LIN TV Corp. (TVL)
Q2 2008 Earnings Call Transcript
August 5, 2008 8:30 am ET
Vincent Sadusky – President & CEO
Scott Blumenthal – EVP of Television
Bart Catalane – SVP & CFO
Marci Ryvicker – Wachovia Securities
Kit Spring – Stifel Nicolaus
Aaron Watts – Deutsche Bank
Bishop Cheen – Wachovia Securities
Edward Atorino – Benchmark Capital
Tracy Young – JP Morgan
Previous Statements by TVL
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Before we introduce today's 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 is business outlook, but also including any other statements of future business prospects or financial results, including, but not limited to the use of words like “believe,” “expect,” “estimate,” “project,” or other similar expressions.
Forward-looking statements inherently involve risks and uncertainties including, among other factors, general economic conditions, demand for advertising, competition for audience and programming, government regulations, and new technologies that could cause our actual results to differ materially from the forward-looking statements.
Factors that could contribute to such differences include the risk detailed in the company's annual report on Form 10-K and other filings made with the Securities and Exchange Commission, which are available on the company's Web site, www.LIN TV.com in the investor relations section, or at www.sec.gov, which discussions are incorporated in this release by reference.
LIN TV 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 applicable law.
At this time I would turn the call over to LIN TV's President and Chief Executive Officer, Mr. Vincent Sadusky. Please go ahead.
Thank you, operator. Good morning, everyone. And welcome to LIN TV's 2008 second quarter conference call. I'll start with an overview of our second quarter results as well as digital and interactive highlights. Scott Blumenthal, our Executive Vice President of Television will update you on station ratings and operations. And finally, Bart Catalane, our Senior Vice President and Chief Financial Officer will provide second quarter financial information and close with our current 2008 business outlook. After that, we'll be happy to take your questions.
You may have read that Gregg Schmidt, LIN TV's Executive Vice President of Digital Media since 2006, will be leaving the company to become Chief Executive Officer of Global Translation, Inc., a company in which LIN TV has an investment. We wish Gregg all the very best in his new challenge and we will continue to execute on our digital strategy with LIN's excellent new media team.
In addition, Bart Catalane will be moving back to New York where his family is located, to become Chief Financial Officer of Webloyalty.com. We are actively looking for a replacement. In the meantime, I will be acting CFO, so please don't hesitate to contact me with any financial related questions.
Given the state of the economy we were pleased to grow net revenues by 2% in the second quarter of 2008, and deliver one of the strongest performances in our industry. Our growth in net revenues is primarily result of political revenues increasing by $7.2 million versus last year to a total of $8.1 million for the second quarter of 2008, and digital revenues increasing 100% from the same period last year to $6.7 million in the second quarter of 2008. These are outstanding achievements for our company.
The increase in political revenues is largely the result of LIN TV's top performing local newscasts and politicians continued desire to want to advertise in an effective medium like local news. I am also very proud of our digital team and their ability to execute our strategy and continue to grow digital revenues, and I'll talk more about that in a moment.
Partially offsetting our increases in political and digital revenues was a 7% decrease in core advertising revenues, which includes local and national advertising, but excludes political.
Despite the core advertising revenue decline, our local stations are performing well over all in this difficult ad market. LIN TV's total advertising revenue including political revenue decreased by less than 1%, while the industry average reported in the June Television Bureau of Advertising's monthly group time sales survey was down 8% for the quarter.
Scott will talk more about the economy's impact on advertising categories in a few minutes.
Loss from continuing operations increased $219.9 million to $215.8 million in the second quarter of 2008, primarily due to a non-cash impairment charge of $297 million, related to the company's broadcast licenses and goodwill. Right now, we are faced with the reality of a weak economy and a volatile stock price and we expect these economic pressures to continue into 2009, and these were among the key factors driving the second quarter impairment charge.
However, the entire company remains committed to our ongoing cost discipline program and as a result we were able to maintain general operating expenses flat for the second quarter of 2008 compared to the same quarter in 2007, which is another strong achievement for the quarter that helped drive year-on-year BCF and EBITDA growth.
I want to expand a little more on some of the things we're doing and looking at the digital and interactive areas to drive continued growth there. As mentioned in our last conference call, we continue to focus on the fundamentals of selling and maximizing our new business development efforts so that when the marketplace rebounds we will be positioned to capitalize on that upturn.