EX-99.1 2 v101399_ex99-1.htm Unassociated Document
Media General, Inc., PO Box 85333 Richmond, VA 23293-0001   804/649-6748   www.mediageneral.com

  

 
FOR IMMEDIATE RELEASE 
Thursday, January 31, 2008
Media General Reports Fourth-Quarter 2007 Results

RICHMOND, Va. - Media General, Inc. (NYSE: MEG) today reported net income for the fourth quarter of 2007 of $9.6 million, or 43 cents per diluted share, compared with $31.6 million, or $1.33 per diluted share, in the fourth quarter of 2006. The 2007 fourth quarter includes write-downs of $15 million related to the sale of SP Newsprint Co., in which Media General has a one-third interest, an accrued after-tax loss of $2 million associated with the company’s plans to divest three television stations, and a $1.4 million write-down related to an investment in a company that produces interactive entertainment. The fourth quarter also includes a pre-tax gain of $17.6 million on an insurance settlement related to a June 2007 fire at the company’s Richmond Times-Dispatch printing plant. Income from continuing operations was $10.4 million, or 47 cents per diluted share, compared with $31.3 million, or $1.32 per diluted share, in the 2006 fourth quarter.

The 2007 fourth quarter had 13 weeks compared with 14 weeks in the 2006 quarter. Although it is difficult to precisely quantify the impact of the additional week, the company has estimated the impact on key metrics throughout this release in order to allow meaningful comparisons. The company estimates the effect of the additional week in 2006 contributed approximately $18.5 million in total revenues and about $2.5 million of net income.

Total company revenues in the fourth quarter of 2007 were $243.8 million, an approximate 10 percent decrease from the equivalent prior-year period.

“Media General’s lower profit in the fourth quarter was chiefly attributable to markedly lower Political revenues compared to the record $33 million generated in last year’s fourth quarter, and a $6.8 million loss from the company’s share of the operating results of SP Newsprint,” said Marshall N. Morton, president and chief executive officer. “Additionally, lower Publishing Division results reflected the extremely weak economic climate in Florida, which drove declines in all major advertising categories in our Tampa market, particularly Classified advertising. Expense savings for the division of more than 5 percent helped to mitigate the revenue shortfall.

“We are pleased with the Interactive Media Division’s continued solid revenue growth, up about 36 percent, led by increased advergaming revenues and Local and National/Regional advertising,” Mr. Morton said. “Revenues from Yahoo!HotJobs also partially helped mitigate overall softness in online Classified revenues. Page views and visitor sessions for the fourth quarter rose about 12-to-14 percent, partially driven by our ‘Web-First’ approach to local news in a number of markets.”

Publishing Division

Publishing Division profit for the quarter decreased approximately 22 percent, total revenues decreased about 9 percent, and newspaper advertising revenues declined about 11 percent.

Classified advertising revenues in the fourth quarter were below last year by about $10 million, or 22 percent. The Tampa, Richmond and Winston-Salem markets saw estimated decreases of 42 percent, 11 percent and 8 percent, respectively. The Community Newspapers group posted an approximate 8 percent decrease in Classified revenues.


(1 of 8)
Publishing     •     Broadcast •     Interactive Media
Media General, Inc., PO Box 85333 Richmond, VA 23293-0001   804/649-6748   www.mediageneral.com
 
For the company’s three metro markets, real estate revenues were down about 36 percent, employment revenues decreased approximately 27 percent, and automotive revenues declined about 24 percent.

Retail revenues decreased about $2 million, or less than 3 percent. At the Richmond Times-Dispatch, Retail revenues increased nominally, including advertising generated by a weekly newspaper acquired in 2007, partially offset by lower advertising in the department store and furniture store categories. The Tampa market experienced an approximate 8 percent decrease in Retail revenues, including lower spending in the home improvement, home furnishings and grocery store categories. The Winston-Salem Journal also experienced a nominal decrease in Retail revenues, with declines in the home improvement category partially offset by advertising from two new monthly publications. Retail revenues for the Community Newspaper group decreased nominally.

