year-to-date as our organizational and programming changes are driving improved cash flows and the third consecutive quarter of ratings growth in primetime entertainment programming. Overall, our strong year-to-date operating performance yielded $483 million of Adjusted Free Cash Flow and we returned $358 million, or 74% of Adjusted Free Cash Flow, to shareholders in the form of dividends and share repurchases. Looking ahead, we expect to benefit from anticipated record levels of political spending on broadcast television in the second half of the year.”
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2024 Second Quarter Financial Summary |
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($ in millions) |
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Three Months Ended June 30, |
Six Months Ended June 30, |
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2024 |
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2023 |
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% Change |
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2024 |
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2023 |
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% Change |
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Distribution |
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$734 |
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$696 |
5.5 |
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$1,495 |
$1,424 |
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5.0 |
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Advertising |
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522 |
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511 |
2.2 |
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1,034 |
1,028 |
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0.6 |
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Other |
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13 |
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33 |
(60.6 |
) |
24 |
45 |
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(46.7 |
) |
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Net Revenue |
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$1,269 |
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$1,240 |
2.3 |
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$2,553 |
$2,497 |
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2.2 |
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Net Income |
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$106 |
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$75 |
41.3 |
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$273 |
$163 |
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67.5 |
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% Margin(1) |
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8.4% |
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6.0% |
2.4 |
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10.7% |
6.5% |
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4.2 |
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Adjusted EBITDA(2) |
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$398 |
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$335 |
18.8 |
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$941 |
$831 |
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13.2 |
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% Margin(1) |
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31.4% |
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27.0% |
4.4 |
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36.9% |
33.3% |
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3.6 |
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Adjusted Free Cash Flow(2) |
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$78 |
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$74 |
5.4 |
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$483 |
$451 |
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7.1 |
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| (1) | Net Income margin is Net Income as a percentage of Net Revenue. Adjusted EBITDA margin is Adjusted EBITDA as a percentage of Net Revenue. |
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(2) |
Definitions and disclosures regarding non-GAAP financial information including reconciliations are included at the end of the press release. In the first quarter of 2024, we adjusted our definition of Adjusted EBITDA to add back stock-based compensation expense and restructuring expenses and to subtract out pension credits. We also adjusted our definition of Adjusted Free Cash Flow (formerly referred to as Attributable Free Cash Flow) to subtract out pension credits and payments for capitalized software obligations and to adjust for actual cash contributions from noncontrolling interests in lieu of adjusting for our partners’ share of losses in The CW. The comparative prior year disclosures were also recast to conform with the current presentation. |
Company and Business Highlights
- Successfully expanded NewsNation to a 24/7 cable news network on June 1. According to Nielsen, NewsNation’s total viewership in primetime is up over 200% since its launch in March 2021 (comparing Q2 2024 to Q2 2021).
- Announced additional exclusive sports on The CW, with eleven PAC-12 Football Games beginning this month and the final eight 2024 NASCAR Xfinity Series races, including all playoff races, beginning in September.
- Announced Nexstar stations in Chicago, IL, Norfolk, VA, and Lafayette, LA will become affiliates of The CW on September 1, bringing the number of Company and partner-owned CW-affiliated stations to 49, covering over 45% of U.S. TV households.
- Delivered sequential primetime entertainment ratings growth at The CW in the first three quarters since the launch of the 2023/2024 broadcast season.
- Earned 35 Regional Edward R. Murrow Awards for outstanding journalism and exceptionally produced news programming from the Radio Television Digital News Association (RTDNA).
Financial Highlights
- Net Revenue. Record second quarter net revenue of $1.27 billion, increased by $29 million, or 2.3%, reflecting growth in distribution and advertising revenue, which more than offset a decline in other revenue. Approximately 58% of Nexstar’s second quarter revenue was derived from distribution revenue.
- Distribution Revenue. Record second quarter distribution revenue of $734 million, increased $38 million, or 5.5%, over the comparable prior year quarter. Distribution revenue growth primarily reflects the impact of distribution contract renewals in 2023 on terms favorable to the Company and annual rate escalators, growth in vMVPD subscribers, the addition of CW affiliations on certain of our stations, and the return of our partner stations on one MVPD in January, which more than offset MVPD subscriber attrition. Distribution revenue includes retransmission revenue, carriage fees, affiliation fees, and spectrum leasing revenue.
- Advertising Revenue. Second quarter advertising revenue of $522 million increased $11 million, or 2.2%, compared to the prior year quarter reflecting a $37 million year-over-year increase in election-year political advertising to $45 million which more than offset a $24 million year-over-year reduction in non-political advertising revenue due to ongoing advertising market softness. Advertising revenue includes television and digital revenue primarily from businesses and political advertisers.
