Sinclair, Inc. (Nasdaq: SBGI), the "Company" or "Sinclair,"
today reported financial results for the three and six months ended
June 30, 2024.
Highlights:
- Met second quarter Revenue guidance on Distribution and
Advertising
- Exceeded second quarter Adjusted EBITDA guidance
- As of August 1, the Company has booked $146 million in
political advertising for the second half of the year through
Election Day; this compares to $78 million as of August 1,
2020
- Company increases full-year political advertising guidance to a
range of $385 million to $410 million, representing growth of 10%
to 17% compared to 2020 excluding the Georgia runoff.
CEO Comment:
"Sinclair delivered solid second-quarter results, meeting our
guidance expectations across major financial metrics, including a
$105 million monetization of an investment in our Ventures
portfolio," commented Chris Ripley, Sinclair's President and Chief
Executive Officer. "Total advertising revenue was up 11%
year-over-year and distribution revenues grew by 4%. With almost
60% of our Big 4 subscribers still to be renewed this year, we are
confident in our ability to grow net retrans in line with our
2-year CAGR estimates. As we enter the second half of the year, we
are buoyed by strong momentum and multiple cash flow drivers.
Political advertising revenue is on track to be our largest ever,
with expected double-digit growth rates over the 2020 presidential
election year. Coupled with growth in distribution revenues, and
continued strength in core advertising trends, we are
well-positioned for a robust finish to the year."
Recent Company
Developments:
Content and Distribution:
- Year-to-date, Sinclair's newsrooms have won a total of 176
journalism awards, including 24 RTDNA Regional Edward R. Murrow
Awards for Outstanding Journalism, 4 National Headliner Awards, and
23 regional Emmy awards.
Community:
- In June and July, the Company partnered with Feeding America®
to coordinate Sinclair Cares: Summer Hunger Relief, an awareness
and fundraising campaign to help provide meals to children and
families across the U.S. this summer.
- Also in July, the Company announced that it has awarded
scholarships to 12 university students as a part of its annual
Diversity Scholarship program. Having provided more than $370,000
in tuition assistance since 2013, the annual Sinclair Broadcast
Group Diversity Scholarship aims to invest in the future of the
local media industry and help students from diverse backgrounds,
who reflect Sinclair’s audiences nationwide, complete their
education and pursue careers in local media journalism, digital
storytelling, and marketing.
Investment Portfolio:
- During the second quarter, Ventures made investments of
approximately $26 million in minority investments and received
distributions, including exit payments, of approximately $109
million.
NextGen Broadcasting (ATSC 3.0):
- To date, the Company has launched NextGen Broadcast in 45
markets, including the recent launch of Myrtle Beach-Florence, SC.
NextGen Broadcast is now available in over 75% of the TV households
in Sinclair's licensed footprint.
Financial Results:
Three Months Ended June 30, 2024 Consolidated Financial
Results:
- Total revenues increased 8% to $829 million versus $768 million
in the prior year period. Media revenues increased 8% to $819
million versus $761 million in the prior year period.
- Total advertising revenues of $343 million increased 11% versus
$309 million in the prior year period. Core advertising revenues,
which exclude political revenues, were $303 million, in line with
the prior year period.
- Distribution revenues of $435 million increased versus $418
million in the prior year period.
- Operating income of $64 million increased versus an operating
loss of $3 million in the prior year period.
- Net income attributable to the Company was $17 million versus
net loss of $89 million in the prior year period.
- Adjusted EBITDA increased 42% to $158 million from $111 million
in the prior year period.
- Diluted earnings per common share was $0.27 as compared to
diluted loss per common share of $1.38 in the prior year
period.
Six Months Ended June 30, 2024 Consolidated Financial
Results:
- Total revenues increased 6% to $1,627 million versus $1,541
million in the prior year period. Media revenues increased 6% to
$1,611 million versus $1,527 million in the prior year period.
- Total advertising revenues of $664 million increased 7% versus
$618 million in the prior year period. Core advertising revenues,
which excludes political revenues, of $600 million were down 1%
versus $609 million in the prior year period.