National advertising revenues for the quarter decreased approximately $2 million, or 15 percent. The Richmond market generated an increase of about 11 percent, mainly the result of higher spending in the telecommunications, insurance and automotive categories. National advertising fell approximately 31 percent in the fourth quarter in the Tampa market due to declines in pharmaceutical, telecommunications and financial advertising.

Circulation revenues for the fourth quarter were down less than $300,000, or about 1 percent. Daily and Sunday net-paid circulation declines for the month were partially offset by rate increases at the metro newspapers.

Publishing Division expenses declined more than 5 percent for the quarter, reflecting significant decreases in newsprint expense, salaries, and benefits. Newsprint expense decreased as the result both of lower prices and consumption. The average price per ton decreased $93 from the 2006 quarter. Salaries and benefits declined due, in part, to actions taken earlier in the year in response to the weak revenue environment as well as favorable experience in healthcare and retirement-related expenses.

Broadcast Division

Broadcast Division profit for the quarter declined approximately 42 percent, and total Broadcast revenues decreased about 14 percent. The decline was largely due to lower Political revenues from last year’s record quarter. The Broadcast Division results exclude three television stations that are being held for sale and reported as discontinued operations.

Total Political revenues of $4.3 million compared with a record $33.3 million in the 2006 quarter. The current quarter’s revenues were generated from Presidential primary campaigns in Florida, South Carolina and Georgia, state races in many of the company’s markets and issue spending in a number of states.

Gross time sales declined about $20 million, or 17 percent. Local time sales grew approximately
$6 million, or 10 percent. Higher spending in the grocery store and services categories offset lower furniture and specialty store advertising. National time sales were up about $3 million, or 8 percent. Categories showing increases for the quarter included telecommunications and specialty stores, while automotive declined. 

Broadcast expenses for the quarter increased about 3 percent, due to increased commissions and customer incentives to replace the prior year’s Political revenues along with higher depreciation expense on digital equipment purchased in recent years.

Interactive Media Division

Interactive Media Division revenues of $9.2 million increased approximately 36 percent over the 2006 quarter. The growth reflected a significant increase in the advergaming business, which was profitable for the third consecutive quarter, on revenues that more than tripled from last year. Local revenues increased about 50 percent as the result of continued growth in banners and sponsorships and increased success with direct sales. National/Regional revenues also grew more than 50 percent, due to a greater focus on national networks, particularly at TBO.com in Tampa. Classified advertising was down approximately 11 percent as lower newspaper advertising volumes, especially help-wanted, had an unfavorable impact on the company’s Web sites. The division’s quarterly loss of $2.6 million included a $1.4 million write-down of an investment. Excluding the write-down, the division’s quarterly loss was $1.2 million.
 
 
(2 of 8)
Publishing     •     Broadcast •     Interactive Media
Media General, Inc., PO Box 85333 Richmond, VA 23293-0001   804/649-6748   www.mediageneral.com
 
Other results

Interest expense decreased by $1.5 million, almost completely due to one less week in 2007’s fourth quarter. Corporate expense and other expenses were less directly impacted by the extra week, but did reflect lower expense for stock-based compensation and postemployment plans.

EBITDA (income from continuing operations before interest, taxes, depreciation and amortization) in the fourth quarter of 2007 was $47.4 million, compared with $82.9 million in the 2006 period. After-Tax Cash Flow was $27.9 million compared to $48.8 million in the prior year. Free Cash Flow for the quarter (After-Tax Cash Flow minus capital expenditures) was $4.9 million, compared with $24.6 million in the prior-year period. All comparisons were significantly impacted by the reduction in Political advertising.

Media General provides the non-GAAP financial metrics EBITDA, After-Tax Cash Flow, and Free
Cash Flow. The company believes these metrics are useful in evaluating financial performance and
are common alternative measures used by investors, financial analysts and rating agencies. These
groups use EBITDA, along with other measures, to evaluate a company’s ability to service its debt
requirements and to estimate the value of the company. A reconciliation of these metrics to
amounts on the GAAP statements has been included in this news release.

