IRVING, Texas–(BUSINESS WIRE)–Nexstar Media Group, Inc. (NASDAQ: NXST) today reported financial results for the fourth quarter and year ended December 31, 2023 as summarized below:
Summary 2023 Fourth Quarter and Full Year Highlights
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NEXSTAR – CONSOLIDATED(1) |
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Three Months Ended December 31, |
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% |
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Year Ended December 31, |
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% |
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($ in millions) |
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2023 |
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2022 |
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Change |
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2023 |
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2022 |
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Change |
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Core Advertising Revenue |
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$ |
449 |
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$ |
477 |
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(5.9 |
) |
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$ |
1,660 |
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$ |
1,718 |
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(3.4 |
) |
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Political Advertising Revenue |
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30 |
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266 |
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(88.7 |
) |
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66 |
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506 |
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(87.0 |
) |
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Total Television Advertising Revenue |
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$ |
479 |
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$ |
743 |
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(35.5 |
) |
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$ |
1,726 |
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$ |
2,224 |
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(22.4 |
) |
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Distribution Revenue |
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704 |
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616 |
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+14.3 |
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2,727 |
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2,571 |
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+6.1 |
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Digital Revenue |
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106 |
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112 |
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(5.4 |
) |
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395 |
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365 |
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+8.2 |
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Other Revenue |
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15 |
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16 |
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(6.3 |
) |
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85 |
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51 |
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+66.7 |
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Net Revenue |
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$ |
1,304 |
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$ |
1,487 |
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(12.3 |
) |
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$ |
4,933 |
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$ |
5,211 |
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(5.3 |
) |
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Income from Operations |
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$ |
230 |
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$ |
294 |
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(21.8 |
) |
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$ |
708 |
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$ |
1,312 |
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(46.0 |
) |
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Net Income |
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$ |
100 |
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$ |
178 |
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(43.8 |
) |
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$ |
270 |
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$ |
943 |
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(71.4 |
) |
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Adjusted EBITDA(2), (3) |
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$ |
411 |
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$ |
598 |
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(31.3 |
) |
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$ |
1,469 |
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$ |
2,223 |
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(33.9 |
) |
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Adjusted EBITDA Margin(4) |
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31.5 |
% |
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40.2 |
% |
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29.8 |
% |
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42.7 |
% |
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Attributable Free Cash Flow(2), (3) |
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$ |
265 |
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$ |
422 |
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(37.2 |
) |
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$ |
847 |
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$ |
1,502 |
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(43.6 |
) |
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NEXSTAR – EXCLUDING THE CW NETWORK, LLC (“Nexstar, Ex-The CW”)(1) |
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Net Revenue |
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$ |
1,261 |
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$ |
1,425 |
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(11.5 |
) |
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$ |
4,710 |
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$ |
5,149 |
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(8.5 |
) |
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Adjusted EBITDA(2), (3) |
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$ |
461 |
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$ |
662 |
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(30.4 |
) |
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$ |
1,726 |
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$ |
2,287 |
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(24.5 |
) |
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Adjusted EBITDA Margin(4) |
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36.6 |
% |
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46.5 |
% |
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36.6 |
% |
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44.4 |
% |
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Free Cash Flow(2), (3) |
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$ |
295 |
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$ |
458 |
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(35.6 |
) |
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$ |
1,000 |
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$ |
1,538 |
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(35.0 |
) |
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- On September 30, 2022, Nexstar completed its acquisition of a 75% ownership interest in The CW Network, LLC (“The CW”). Nexstar – Consolidated refers to all of the Company’s operations while Nexstar, Ex-The CW refers to the Consolidated results without The CW operations and eliminations. Management believes this presentation to be useful to investors as an indicator of our assets’ operating performance as we are undertaking initiatives to improve the profitability of The CW. See the “Definitions and Disclosures Regarding Non-GAAP Financial Information” section of this press release for more information.
- Definitions and disclosures regarding non-GAAP financial information including reconciliations are included at the end of the press release.
- For the year ended December 31, 2023, these metrics exclude the portion of our distribution from Television Food Network, G.P. (“TV Food Network”) related to the net proceeds of an accounts receivable securitization.
- Adjusted EBITDA margin is Adjusted EBITDA as a percentage of net revenue.