- Distribution revenues of $871 million increased versus $844
million in the prior year period.
- Operating income of $106 million increased versus operating
income of $18 million in the prior year period.
- Net income attributable to the Company was $40 million versus
net income of $96 million in the prior year period.
- Adjusted EBITDA increased 28% to $297 million from $232 million
in the prior year period.
- Diluted earnings per common share was $0.61 as compared to
diluted earnings per common share of $1.43 in the prior year
period.
Segment financial information is included in the following
tables for the periods presented. The Local Media segment consists
primarily of broadcast television stations, which the Company owns,
operates or to which the Company provides services, and includes
multicast networks and original content. The Local Media segment
assets are owned and operated by Sinclair Broadcast Group, LLC
(SBG). The Tennis segment consists primarily of Tennis Channel, a
cable network which includes coverage of most of tennis' top
tournaments and original professional sport and tennis lifestyle
shows; the Tennis Channel International subscription and streaming
service; Tennis Channel Plus streaming service; T2 FAST, a 24-hours
a day free ad-supported streaming television channel; and
Tennis.com. Other includes non-broadcast digital solutions,
technical services, and other non-media investments. For periods
presented subsequent to June 1, 2023 (the date of the
reorganization), the assets of the Tennis segment and Other are
owned and operated by Sinclair Ventures, LLC (Ventures). The
highlights below include the divestiture of Stadium (May 2,
2023).
Three months ended June 30,
2024
Local
Media
Tennis
Other
Corporate
and
Eliminations
Consolidated
($ in millions)
Distribution revenue
$
384
$
51
$
—
$
—
$
435
Core advertising revenue
285
14
9
(5
)
303
Political advertising revenue
40
—
—
—
40
Other media revenue
41
2
—
(2
)
41
Media revenues
$
750
$
67
$
9
$
(7
)
$
819
Non-media revenue
—
—
11
(1
)
10
Total revenues
$
750
$
67
$
20
$
(8
)
$
829
Media programming and production
expenses
$
382
$
43
$
—
$
—
$
425
Media selling, general and administrative
expenses
178
17
5
(6
)
194
Non-media expenses
2
—
12
(1
)
13
Amortization of program costs
18
—
—
—
18
Corporate general and administrative
expenses
29
—
1
20
50
Stock-based compensation
10
—
—
—
10
Non-recurring and unusual transaction,
implementation, legal, regulatory and other costs
12
—
1
6
19
Interest expense (net)(a)
71
—
(3
)
—
68
Capital expenditures
23
—
—
—
23
Distributions to the noncontrolling
interests
3
—
—
—
3
Cash distributions from equity
investments
—
—
109
—
109
Net cash taxes paid
1
Net income
19
Operating income (loss)
83
1
—
(20
)
64
Adjusted EBITDA(b)
163
7
3
(15
)
158
Note: Certain amounts may not summarize to
totals due to rounding differences.
(a)
Interest expense (net) excludes deferred
financing costs, original issue discount amortization, and other
non-cash interest expense, and is net of interest income.
(b)
Adjusted EBITDA is defined as earnings
before interest, tax, depreciation and amortization, and
non-recurring and unusual transaction, implementation, legal,
regulatory and other costs, as well as certain non-cash items such
as stock-based compensation expense and other gains and losses less
amortization of program costs. Refer to the reconciliation at the
end of this press release and the Company’s website.
Three months ended June 30,
2023
Local
Media
Tennis
Other
Corporate
and
Eliminations
Consolidated
($ in millions)
Distribution revenue
$
372
$
46
$
—
$
—
$
418
Core advertising revenue
287
14
6
(4
)
303
Political advertising revenue
6
—
—
—
6
Other media revenue
34
—
—
—
34
Media revenues
$
699
$
60
$
6
$
(4
)
$
761
Non-media revenue
—
—
8
(1
)
7
Total revenues
$
699
$
60
$
14
$
(5
)
$
768
Media programming and production
expenses
$
369
$
40
$
5
$
(1
)
$
413
Media selling, general and administrative
expenses
175
12
6
(3
)
190
Non-media expenses
3
—
7
(1
)
9
Amortization of program costs
19
—
—
—
19
Corporate general and administrative
expenses
46
—
—
16
62
Stock-based compensation
10
—
—
2
12
Non-recurring and unusual transaction,
implementation, legal, regulatory and other costs
18
—
4
2
24
Interest expense (net)(a)
66
—
(5
)
—
61
Capital expenditures
19
—
1
—
20
Distributions to the noncontrolling
interests
4
—
—
—
4
Cash distributions from equity
investments
—
—
5
—
5
Net cash taxes paid
2
Net loss
(87
)
Operating income (loss)
22
3
(12
)
(16
)
(3
)
Adjusted EBITDA(b)
115
8
—
(12
)
111
Note: Certain amounts may not summarize to
totals due to rounding differences.