Conference Call and Webcast
 
The company will hold an earnings conference call with financial analysts today at 2:30 p.m. ET. The conference call will be available to the media and general public through a limited number of listen-only dial-in conference lines and via simultaneous Webcast. To dial in to the call, listeners may call 1-800-329-9097 about 10 minutes prior to the 2:30 p.m. start. Listeners may also access the live Webcast by logging on to www.mediageneral.com and clicking on the “Live Earnings Conference” link on the homepage about 10 minutes in advance. A replay of the Webcast will be available online at www.mediageneral.com beginning at 4:30 p.m. on January 31, 2008. A telephone replay is also available, beginning at 4:30 p.m. and ending at 4:30 p.m. February 7, 2008, by dialing 1-888-286-8010 or 617-801-6888, and using the passcode 42270475. 

About Media General
 
Media General is a multimedia company operating leading newspapers, television stations and online enterprises primarily in the Southeastern United States. The company’s publishing assets include three metropolitan newspapers, The Tampa Tribune, Richmond Times-Dispatch, and Winston-Salem Journal; 22 daily community newspapers in Virginia, North Carolina, Florida, Alabama and South Carolina; and more than 150 weekly newspapers and other publications. The company’s broadcasting assets include 23 network-affiliated television stations that reach more than 32 percent of the television households in the Southeast and nearly 9.5 percent of those in the United States. The company’s interactive media assets include more than 75 online enterprises that are associated with its newspapers and television stations.

Investor Contact:
Media Contact:
Lou Anne Nabhan
Ray Kozakewicz
(804) 649-6103
(804) 649-6748
 
 
(3 of 8)
Publishing     •     Broadcast •     Interactive Media
Media General, Inc., PO Box 85333 Richmond, VA 23293-0001   804/649-6748   www.mediageneral.com
 
Media General, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS

                   
   
Thirteen
Weeks
Ending
  
Fourteen
Weeks
Ending
  
Fifty-Two
Weeks
Ending
  
Fifty-Three
Weeks
Ending
  
   
December 30,
  
December 31,
  
December 30,
  
December 31,
  
(Unaudited, in thousands except per share amounts)
  
2007
  
2006
  
2007
  
2006
  
                   
Revenues
  
$
243,785
  
$
289,426
  
$
932,181
  
$
964,857
  
                           
Operating costs:
                          
Production
   
102,529
   
115,781
   
417,057
   
413,588
 
Selling, general and administrative
    
88,587
   
92,479
   
350,263
   
345,179
 
Depreciation and amortization
    
17,460
   
17,545
   
75,235
   
68,409
 
Gain on insurance recovery
    
(17,604
)
  
---
   
(17,604
)
  
---
 
Total operating costs 
    
190,972
   
225,805
   
824,951
   
827,176
 
                           
Operating income
    
52,813
   
63,621
   
107,230
   
137,681
 
                           
Other income (expense):
                          
Interest expense
    
(14,475
)
  
(16,020
)
  
(59,577
)
  
(48,505
)
Investment income (loss) - unconsolidated affiliates
    
(21,850
)
  
2,309
   
(31,392
)
  
10,598
 
Other, net
    
(1,026
)
  
(586
)
  
(2,307
)
  
323
 
Total other expense 
    
(37,351
)
  
(14,297
)
  
(93,276
)
  
(37,584
)
                           
Income from continuing operations before income taxes
    
15,462
   
49,324
   
13,954
   
100,097
 
                           
Income taxes
    
5,021
   
18,037
   
3,622
   
37,012
 
                           
Income from continuing operations
    
10,441
   
31,287
   
10,332
   
63,085
 
Discontinued operations:
                          
Income from discontinued operations (net of tax)
    
1,148
   
1,115
   
2,355
   
4,928
 
Net gain (loss) related to divestiture of operations (net of tax)
    
(2,000
)
  
(773
)
  
(2,000
)
  
11,029
 
Net income
  
$
9,589
  
$
31,629
  
$
10,687
  
$
79,042
  
                           
Net income per common share:
                          
