Media General, Inc. (NYSE: MEG), a local broadcast television and digital media company, today reported second-quarter 2014 results.
“We’re pleased to report our second full quarter of results for the combined Media General and Young Broadcasting, which merged on November 12, 2013. It was another outstanding quarter. As we promised when the Young transaction was announced, we’re generating meaningful incremental free cash flow and reducing debt,” said George L. Mahoney, president and chief executive officer of Media General.
“Comparing combined results for the second quarter of this year and last year, we generated very strong increases for net operating revenue, operating income, net income, Broadcast Cash Flow, EBITDA and Free Cash Flow,” said Mr. Mahoney. “Net operating revenue increased nearly 12%, driven by higher Political, Retransmission, Digital and Local revenues and despite lower National revenues. Our revenue growth and expense management were the key drivers of our 20% increase in Broadcast Cash Flow and our 39% increase in adjusted EBITDA. Free Cash Flow was nearly $23 million this year compared to a $5 million deficit in last year’s second quarter. Additionally of note in the quarter was significantly lower interest expense, which was $9.6 million this year compared to $21.6 million on a combined basis in the second quarter of last year,” said Mr. Mahoney.
“Today we’re announcing an additional $5 million of expected operating savings as part of our ongoing efforts to manage costs for 2015,” added Mr. Mahoney. “When we originally announced the Young transaction, we said we’d deliver $15 million of operating synergies within 12-15 months. In April, we added $10 million of synergies. We continue to benefit from our increased scale. Our total operating synergies related to the Young merger for 2015 now exceed $30 million, more than double our original estimate. Today’s announced savings are mainly for reduced health care costs, relative to what we’d anticipated for 2015, and are principally from more favorable negotiated rates with providers based on our increased scale. This $5 million figure also includes additional synergies at the corporate and station levels, mostly from newly renegotiated contracts and reengineering,” said Mr. Mahoney.