Sinclair revenues rose 59% in '95 Analysts credit gain to acquisitions

February 15, 1996|By Bill Atkinson | Bill Atkinson,SUN STAFF

Fast-growing Sinclair Broadcast Group Inc.'s revenues surged 59.3 percent in 1995, the company said yesterday, and industry observers attributed the gain to increased cash flow from acquisitions.

The Baltimore-based chain of independent television stations said net broadcasting revenues in the fourth quarter ended Dec. 31 were $54 million, up 0.3 percent from the 1994 period, and broadcast cash flow grew 3.9 percent to $33.6 million.

For the full year, the company reported total revenues of $206 million. On a pro forma basis, including its acquisitions in 1994 and 1995, Sinclair's consolidated net broadcast revenues jumped nearly 11 percent to $191 million.

Broadcast cash flow, a key industry measure, was up 22.4 percent to $111.4 million on a pro forma basis for the full year.

"These are very good numbers, in light of a fourth quarter that was flat to weak for the industry," said Richard Rolnick, an analyst with Dillon Read & Co. "It is clearly the result of good station buys."

Company officials were said to be traveling and could not be reached for comment. Sinclair reported fourth-quarter and year-end results yesterday.

The company earned $76,000 for the year, but income before a $4.9 million extraordinary charge was $5 million, compared with a $2.7 million loss in 1994.

Sinclair incurred the $4.9 million charge net of a $3.1 million tax benefit upon the refinancing of about $201 million of senior bank debt.

Sinclair's stock closed yesterday at $20.25, up $2.25, on the Nasdaq stock market.

Mr. Rolnick said the stock has been unfairly beaten down ever since the Fox Network dumped Sinclair as an affiliate in Norfolk, Va., and Raleigh, N.C., last year.

Mark McFadden, an analyst with Bankers Trust Research, expects big things from Sinclair. He said the company's broadcast cash flow margin is in the 55 percent range, much higher than the 40 percent level of the competition.

"We think they are going to have a very good year," he said. "They continue to take high margins out of their stations."

He sees the company exploiting the new telecommunications deregulation bill by expanding its holdings through acquisitions. The bill, signed into law a week ago, lifted limits on the number of stations companies can own.

Sinclair has made 10 acquisitions during the past two years. In January, it entered into a purchase agreement to buy WYZZ-TV of Peoria-Bloomington, Ill. WYZZ is the Fox Network affiliate operating in the 109th-largest television market in the country.

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