Income from continuing operations
  
$
0.47
  
$
1.33
  
$
0.45
  
$
2.67
  
Discontinued operations
    
(0.04
)
  
0.01
   
0.02
   
0.68
 
Net income
  
$
0.43
  
$
1.34
  
$
0.47
  
$
3.35
  
                           
Net income per common share - assuming dilution:
                          
Income from continuing operations
  
$
0.47
  
$
1.32
  
$
0.45
  
$
2.65
  
Discontinued operations
    
(0.04
)
  
0.01
   
0.02
   
0.67
 
Net income
  
$
0.43
  
$
1.33
  
$
0.47
  
$
3.32
  
                           
                           
Weighted-average common shares outstanding:
                          
Basic
    
22,168
   
23,610
   
22,656
   
23,597
 
Diluted
    
22,296
   
23,789
   
22,827
   
23,784
 
 
 
(4 of 8)
Publishing     •     Broadcast •     Interactive Media
Media General, Inc., PO Box 85333 Richmond, VA 23293-0001   804/649-6748   www.mediageneral.com
 
Media General, Inc.
BUSINESS SEGMENTS
                       
     
 
 
 
Interactive
 
 
 
 
 
(Unaudited, in thousands)
 
Publishing
 
Broadcast
 
Media
 
Eliminations
 
Total
  
                       
Quarter Ended December 30, 2007
                                
Consolidated revenues
  
$
137,102
  
$
99,365
  
$
9,236
  
$
(1,918
)
$
243,785
  
Segment operating cash flow
  
$
32,647
  
$
30,155
  
$
(719
)
      
$
62,083
  
Write-down of investment
                
(1,357
)
        
(1,357
)
Depreciation and amortization
    
(6,043
)
  
(5,544
)
  
(522
)
        
(12,109
)
Segment profit (loss) 
  
$
26,604
  
$
24,611
  
$
(2,598
)
        
48,617
 
                                 
Unallocated amounts:
                                
Interest expense
                            
(14,475
)
Equity in net loss of unconsolidated affiliates
                            
(21,850
)
Acquisition intangibles amortization
                            
(4,206
)
Corporate expense
                            
(8,537
)
Gain on insurance recovery
                            
17,604
 
Other
                           
(1,691
)
Consolidated income from continuing operations before income taxes 
  
$
15,462
  
                                 
Quarter Ended December 31, 2006
                                
Consolidated revenues
  
$
161,216
  
$
122,802
  
$
7,121
  
$
(1,713
)
$
289,426
  
Segment operating cash flow
  
$
42,114
  
$
50,004
  
$
(587
)
      
$
91,531
  
Write-down of investment
                
(700
)
        
(700
)
Depreciation and amortization
    
(5,820
)
  
(5,450
)
  
(432
)
        
(11,702
)
Segment profit (loss) 
  
$
36,294
  
$
44,554
  
$
(1,719
)
        
79,129
 
                                 
Unallocated amounts:
                                
Interest expense
                            
(16,020
)
Equity in net income of unconsolidated affiliates
                            
2,309
 
Acquisition intangibles amortization
                            
(4,619
)
Corporate expense
                            
(8,113
)
Other
                           
(3,362
)
Consolidated income from continuing operations before income taxes 
  
$
49,324
  
                                 
Twelve Months Ended December 30, 2007
                                
Consolidated revenues
  
$
544,757
  
$
358,367
  
$
36,181
  
$
(7,124
)
$
932,181
  
Segment operating cash flow
  
$
115,131
  
$
91,587
  
$
(941
)
      
$
205,777
  
Net write-down of investments
                
(3,433
)
        
(3,433
)
Depreciation and amortization
    
(25,095
)
  
(25,691
)
  
(1,852
)
        
(52,638
)
Segment profit (loss) 
  
$
90,036
  
$
65,896
  
$
(6,226
)
        
149,706
 
                                 
Unallocated amounts:
                                