- Net Income. Second quarter net income of $106 million increased $31 million, or 41.3%, compared to the prior year quarter, reflecting increased revenue and lower operating expenses driven, in part, by reduced amortization of broadcast rights at The CW, offset, in part, by reduced income from equity method investments related to the performance of the TV Food Network LLC (“TVFN”) in which we have a 31.3% interest and increased income taxes. Net Income margin increased to 8.4% from 6.0% in the comparable prior year period.
- Adjusted EBITDA. Second quarter Adjusted EBITDA of $398 million increased $63 million, or 18.8%, compared to the prior year quarter primarily reflecting revenue growth and a $33 million year-over-year reduction in losses at The CW, which more than offset a reduction of cash distributions from equity method investments from TVFN primarily related to lower advertising revenue. Adjusted EBITDA margin grew to 31.4% from 27.0% in the comparable prior year period.
Financial Highlights (continued)
- Adjusted Free Cash Flow. Second quarter Adjusted Free Cash Flow of $78 million, increased $4 million, or 5.4%, due primarily to the increase in Adjusted EBITDA offset, in part, primarily by higher operating cash taxes related to increased taxable income and no cash contributions from our partners in The CW.
Capital Allocation
- In the second quarter of 2024 the Company used cash on hand and cash flow from operations to repay $31 million of debt, pay $55 million in dividends, and repurchase 847,904 shares of Nexstar’s common stock at an average price of approximately $159.21 for a total of $135 million.
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($ in millions, shares in thousands) |
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2024 |
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2023 |
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2024 |
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2023 |
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Cash Used For |
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Debt repayment |
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$31 |
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$31 |
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$61 |
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$62 |
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Acquisitions |
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– |
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– |
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– |
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– |
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Stockholder return |
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190 |
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189 |
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358 |
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|
413 |
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Common stock dividends |
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55 |
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48 |
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|
112 |
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|
98 |
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Stock repurchases |
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135 |
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141 |
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246 |
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315 |
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Shares Outstanding |
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End of period |
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32,486 |
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35,381 |
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32,486 |
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35,381 |
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Less: Beginning of period |
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33,038 |
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35,984 |
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33,601 |
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36,810 |
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Change in shares outstanding |
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(552 |
) |
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(603 |
) |
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(1,115 |
) |
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(1,429 |
) |
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% Change |
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(1.7% |
) |
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(1.7% |
) |
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(3.3% |
) |
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(3.9% |
) |
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Debt, Cash and Leverage
- The consolidated debt of Nexstar and Mission Broadcasting, Inc. (“Mission”), an independently owned variable interest entity, as of June 30, 2024, was $6.78 billion, including senior secured debt of $4.07 billion.
- The Company calculates its leverage ratios in accordance with the terms of its credit agreements which exclude The CW Network’s operations and cash balance. As of June 30, 2024, The CW Network had $45 million of cash on its balance sheet.
- As of June 30, 2024, the Company’s first lien net leverage ratio was 2.19x compared to a covenant of 4.25x and its total net leverage ratio was 3.69x.
- The table below summarizes the Company’s unrestricted cash balances and debt obligations (net of financing costs, discounts and/or premiums) as of June 30, 2024 and as of December 31, 2023.
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($ in millions) |
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June 30, 2024 |
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December 31, 2023 |
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Unrestricted Cash |
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$146 |
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$135 |
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Revolving Credit Facilities |
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$62 |
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$62 |
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First Lien Term Loans |
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4,008 |
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4,064 |
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5.625% Senior Unsecured Notes due 2027 |
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1,717 |
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1,717 |
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4.75% Senior Unsecured Notes due 2028 |
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994 |
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994 |
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Total Debt |
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$6,781 |
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$6,837 |
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About Nexstar Media Group, Inc.
Nexstar Media Group, Inc. (NASDAQ: NXST) is a leading diversified media company that produces and distributes engaging local and national news, sports and entertainment content across its television and digital platforms, including more than 310,000 hours of programming produced annually by its business units. Nexstar owns America’s largest local television broadcasting group comprised of top network affiliates, with 200 owned or partner stations in 116 U.S. markets reaching 220 million people. Nexstar’s national television properties include The CW, America’s fifth major broadcast network, NewsNation, our national news network providing “News for All America,” popular entertainment multicast networks Antenna TV and Rewind TV, and a 31.3% ownership stake in TV Food Network. The Company’s portfolio of digital assets, including its local TV station websites, The Hill and NewsNationNow.com, are collectively a Top 10 U.S. digital news and information property. For more information, please visit nexstar.tv.
