Despite $2.6 million in retransmission money, Nexstar Broadcasting's debt grew to a staggering $683 million as of March 31, according to a news release filed today with the Securities and Exchange Commission:
Net revenue for the quarter ended March 31, 2007 grew 3.7% to $62.1 million from $59.8 million in the first quarter of 2006. Income from operations was $6.1 million for the three months ended March 31, 2007 and 2006. The Company reported a basic and diluted net loss per share of $0.32 for the three months ended March 31, 2007 compared with a basic and diluted net loss per share of $0.26 in the first quarter of 2006.
Gross local and national advertising revenues increased by 4.1% in the first quarter of 2007 compared with the first quarter of 2006. Broadcast cash flow rose 4.6% to $20.8 million in the first quarter of 2007 compared with $19.8 million in the first quarter of 2006. EBITDA totaled $17.7 million for the first quarter of 2007, a 6.6% increase over the first quarter of 2006.
A big part of the company's growth, described by CEO Perry Sook as "record-breaking," came from retransmission rights. Joplin Cable One subscribers well remember the battle between Nexstar and the cable company in 2005, when Nexstar's KSNF and Mission Broadcasting's KODE were pulled off Cable One for nearly the entire year:
"During the first quarter, retransmission consent agreements contributed cash revenues of $2.6 million and approximately $1.2 million of ad spends which reflects growth of 27% from last year's levels. Our first quarter also represents the very early new media contributions from 13 of Nexstar’s 29 markets, most of which were enabled late in the quarter. The transition of our TV station websites into community portals is on schedule and we expect that the entire platform will be re-launched before the end of the third quarter of this year. Nexstar’s high margin retransmission consent agreements and new media initiatives are expected to add more meaningful value to our shareholders on a going forward basis. As these initiatives fully develop, our goal is to have each of these offerings individually contribute 15% to the Company’s consolidated EBITDA.
"Additionally, Nexstar’s continued focus on local sales and local news leadership in our mid-sized markets support our expectations for continued leading revenue share in the majority of the markets in which we operate. During the first quarter, new local direct billing totaled approximately $3.6 million, representing another first quarter company record for this metric."
The news of the company's growing debt was featured toward the bottom of the news release:
The Company’s total debt at March 31, 2007 was $683.5 million, compared to $681.1 million at December 31, 2006. As of March 31, 2007 and December 31, 2006, total bank debt under Nexstar’s and Mission’s senior credit facilities was $369.3 million and $370.1 million, respectively. As defined per the Company’s credit agreement, consolidated total debt was $559.2 million at March 31, 2007, net of cash on hand of $7.9 million, which resulted in a leverage ratio of 5.74x, compared to a permitted leverage covenant of 7.0x. Covenants under the Company’s credit agreement exclude Nexstar Finance Holdings, Inc.’s 11.375% notes, which accreted to $116.4 million as of March 31, 2007.