Interest expense
                            
(59,577
)
Equity in net loss of unconsolidated affiliates
                            
(31,392
)
Acquisition intangibles amortization
                            
(17,773
)
Corporate expense
                            
(37,856
)
Gain on insurance recovery
                            
17,604
 
Other
                           
(6,758
)
Consolidated income from continuing operations before income taxes 
  
$
13,954
  
                                 
Twelve Months Ended December 31, 2006
                                
Consolidated revenues
  
$
601,144
  
$
343,118
  
$
27,113
  
$
(6,518
)
$
964,857
  
Segment operating cash flow
  
$
144,048
  
$
115,304
  
$
(1,629
)
      
$
257,723
  
Write-down of investment
                
(700
)
        
(700
)
Depreciation and amortization
    
(24,876
)
  
(19,936
)
  
(1,479
)
        
(46,291
)
Segment profit (loss) 
  
$
119,172
  
$
95,368
  
$
(3,808
)
        
210,732
 
                                 
Unallocated amounts:
                                
Interest expense
                            
(48,505
)
Equity in net income of unconsolidated affiliates
                            
10,598
 
Acquisition intangibles amortization
                            
(17,018
)
Corporate expense
                            
(39,997
)
Other
                           
(15,713
)
Consolidated income from continuing operations before income taxes 
  
$
100,097
  
 
 
(5 of 8)
Publishing     •     Broadcast •     Interactive Media
Media General, Inc., PO Box 85333 Richmond, VA 23293-0001   804/649-6748   www.mediageneral.com
 
Media General, Inc.
CONSOLIDATED BALANCE SHEETS
           
   
December 30,
 
December 31,
 
(Unaudited, in thousands)
2007
  
2006
  
           
ASSETS
          
           
Current assets:
          
Cash and cash equivalents
  
$
14,215
  
$
11,929
  
Accounts receivable-net
    
137,397
   
136,930
 
Inventories
    
6,690
   
9,650
 
Other
    
53,860
   
41,092
 
Asset of discontinued operations
    
61,564
   
64,519
 
Total current assets
   
273,726
   
264,120
 
               
Investments in unconsolidated affiliates
    
52,360
   
84,854
 
               
Other assets
    
67,250
   
70,596
 
               
Property, plant and equipment - net
    
483,879
   
475,942
 
               
FCC licenses and other intangibles - net
    
668,792
   
686,157
 
               
Excess of cost over fair value of net identifiable assets
              
of acquired businesses - net
   
925,059
   
923,559
 
Total assets
  
$
2,471,066
  
$
2,505,228
  
               
LIABILITIES AND STOCKHOLDERS' EQUITY
              
               
Current liabilities:
              
Accounts payable
  
$
32,938
  
$
34,039
  
Accrued expenses and other liabilities
    
103,500
   
91,972
 
Income taxes payable
    
-
   
4,516
 
Liabilities of discontinued operations
    
878
   
1,074
 
Total current liabilities
   
137,316
   
131,601
 
               
Long-term debt
    
897,572
   
916,320
 
               
Deferred income taxes
    
311,588
   
281,670
 
               
Other liabilities and deferred credits
    
211,583
   
238,277
 
               
Stockholders' equity 1
    
913,007
   
937,360
 
Total liabilities and stockholders' equity
   
$
2,471,066
  
$
2,505,228
  
 
1
2007 Includes a $4.9 million direct charge related to the adoption of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109.
 
 
(6 of 8)
Publishing     •     Broadcast •     Interactive Media
Media General, Inc., PO Box 85333 Richmond, VA 23293-0001   804/649-6748   www.mediageneral.com
 
Media General, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
           
   
Fiscal Years Ended
 
 
December 30,
 
December 31,
 
 
 
2007
 
2006
 
(Unaudited, In thousands)
  
(52 weeks)
  
(53 weeks)
  
Cash flows from operating activities:
          
Net income
  
$
10,687
  
$
79,042
  
Adjustments to reconcile net income:
              