CEO Comment
Perry A. Sook, Nexstar’s Chairman and Chief Executive Officer, commented, “Nexstar’s fourth quarter financial results outperformed consensus expectations in key financial metrics including Adjusted EBITDA and Attributable Free Cash Flow. Our 2023 results extend Nexstar’s long record of consistently generating substantial free cash flow, and we expect that trend to continue. To that end, in January we announced an increase in our annual dividend by 25%, our thirteenth consecutive increase.
“The power of the broadcast model and its ability to reach the largest audience of any medium with important news, sports and entertainment content is as strong as ever, reflected by the record audience delivery for NFL and Super Bowl, Grammys and other live sports and event programming. Validating the enduring strength, reach and appeal of broadcast, during the fourth quarter we successfully completed all of our remaining distribution negotiations without interruption, as our distribution partners, their customers and our audience value the highest-rated broadcast and fastest-growing cable news network programming we provide. The completion of these and other recent distribution agreements provide solid visibility for our distribution revenues in 2024 and beyond. As we move into 2024, an election year, we look forward to once again demonstrating the value of broadcast television to candidates and campaigns looking to communicate to the electorate through political advertising on television.
“Our strong financial track record supports our commitment to shareholder returns and the enhancement of shareholder value. On average, for the 2022/2023 cycle, Nexstar generated $1.8 billion of Adjusted EBITDA and $1.2 billion of Attributable Free Cash Flow. Over that time frame, we returned an average of $910 million each year to shareholders in the form of dividends and share repurchases, representing approximately 77% of our average Attributable Free Cash Flow. We expect to continue to use our cash flow to maximize shareholder returns.”
Fourth Quarter and Full Year 2023 Operational Highlights
- Successfully renewed distribution agreements representing more than 40% of our subscriber base on terms favorable to the Company, positioning Nexstar to deliver further annual distribution revenue growth.
- Renewed and extended multi-year affiliation agreements with the Fox Network, MyNetworkTV and The CW Network.
- Launched CW Network affiliations on Nexstar owned and operated television stations in five markets, including three of the nation’s top-15 television markets, bringing the number of Nexstar and partner-owned CW affiliates to 45, covering more than 39% of U.S. TV Households.
- Expanded and extended CW Network affiliation agreements with several broadcast affiliate partners.
- Secured or extended exclusive broadcast rights for The CW Network to WWE NXT, LIV Golf, Atlantic Coast Conference (ACC) college football and basketball games, and NASCAR Xfinity Series.
- NewsNation marked a major cable news milestone by becoming a 24/5 news network and remains America’s fastest growing cable news network in primetime.
- NewsNation hosted the final GOP Presidential primary debate before the Iowa caucuses, which was simulcast on The CW. The event delivered more than 4 million combined viewers with NewsNation garnering the largest audience in its three-year history, and the CW simulcast representing the most watched primetime program on the network since 2018.
- Completed first upfront as a consolidated entity for all Nexstar national properties including NewsNation, The CW, Antenna TV, and The Hill adding 47 new advertisers across these platforms.
- Led the industry in deployment of ATSC 3.0, or NextGen TV, with more than 58 million U.S. television households now receiving a NextGen TV signal from a Nexstar-owned or partner station.
- Closed the acquisitions of KUSI-TV, an independent station and local news powerhouse in San Diego, CA, the nation’s 30th largest television market, and WSNN-LD, a MyNetworkTV affiliated low power television station serving the Tampa, FL market.
Fourth Quarter 2023 Financial Highlights
- Fourth quarter net revenue of $1.3 billion compared to $1.5 billion in the prior year quarter.
- The net revenue comparison primarily reflects the year-over-year decline in cyclical political advertising, offset, in part, by growth in our distribution revenue.
- Excluding political advertising revenue, net revenue increased 4.3% year-over-year.
- Approximately 55% of Nexstar’s fourth quarter revenue was generated by distribution and other revenue streams.
- Fourth quarter core advertising revenue of approximately $449 million decreased 5.9% year-over-year.
- Core television advertising was impacted by continued softness in the advertising market.
- Fourth quarter political advertising revenue of approximately $30 million compared to $266 million in the prior year.
