Nexstar Broadcasting reports record second quarter results

Nexstar Broadcasting, owner/operator of KSNF and KODE in Joplin and KSFX and KOLR in Springfield, released second quarter results this morning. The news release follows:

Nexstar Broadcasting Group, Inc. (NASDAQ: NXST) today reported record financial results for the second quarter ended June 30, 2008.

Summary 2008 Second Quarter Highlights:

Net revenue for the quarter ended June 30, 2008 grew 2.9% to $70.7 million compared to $68.7 million in the second quarter of 2007.

Income from operations rose 20.9% to $16.2 million for the three months ended June 30, 2008, compared with $13.4 million in the quarter ended June 30, 2007.

Broadcast cash flow increased 6.7% to $28.6 million in the second quarter of 2008 compared with $26.8 million for the same period in 2007. Second quarter 2008 EBITDA grew 5.9% to $25.0 million up from $23.6 million in the second quarter of 2007. Free cash flow increased 15.6% to $11.1 million in the quarter ended June 30, 2008, compared with $9.6 million in the comparable period of 2007.

CEO Comment

Perry A. Sook, Chairman, President and Chief Executive Officer of Nexstar Broadcasting Group, Inc., commented, “Nexstar’s record second quarter operating results highlight strong year-over-year increases in political, eMedia and retransmission consent revenues which more than offset the softness in spot revenue and the erosion of network comp. Second quarter 2008 net revenue of $70.7 million included approximately $3.1 million of net political advertising revenue up from $68.7 million of net revenue in last year’s second quarter, which included approximately $1.0 million of net political ad revenue. In addition, our corporate and station level personnel are exercising disciplined expense management thereby offsetting the impact of soft national and local economies.

“Second quarter 2008 retransmission consent revenue grew 14% from year-ago levels to $4.8 million while eMedia revenue rose nearly three-fold to $2.6 million. For the full year, these digital high-margin revenue streams are expected to account for approximately $30.0 million of total revenue.

“Throughout 2008 we’ll apply the Company’s free cash to complete our digital television cap ex program and to reduce debt. We view our projected 2008 digital television cap ex spending of approximately $30 million as one-time in nature so 2009 free cash flow will benefit materially from the conclusion of the program. We believe Nexstar is on track to end 2008 with a total debt leverage ratio of approximately 5.5x -- the lowest debt leverage ratio in the Company’s history -- compared to its permitted leverage covenant of 6.50x at December 31, 2008.”

Outstanding Debt

The Company’s total net debt at June 30, 2008 was $655.6 million, compared to $665.0 million at December 31, 2007. The total net debt consists of $354.9 million of bank debt, $198.2 million of senior subordinated 7% notes, $35.0 million of senior subordinated 12% PIK notes and $83.1 million of 11.375% senior discount notes, less cash on hand of $15.6 million.

As defined in the Company’s credit agreement, consolidated total net debt was $621.2 million at June 30, 2008. The Company’s total leverage ratio at June 30, 2008 was 6.67x compared to a permitted leverage covenant of 6.75x.

Total interest expense in the second quarter of 2008 was $10.8 million, compared to $13.8 million for the same period in 2007. Cash interest expense for the second quarter of 2008 was $10.5 million, compared to $10.1 million for the same period in 2007.

On April 1, 2008, Nexstar redeemed a principal amount of approximately $46.9 million of 11.375% notes outstanding sufficient to ensure that the 11.375% notes would not be “applicable high yield discount obligations” within the meaning of Section 163(i)(1) of the Internal Revenue Code. This principal payment was funded with cash generated from operations and from borrowings under its senior secured credit facility

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