Depreciation
    
53,109
   
47,791
 
Amortization
    
25,341
   
24,842
 
Deferred income taxes
    
16,289
   
11,176
 
Provision for doubtful accounts
    
5,929
   
5,660
 
Investment loss (income) - unconsolidated affiliates
    
31,392
   
(10,598
)
Insurance proceeds related to repair costs
    
19,959
   
-
 
Gain on insurance recovery
    
(17,604
)
  
-
 
Net loss (gain) related to divestiture of discontinued operations
    
2,000
   
(11,029
)
Net write-down of investments
    
3,433
   
700
 
Change in assets and liabilities:
              
Retirement plan contributions 
    
-
   
(15,000
)
Retirement plan accrual 
    
5,444
   
16,543
 
Income taxes payable 
    
(17,518
)
  
711
 
Accounts payable, accrued expenses  
              
 and other liabilities
    
(6,636
)
  
(1,699
)
Other, net 
    
(996
)
  
9,920
 
Net cash provided by operating activities
    
130,829
   
158,059
 
Cash flows from investing activities:
              
Capital expenditures
    
(78,142
)
  
(93,896
)
Purchases of businesses
    
(2,525
)
  
(611,385
)
Proceeds from sales of discontinued operations
   
-
   
135,111
 
Insurance proceeds related to machinery and equipment
    
27,841
   
-
 
Distribution from unconsolidated affiliate
    
5,000
   
2,000
 
Other, net
    
8,245
   
(2,853
)
Net cash used by investing activities
    
(39,581
)
  
(571,023
)
Cash flows from financing activities:
              
Increase in debt
    
570,000
   
1,459,000
 
Repayment of debt
    
(588,823
)
  
(1,027,984
)
Stock repurchase
    
(48,716
)
  
-
 
Debt issuance costs
    
(1,010
)
  
(1,780
)
Cash dividends paid
    
(21,156
)
  
(21,180
)
Other, net
    
743
   
1,861
 
Net cash (used) provided by financing activities
    
(88,962
)
  
409,917
 
Net increase (decrease) in cash and cash equivalents
    
2,286
   
(3,047
)
Cash and cash equivalents at beginning of year
    
11,929
   
14,976
 
Cash and cash equivalents at end of year
  
$
14,215
  
$
11,929
  
 
 
(7 of 8)
Publishing     •     Broadcast •     Interactive Media
Media General, Inc., PO Box 85333 Richmond, VA 23293-0001   804/649-6748   www.mediageneral.com
 
Media General, Inc.
EBITDA, After-tax Cash Flow, and Free Cash Flow
                   
   
Thirteen
Weeks
Ending
  
Fourteen
Weeks
Ending
  
Fifty-Two
Weeks
Ending
  
Fifty-Three
Weeks
Ending
  
   
December 30,
  
December 31,
  
December 30,
  
December 31,
  
(Unaudited, in thousands)
  
2007
  
2006
  
2007
  
2006
  
                   
Income from continuing operations
  
$
10,441
  
$
31,287
  
$
10,332
  
$
63,085
  
Interest
    
14,475
   
16,020
   
59,577
   
48,505
 
Taxes
    
5,021
   
18,037
   
3,622
   
37,012
 
Depreciation and amortization
    
17,460
   
17,545
   
75,235
   
68,409
 
                           
EBITDA from continuing operations
  
$
47,397
  
$
82,889
  
$
148,766
  
$
217,011
  
                           
Income from continuing operations
  
$
10,441
  
$
31,287
  
$
10,332
  
$
63,085
  
Depreciation and amortization
    
17,460
   
17,545
   
75,235
   
68,409
 
                           
After-tax cash flow
  
$
27,901
  
$
48,832
  
$
85,567
  
$
131,494
  
                           
After-tax cash flow
  
$
27,901
  
$
48,832
  
$
85,567
  
$
131,494
  
Capital expenditures
    
23,014
   
24,229
   
78,142
   
93,896
 
                           
Free cash flow
  
$
4,887
  
$
24,603
  
$
7,425
  
$
37,598
  
 
 
(8 of 8)
Publishing     •     Broadcast •     Interactive Media