(a)
Interest expense (net) excludes deferred
financing costs, original issue discount amortization, and other
non-cash interest expense, and is net of interest income.
(b)
Adjusted EBITDA is defined as earnings
before interest, tax, depreciation and amortization, and
non-recurring and unusual transaction, implementation, legal,
regulatory and other costs, as well as certain non-cash items such
as stock-based compensation expense and other gains and losses less
amortization of program costs. Refer to the reconciliation at the
end of this press release and the Company’s website.
Consolidated Balance Sheet and Cash
Flow Highlights of the Company:
- Total Company debt as of June 30, 2024 was $4,143 million, of
which $4,127 million is SBG debt and $16 million is Ventures
debt.
- Cash and cash equivalents for the Company as of June 30, 2024
was $378 million, of which $52 million is SBG cash and $326 million
is Ventures cash.
- As of June 30, 2024, 42.5 million Class A common shares and
23.8 million Class B common shares were outstanding, for a total of
66.3 million common shares.
- In June, the Company paid a quarterly cash dividend of $0.25
per share.
- Capital expenditures for the second quarter of 2024 were $23
million.
Notes:
Certain reclassifications have been made to prior years'
financial information to conform to the presentation in the current
year.
Outlook:
The Company currently expects to achieve the following results
for the three months ending September 30, 2024 and the twelve
months ending December 31, 2024.
For the three months ending September
30, 2024 ($ in millions)
Local Media
Tennis
Other
Corporate
and
Eliminations
Consolidated
Core advertising revenue
$288 to 300
$10
$9
$(5)
$302 to 315
Political advertising revenue
113 to 128
—
—
—
113 to 128
Advertising revenue
$401 to 428
$10
$9
$(5)
$415 to 443
Distribution revenue
381 to 383
51
—
—
433 to 435
Other media revenue
41
1
—
(1)
41
Media revenues
$823 to 852
$63
$9
$(7)
$889 to 919
Non-media revenue
—
—
10
—
10
Total revenues
$823 to 852
$63
$19
$(7)
$898 to 929
Media programming & production
expenses and media selling, general and administrative expenses
$569 to 574
$49
$6
$(7)
$618 to 623
Non-media expenses
2
—
12
—
14
Amortization of program costs
18
—
—
—
18
Corporate general and administrative
23
—
1
13
38
Stock-based compensation
8
—
—
—
8
Non-recurring and unusual transaction,
implementation, legal, regulatory and other costs
8
—
2
—
9
Interest expense (net)(a)
71
—
(3)
—
68
Capital expenditures
24 to 26
1
—
—
25 to 27
Distributions to the noncontrolling
interests
3
—
—
—
3
Cash distributions from equity
investments
—
—
2
—
2
Net cash tax payments
1
Operating Income
$153 to 178
$8
$(1) to 0
$(13)
$148 to 173
Adjusted EBITDA(b)
$227 to 252
$13
$1 to 2
$(13)
$229 to 254
Note: Certain amounts may not summarize to
totals due to rounding differences.
(a)
Interest expense (net) excludes deferred
financing costs, original issue discount amortization, and other
non-cash interest expense, and is net of interest income.
(b)
Adjusted EBITDA is defined as earnings
before interest, tax, depreciation and amortization, and
non-recurring and unusual transaction, implementation, legal,
regulatory and other costs, as well as certain non-cash items such
as stock-based compensation expense and other gains and losses less
amortization of program costs.
