LIN TV Corp.
Q2 2010 Earnings Call Transcript
July 22, 2010 9:15 am ET
Vince Sadusky – President and CEO
Scott Blumenthal – EVP, Television
Rich Schmaeling – SVP and CFO
Marci Ryvicker – Wells Fargo Securities
Avi Steiner – J.P. Morgan
Jonathan Levine – Jefferies
Aaron Watts – Deutsche Bank
Harry Dumont – Knighthead Capital Management
Edward Atorino – Benchmark
Bishop Cheen – Wells Fargo
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Good morning, ladies and gentlemen and welcome to Lin TV Corporation earnings call for the second quarter ended June 30, 2010. Today’s call is being recorded. Before we introduce the speakers, I will read a brief legal statement from the company.
This conference call may include statements that constitute forward-looking statements particularly in the area described as business outlook but also including any other statements of future business prospects or financial results including but not limited to the use of the words like believe, expect, estimate, project or other similar expression. Forward-looking statements inherently involve risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements.
Factors that could contribute to such differences include the risks detailed in the company's annual report on form 10-K and other filings made with the Securities & Exchange Commission, which are available on the company's website, www.linmedia.com in the investor relations section or at www.sec.gov which discussions are incorporated in this release by reference.
Lin TV Corporation undertakes no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events or otherwise, unless otherwise required to by ethical law.
At this time, I will turn the call over to Lin TV Corporation's President and Chief Executive Officer, Mr. Vince Sadusky.
Thank you. Good morning and welcome to our second quarter 2010 conference call. I will begin with a brief review of our results and achievements. Scott Blumenthal, our Executive Vice President of television will update you on station operations and Rich Schmaeling, our Chief Financial Officer will provide financial results and guidance.
We had a terrific revenue in operating income growth in the second quarter of 2010 delivering results that were consistent with our guidance. Net revenues increased 21% in the second quarter to $99.5 million compared to $82.5 million for the same quarter in 2009.
As a result, operating income grew 78%, excluding the non-cash impairment charge we took in the second quarter of 2009. We continue to experience a recovery in core TV advertising revenues.
National advertising is rebounding more rapidly than local advertising, especially in our largest markets. Nine of our top 10 categories grew from the second quarter of 2009. Our most significant category, automotive, was up 51% from the second quarter of 2009.
We believe that our commitment to localism continues to build brand loyalty and differentiate us from our competition. We are one of the few local broadcasters to have increased the amount of local productions during the recession offering high quality, local programs that are customized and unique to each market.
Given the strength of our local television stations, May resulted in another great rating book. We are either number one or number two in all of our news markets based on key demos in late news. In addition, 94% of our news markets are number one or number two in key demos in early news.
We are particularly pleased with the growth of our digital business. In the second quarter, digital revenues increased 44% compared to the same quarter last year. Digital revenues now make up 15% of our total revenue and continue to be the fastest-growing portion of our business.
It is exciting to see how well we are monetizing our Internet properties. In the second quarter, Internet advertising and other interactive revenues increased 164% compared to the same quarter last year.
These results include incremental revenue from our acquisition of RMM. Our investment in RMM has provided numerous synergy opportunities. Through cross training and development our multiplatform salesforce has teamed up with RMMs online salesforce and media analyst to expand the scope of our offerings beyond our traditional markets.
All of our station's are now marketing RMM's innovative and targeted products including custom display, vertical display, search and e-mail marketing solutions and categories such as travel and tourism, database, financial automotive, healthcare and education.
Our multiplatform contents indication has been a major focus area. In the second quarter, our stations internally shared more than 8,000 stories with other Lin stations and externally syndicated video which delivered more than 27 million impressions in the second quarter of 2010.
I am pleased to announce we are now number one or number two in all of our local markets that Comscore measured in June 2010 for the average time spend on site. In the second quarter, average time on-site was over 20 minutes.
In addition, 94% of our markets measured by Comscore in June are number one or number two for unique visitors. The Comscore rankings are in comparison to our local broadcast competitors. This is a major accomplishment and a credit to the focus and effort of Lin's digital team.
In addition to our competitive success, we delivered 6.5 million video views and engaged 38 million total daily unique visitors on our stations websites in the second quarter of 2010. We are committed to being ahead of the curve through continuous product innovation.
Last month, we were the first in our local markets to launch android application. In addition, we unveiled a new and enhanced version of our iPhone application that includes technology that allows people to share their stories and participate in the news-gathering process.