- The reduction in political television advertising was due to the lack of material election activity in odd years.
- Record fourth quarter distribution revenue of approximately $704 million increased 14.3% versus prior year.
- Distribution revenue growth was driven by the renewal of the substantial majority of our distribution agreements in 2022 and 2023 on improved terms and annual rate escalators, as well as growth in virtual MVPD revenue, offset, in part, by continued MVPD subscriber attrition and the removal of partner stations from certain MVPDs.
- Fourth quarter digital revenue of approximately $106 million decreased 5.4% year-over-year.
- Digital revenue was primarily impacted by weakness in national digital advertising, partially offset by year-over-year increases in Nexstar’s local digital advertising revenue and agency services business and ecommerce.
- On a consolidated basis, fourth quarter Adjusted EBITDA was $411 million, representing a 31.5% margin, and fourth quarter attributable free cash flow was $265 million.
- Fourth quarter Adjusted EBITDA was primarily impacted by the reduction in net revenue year-over-year.
- Excluding The CW Network, fourth quarter Adjusted EBITDA was $461 million.
- In the fourth quarter of 2023, the Company used cash on hand and cash flow from operations to:
- Return $137 million to shareholders through the repurchase of 629,469 shares of Nexstar’s common stock at an average price of approximately $145.13 per share for a total of $91 million (excluding $5 million that was used to repurchase stock in September and settled in October), and quarterly cash dividend payments of $46 million;
- Reduce debt by approximately $32 million.
Debt and Leverage Review
- The consolidated debt of Nexstar and Mission Broadcasting, Inc. (“Mission”), an independently owned variable interest entity, at December 31, 2023 was $6.84 billion, including senior secured debt of $4.13 billion.
- The Company calculates its leverage ratios in accordance with the terms of its credit agreements which ratios only include Nexstar, excluding The CW Network’s operations and cash balance. As of December 31, 2023, The CW Network had $52 million of cash on its balance sheet.
- The Company’s first lien net leverage ratio at December 31, 2023 was 2.25x compared to a covenant of 4.25x.
- The Company’s total net leverage ratio at December 31, 2023 was 3.76x.
The table below summarizes the Company’s debt obligations (net of financing costs, discounts and/or premiums).
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($ in millions) |
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December 31, 2023 |
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December 31, 2022 |
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Revolving Credit Facilities |
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$ |
62 |
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$ |
62 |
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First Lien Term Loans |
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4,064 |
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4,178 |
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5.625% Senior Unsecured Notes due 2027 |
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1,717 |
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1,718 |
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4.75% Senior Unsecured Notes due 2028 |
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|
994 |
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|
993 |
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Total Outstanding Debt |
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$ |
6,837 |
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$ |
6,951 |
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Unrestricted Cash |
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$ |
135 |
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$ |
204 |
Full-Year 2024 Guidance
Based on our current outlook, we are establishing guidance for fiscal 2024 Adjusted EBITDA in a range of $2.085 billion to $2.195 billion.
Key factors differing from our current expectations could affect our outlook for Adjusted EBITDA for 2024 either positively or negatively. Those factors include, among other things, the amount of political fundraising and spend on television advertising in our markets, the rate of growth or attrition of pay television subscribers, the health of the local and national advertising markets, the ability to renegotiate affiliation agreements on favorable terms, and the level of distributions related to our 31.3% ownership stake in TV Food Network.
About Nexstar Media Group, Inc.
Nexstar Media Group, Inc. (NASDAQ: NXST) is a leading diversified media company that produces and distributes engaging local and national news, sports and entertainment content across its television and digital platforms, including more than 310,000 hours of programming produced annually by its business units. Nexstar owns America’s largest local television broadcasting group comprised of top network affiliates, with over 200 owned or partner stations in 117 U.S. markets reaching 220 million people. Nexstar’s national television properties include The CW, America’s fifth major broadcast network, NewsNation, America’s fastest-growing national cable news network, popular entertainment multicast networks Antenna TV and Rewind TV, and a 31.3% ownership stake in TV Food Network. The Company’s portfolio of digital assets, including its local TV station websites, The Hill and NewsNationNow.com, are collectively a Top 10 U.S. digital news and information property. For more information, please visit nexstar.tv.