For the twelve months ending December
31, 2024 ($ in millions)
Consolidated
Media programming & production
expenses and media selling, general and administrative expenses
$2,471 to 2,481
Non-media expenses
$55
Amortization of program costs
$74
Corporate general and administrative
$182
Stock based compensation included in
corporate, media, and non-media expenses above
$54
Non-recurring and unusual transaction,
implementation, legal, regulatory and other costs included in
corporate, media, and non-media expenses above
$42
Interest expense (net)(a)
$266
Capital expenditures
$93 to 98
Distributions to noncontrolling
interests
$10
Cash distributions from equity
investments
$189
Net cash tax payments
$6 to 10
Note: Certain amounts may not summarize to
totals due to rounding differences.
(a)
Interest expense (net) excludes deferred
financing costs, original issue discount amortization, and other
non-cash interest expense, and is net of interest income.
Sinclair Conference Call:
The senior management of Sinclair will hold a conference call to
discuss the Company's second quarter 2024 results on Wednesday,
August 7, 2024, at 4:30 p.m. ET. The call will be webcast live and
can be accessed at www.sbgi.net under "Investor Relations/Events
and Presentations." After the call, an audio replay will remain
available at www.sbgi.net. The press and the public will be welcome
on the call in a listen-only mode. The dial-in number is (888)
506-0062, with entry code 355312.
About Sinclair:
Sinclair, Inc. is a diversified media company and a leading
provider of local news and sports. The Company owns, operates
and/or provides services to 185 television stations in 86 markets
affiliated with all the major broadcast networks; and owns Tennis
Channel and multicast networks Comet, CHARGE!, TBD., and The Nest.
Sinclair’s content is delivered via multiple platforms, including
over-the-air, multi-channel video program distributors, and the
nation’s largest streaming aggregator of local news content,
NewsON. The Company regularly uses its website as a key source of
Company information which can be accessed at www.sbgi.net.
Sinclair, Inc. and Subsidiaries
Preliminary Unaudited Consolidated
Statements of Operations
(In millions, except share and per
share data)
Three Months Ended
June 30,
Six Months Ended
June 30,
2024
2023
2024
2023
REVENUES:
Media revenues
$
819
$
761
$
1,611
$
1,527
Non-media revenues
10
7
16
14
Total revenues
829
768
1,627
1,541
OPERATING EXPENSES:
Media programming and production
expenses
425
413
833
811
Media selling, general and administrative
expenses
194
190
390
381
Amortization of program costs
18
19
37
41
Non-media expenses
13
9
25
21
Depreciation of property and equipment
25
32
50
56
Corporate general and administrative
expenses
50
62
108
120
Amortization of definite-lived intangible
assets
38
41
76
82
Loss on asset dispositions and other, net
of impairment
2
5
2
11
Total operating expenses
765
771
1,521
1,523
Operating income (loss)
64
(3
)
106
18
OTHER INCOME (EXPENSE):
Interest expense including amortization of
debt discount and deferred financing costs
(76
)
(76
)
(152
)
(150
)
Gain on extinguishment of debt
—
11
1
11
Income (loss) from equity method
investments
78
(1
)
92
30
Other expense, net
(42
)
(38
)
(2
)
(27
)
Total other expense, net
(40
)
(104
)
(61
)
(136
)
Income (loss) before income taxes
24
(107
)
45
(118
)
INCOME TAX (PROVISION) BENEFIT
(5
)
20
(1
)
224
NET INCOME (LOSS)
19
(87
)
44
106
Net loss attributable to the redeemable
noncontrolling interests
—
—
—
4
Net income attributable to the
noncontrolling interests
(2
)
(2
)
(4
)
(14
)
NET INCOME (LOSS) ATTRIBUTABLE TO
SINCLAIR
$
17
$
(89
)
$
40
$
96
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO
SINCLAIR:
Basic earnings per share
$
0.27
$
(1.38
)
$
0.61
$
1.44
Diluted earnings per share
$
0.27
$
(1.38
)
$
0.61
$
1.43
Basic weighted average common shares
outstanding (in thousands)
66,189
64,012
65,172
66,862
Diluted weighted average common and common
equivalent shares outstanding (in thousands)
66,189
64,012
65,296
66,947
Adjusted EBITDA is a non-GAAP operating performance measure that
management and the Company’s Board of Directors uses to evaluate
the Company’s operating performance and for executive compensation
purposes. The Company believes that Adjusted EBITDA provides useful
information to investors by allowing them to view the Company’s
business through the eyes of management and is a measure that is
frequently used by industry analysts, investors and lenders as a
measure of relative operating performance.
