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Gray Television Cuts Losses in 2009

ATLANTA: After a rough month in which Gray Television narrowly diverted default, the broadcast group posted reduced losses for the fourth quarter of 2009 and the full year.

Gray’s full-year loss was $40.2 million, or 83 cents a share, compared to $208.6 million or $4.32 a share in 2008. Full-year revenues were $270.4 million, down 17 percent on reduced local, national, political and Internet ad revenues. Political alone was down 79 percent to $10 million.

For 4Q09, Gray posted a net loss of $6.5 million compared to $206 million in 4Q08, when it took a $338.7 million impairment charge on broadcast licenses.

The hefty impairment wasn’t the sole source of Gray’s reduced losses. The company’s 4Q09 $6.5 million loss is down from a 3Q09 loss of nearly $10 million. Revenues for the fourth quarter totaled $77.5 million, down 18 percent from a year earlier, though up from $66.4 million in the third quarter.

Details for 4Q09 include:
Local revenue up 5 percent to $47.1 million.
National revenue down 1 percent to $15.9 million.
Internet revenue flat at $3.2 million.
Political revenue down 82, percent to $5 million.
Retransmission revenue up 346 percent to $3.7 million.
Production and other revenue down 10 percent to $1.9 million.
Consulting revenue from the Young Broadcasting agreement totaled $600,000.

Details for the full year:
Local fell 8 percent to $170.8 million.
National fell 21 percent to $53.9 million.
Internet revenue dropped 4 percent to $11.4 million.
Political fell 79 percent to $10 million.
Retransmission grew fourfold to $15.6 million.
Production and other revenue fell 13 percent to $7.1 million.
Young Broadcasting yielded $900,000.

Gray ended the year with $16 million in cash and $791.8 million in long-term debt. The company owns 36 TV stations and runs 10 Young Broadcasting stations that ended up in the hands of that company’s senior lenders following a bankruptcy last year.

Gray warned of default last month and then averted it by renegotiating terms on its senior credit facility. The company issued guidance for the quarter just ending March 31 of a 14 percent increase in revenues to $70 million, with political contributing $2.8 million, up 178 percent from 1Q09. Local is expected to be up 11 percent, and national, sans political, is tracking up by 9 percent. Retrans revenues are expected to total $4.5 million, up by $900,000.

Despite the increases, Gray missed estimates from Reuters analysts, who anticipated first-quarter revenues of $72.3 million. The stock was unaffected by the potential miss, however, jumping 10 percent to $2.71 in mid-afternoon trading. -- Deborah D. McAdams

More on Gray: 
March 31, 2010: Gray Television Avoids Default
Among other parameters, the amendment resets the leverage ratio at 9x for the quarter ending March 31. The previous ratio was 8.75x, set to drop today to 7x. Gray warned March 15 that it would likely default at that factor.

March 15, 2010: Gray Warns of Default
Gray Television today warned that it would likely fall out of leverage compliance at the end of the month.

November 9, 2009: “Gray Swings to $10 Million Loss
Gray Television shares dropped 20 percent this morning after the broadcaster reported a third-quarter loss of nearly $10 million.

October 15, 2009:Gray Increases Guidance for 3Q
Gray Television, expects third-quarter results will be better than previously anticipated.

October 1, 2009:Gray Regains NYSE Compliance
Gray was notified last Nov. 4 that the price of its common stock was trading beneath the Exchange’s required minimum

September 3, 2009:Gray Conducts Successful Mobile DTV Tests
Gray said it commenced its first successful mobile DTV signal at WOWT-TV, its NBC affiliate in Omaha, Nebr., on July 24.

August 10, 2009:Gray’s 2Q Reflects Off-political Year
Gray posted a net loss of $6.6 million on revenues of $65 million for the three months ending June 30.

July 22, 2009:Gray Tapped to Run Reorganized Young Stations
Gray Television will run the 10 TV stations that went to senior lenders in the Young Broadcasting bankruptcy.

May 8, 2009: “Gray Television Revenues Drop 14 Percent
Revenues at Gray Television’s 36 TV stations were down 14 percent to $61.4 million compared to $71 million in 1Q08.

March 16, 2009:Gray Posts Loss on $339 Million Impairment
Gray posted full-year revenues of $327 million, up 6 percent from 2007. Revenues for 4Q08 totaled $94.8 million, up 12 percent from the same period a year previous.

February 9, 2009��: “Gray TV Stations Get Click-through Technology
Gray Television will launched interactive TV technology from Backchannelmedia, a Boston-based firm specializing in TV click-throughs.

December 30, 2008:Gray Expects $11 Million From Retrans in ’09
Gray Television announced that it has reached agreements “in principle” with 27 cable operators comprising 3.3 million subscribers.

November 26, 2008:Gray TV Executes Repurchase
Gray Television has repurchased 883,200 shares of its own common stock at 20 cents per plus commission.

July 16, 2008:Gray Television Issues $25 Million in Stock
Gray Television issued $25 million worth of Series D preferred stock in a private placement to make a prepayment on its outstanding term loan.

July 2, 2008: “Gray Television Puts $65 Million Toward Debt
Gray Television made a voluntary $65 million payment on an outstanding loan on June 26.