Sinclair posts losses despite large revenue gain

Baltimore radio, TV chain made several acquisitions in 1998

February 10, 1999|By Mark Ribbing | Mark Ribbing,SUN STAFF

Sinclair Broadcast Group Inc. reported losses for the fourth quarter and the year yesterday in spite of large gains in revenue and cash flow.

Baltimore-based Sinclair, which has emerged as one of the country's biggest owners of radio and television stations, had a net loss of $10.6 million, or 14 cents per diluted share, in the quarter ending Dec. 31. In the same quarter of the previous year, the company incurred a net loss of $4.7 million, or 9 cents per diluted share.

For the year, Sinclair reported a net loss of $16.9 million, 29 cents per diluted share. In 1997, Sinclair had a net loss of $10.6 million, or 19 cents per diluted share.

"The losses were really driven by our acquisitions," said Sinclair Chief Financial Officer David B. Amy. Among its many purchases last year, Sinclair bought Sullivan Broadcast Holdings Inc. in a deal valued at $1 billion and completed its $252 million buyout of Max Media Properties LLC.

However, the company saw growth in revenue and after-tax cash flow, two important financial categories in the capital-intensive broadcasting industry. Here, too, the acquisition spree made its mark. In the earnings statement, which was released after the close of trading, Sinclair said these increases "were primarily the result of several acquisitions."

Sinclair had revenue of $240.5 million in its fourth quarter, up 58.1 percent from $152.1 million in the same quarter of 1997. Sinclair had $736.8 million in revenue for the whole of 1998, 42.7 percent more than in 1997, when the company took in $516.4 million.

After-tax cash flow, a net income figure that takes into account such factors as depreciation, amortization and extraordinary items, was $64 million in the fourth quarter, 58.7 percent higher than the $40.3 million the company posted for the same period of the previous year.

Yearly after-tax cash flow was $149.8 million in 1998, a 58.8 percent increase from 1997's $94.3 million.

In a separate announcement yesterday, Sinclair said Barry Baker, the chief executive officer-designate of its Sinclair Communications Inc. subsidiary, has resigned.

Baker, 46, is the biggest individual shareholder in Sinclair outside of the Smith family, whose members include the company's chief executive officer and other top executives. Baker was the founder and chairman of River City Broadcasting LP, which Sinclair acquired in 1996 in a deal valued at $1.2 billion.

Baker said he wants to pursue new opportunities. "I've built businesses my whole life. I'm fortunate in that I can do what I want to do on an entrepreneurial basis." He said he has been approached by other media companies.

"I don't think it was expected," analyst Victor B. Miller of Bear, Stearns & Co. Inc. in New York said of Baker's departure. "But Barry Baker's one of the most entrepreneurial guys I've ever met. Entrepreneurial guys don't sit around very long."

Pub Date: 2/10/99

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