Adjusted EBITDA is provided on a forward-looking basis under the
section entitled “Outlook” above. The Company has not included a
reconciliation of projected Adjusted EBITDA to net income, which is
the most directly comparable GAAP measure, for the periods
presented in reliance on the unreasonable efforts exception
provided under Item 10(e)(1)(i)(B) of Regulation S-K. The Company’s
projected Adjusted EBITDA excludes certain items that are
inherently uncertain and difficult to predict including, but not
limited to, income taxes. Due to the variability, complexity and
limited visibility of the adjusting items that would be excluded
from projected Adjusted EBITDA in future periods, management does
not rely upon them for internal use or measurement of operating
performance, and therefore cannot create a quantitative projected
Adjusted EBITDA to net income reconciliation for the periods
presented without unreasonable efforts. A quantitative
reconciliation of projected Adjusted EBITDA to net income for the
periods presented would imply a degree of precision and certainty
as to these future items that does not exist and could be confusing
to investors. From a qualitative perspective, it is anticipated
that the differences between projected Adjusted EBITDA to net
income for the periods presented will consist of items similar to
those described in the reconciliation of historical results below.
The timing and amount of any of these excluded items could
significantly impact the Company’s net income for a particular
period. When planning, forecasting and analyzing future periods,
the Company does so primarily on a non-GAAP basis without preparing
a GAAP analysis.
In addition to the reconciliation of Adjusted EBITDA to its most
directly comparable GAAP measure, net income, below, the Company
also discloses a reconciliation of the Adjusted EBITDA of its
segments to its more directly comparable GAAP measure, segment
operating income.
Non-GAAP measures are not formulated in accordance with GAAP,
are not meant to replace GAAP financial measures and may differ
from other companies’ uses or formulations. Further discussions and
reconciliations of the Company's non-GAAP financial measures to
their most directly comparable GAAP financial measures can be found
on its website www.sbgi.net.
Sinclair, Inc. and Subsidiaries
Reconciliation of Non-GAAP Measurements
- Unaudited
All periods reclassified to conform
with current year GAAP presentation and Adjusted EBITDA
definitional change due to routine SEC comment process
(in millions)
Three Months Ended
June 30,
Six Months Ended
June 30,
2024
2023
2024
2023
Reconciliation of Consolidated
Sinclair, Inc. Net Income to Consolidated Adjusted EBITDA
Net income (loss)
$
19
$
(87
)
$
44
$
106
Add: Income tax provision (benefit)
5
(20
)
1
(224
)
Add: Other expense (income)
2
(3
)
(26
)
(3
)
Add: (Income) loss from equity method
investments
(78
)
1
(92
)
(30
)
Add: Loss from other investments and
impairments
47
52
45
53
Add: Gain on extinguishment of
debt/insurance proceeds
(1
)
(11
)
(3
)
(11
)
Add: Interest expense
76
76
152
150
Less: Interest income
(6
)
(11
)
(15
)
(23
)
Less: Loss on asset dispositions and
other, net of impairment
2
5
2
11
Add: Amortization of intangible assets
& other assets
38
41
76
82
Add: Depreciation of property &
equipment
25
32
50
56
Add: Stock-based compensation
10
12
38
35
Add: Non-recurring and unusual
transaction, implementation, legal, regulatory and other costs
19
24
25
30
Adjusted EBITDA
$
158
$
111
$
297
$
232
Three months ended June 30,
2024
Local Media
Tennis
Other
($ in millions)
Total revenues
$
750
$
67
$
20
Media programming and production
expenses
382
43
—
Media selling, general and administrative
expenses
178
17
5
Depreciation and intangible amortization
expenses
58
6
—
Amortization of program costs
18
—
—
Corporate general and administrative
expenses
29
—
1
Non-media expenses
2
—
12
Loss on asset dispositions and other, net
of impairment
—
—
2
Segment operating income
$
83
$
1
$
—
Reconciliation of Segment GAAP
Operating Income to Segment Adjusted EBITDA:
Segment operating income
