Cash flow up, Sinclair Group explains loss Chain of TV stations took one-time charge

November 01, 1995|By Michael Dresser | Michael Dresser,Sun Staff

Sinclair Broadcasting Group Inc., a Baltimore-based chain of independent television stations, reported yesterday that the key indicator of its financial performance jumped 61.7 percent during the third quarter.

David Amy, Sinclair's chief financial officer, said Sinclair's operating cash flow increased to $28.7 million from $15.3 million in the third quarter of 1994.

Mr. Amy said Sinclair considers net income a far less accurate gauge of its performance because that figure is skewed by high levels of depreciation and amortization associated with acquisitions of new stations.

Loss is 14 cents a share

The company reported a net loss of $4.9 million, or 14 cents a share, compared with a loss of $4.6 million, or 16 cents a share, in the year-ago quarter.

However, Mr. Amy said Sinclair would have recorded a profit of $268,000, or 1 cent a share, if not for a one-time charge of $5.1 million related to the net cost of paying off bank debt.

Sinclair's revenues increased 43.4 percent during the quarter, from $35 million a year ago to $50.2 million for the most recent period. Broadcast revenues, another important measure, increased from $32.1 million to $45.4 million, a 41.5 percent gain.

Excluding acquisitions, the company's broadcast revenues increased 11.1 percent over last year, the company reported. WBFF (Channel 45), Sinclair's Fox affiliate in Baltimore, recorded a 14 percent gain in broadcast revenue.

Mr. Amy said Sinclair's third quarter was not significantly affected by a recent turndown in the market for TV advertising.

Stock falls on news

"Generally the quarter was a pretty good quarter for us," Mr. Amy said.

"Where we're really beginning to see some softness is in the fourth quarter."

Despite the company's favorable interpretation of the results, investors reacted skeptically. After the earnings report was released about 3:30 p.m., Sinclair's stock price sank $1.75, from $22.50 to a 52-week low of $20.75.

"I have no idea why anybody would have sold it unless they didn't know what was going on," said Mr. Amy.

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