Revenue, broadcast cash flow up, Sinclair says

Increases attributed to acquisitions

net loss for quarter $1.3 million

Television

July 30, 1999|By Mark Ribbing | Mark Ribbing,SUN STAFF

Sinclair Broadcast Group Inc. reported yesterday that its revenue and broadcast cash flow were up in the second quarter, attributing the increases in part to an acquisition campaign that has had the side effect of plunging the company deeply into debt.

After charges and dividends paid to preferred shareholders, Baltimore-based Sinclair, one of the largest television-station operators in the nation, had a net loss of $1.3 million, or 1 cent per share.

In last year's second quarter, the company had a post-dividend net loss of $3.5 million, or 4 cents per share.

Thanks largely to acquisitions, total quarterly revenue rose to $228 million, 36.1 percent more than the $167.5 million the company pulled in during the corresponding quarter last year.

"This quarter we were beginning to see a firmness in the national [advertising market]," said Sinclair Chief Financial Officer David B. Amy. "That's a very positive sign for us."

Again because of acquisitions, broadcast cash flow -- a broadcasting-industry benchmark -- stood at $110.5 million, 33.5 percent higher than in the second quarter of 1998. On a pro forma basis, however, broadcast cash flow was down 0.2 percent.

Analyst William Meyers of BancBoston Robertson Stephens in New York said Sinclair was showing stronger revenue numbers than the industry as a whole. "I thought they had a great quarter, given a very challenging broadcasting environment," Meyers said.

The earnings report was released after the close of markets yesterday. During the day, Sinclair's stock went up 12.5 cents, finishing at $17.625.

On Monday evening, Sinclair announced that it was giving up its radio holdings, selling 43 stations in nine markets to Entercom Communications Corp. for $821.5 million. Sinclair's remaining 10 radio stations will probably all be sold soon, the company said.

Analysts have applauded Sinclair's decision to get out of radio, saying it will allow the company to focus on the highly competitive television-broadcasting market and pare down the large debt it has accumulated after a long string of station acquisitions.

As it did when it reported its first-quarter earnings in April, Sinclair said acquisitions completed late last year, including its purchases of Sullivan Broadcast Holdings Inc. and Max Media Properties LLC, were the primary drivers of the quarterly boosts in revenue and cash flow.

However, such buys have come at a cost. The company's debt rose during the second quarter to $2.4 billion.

Sinclair Treasurer Patrick J. Talamantes said the company will be $1.8 billion in the red after the close of the Entercom deal, which is expected to take place sometime around the end of the year.

Pub Date: 7/30/99

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