$
83
$
1
$
—
Depreciation and intangible amortization
expenses
58
6
—
Loss on asset dispositions and other, net
of impairment
—
—
2
Stock-based compensation
10
—
—
Non-recurring and unusual transaction,
implementation, legal, regulatory and other costs
12
—
1
Segment Adjusted EBITDA
$
163
$
7
$
3
Three months ended June 30,
2023
Local Media
Tennis
Other
($ in millions)
Total revenues
$
699
$
60
$
14
Media programming and production
expenses
369
40
5
Media selling, general and administrative
expenses
175
12
6
Depreciation and intangible amortization
expenses
67
5
1
Amortization of program costs
19
—
—
Corporate general and administrative
expenses
46
—
—
Non-media expenses
3
—
7
(Gain) loss on asset dispositions and
other, net of impairment
(2
)
—
7
Segment operating income (loss)
$
22
$
3
$
(12
)
Reconciliation of Segment GAAP
Operating Income to Segment Adjusted EBITDA:
Segment operating income (loss)
$
22
$
3
$
(12
)
Depreciation and intangible amortization
expenses
67
5
1
(Gain) loss on asset dispositions and
other, net of impairment
(2
)
—
7
Stock-based compensation
10
—
—
Non-recurring and unusual transaction,
implementation, legal, regulatory and other costs
18
—
4
Segment Adjusted EBITDA
$
115
$
8
$
—
Forward-Looking
Statements:
The matters discussed in this news release, particularly those
in the section labeled “Outlook,” include forward-looking
statements regarding, among other things, future operating results.
When used in this news release, the words “outlook,” “intends to,”
“believes,” “anticipates,” “expects,” “achieves,” “estimates,” and
similar expressions are intended to identify forward-looking
statements. Such statements are subject to a number of risks and
uncertainties. Actual results in the future could differ materially
and adversely from those described in the forward-looking
statements as a result of various important factors, including and
in addition to the assumptions set forth therein, but not limited
to, the rate of decline in the number of subscribers to services
provided by traditional and virtual multi-channel video programming
distributors (“Distributors”); the Company’s ability to generate
cash to service its substantial indebtedness; the successful
execution of outsourcing agreements; the successful execution of
retransmission consent agreements; the successful execution of
network and Distributor affiliation agreements; the Company’s
ability to identify and consummate acquisitions and investments, to
manage increased financial leverage resulting from acquisitions and
investments, and to achieve anticipated returns on those
investments once consummated; the Company’s ability to compete for
viewers and advertisers; pricing and demand fluctuations in local
and national advertising; the appeal of the Company’s programming
and volatility in programming costs; material legal, financial and
reputational risks and operational disruptions resulting from a
breach of the Company’s information systems; the impact of FCC and
other regulatory proceedings against the Company; compliance with
laws and uncertainties associated with potential changes in the
regulatory environment affecting the Company’s business and growth
strategy; the impact of pending and future litigation claims
against the Company; the Company’s limited experience in operating
or investing in non-broadcast related businesses; and any risk
factors set forth in the Company’s recent reports on Form 10-Q
and/or Form 10-K, as filed with the Securities and Exchange
Commission. There can be no assurances that the assumptions and
other factors referred to in this release will occur. The Company
undertakes no obligation to publicly release the result of any
revisions to these forward-looking statements except as required by
law.
Category: Financial
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240807752862/en/
Investor Contacts: Christopher C. King, VP, Investor Relations
Billie-Jo McIntire, AVP, Investor Relations (410) 568-1500
Media Contact: Sinclair@5wpr.com
Sinclair (NASDAQ:SBGI)
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