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
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March 15, 2010: Gray Warns of Default
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November 9, 2009: “Gray Swings to $10 Million Loss
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October 15, 2009:Gray Increases Guidance for 3Q
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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
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August 10, 2009:Gray’s 2Q Reflects Off-political Year
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July 22, 2009:Gray Tapped to Run Reorganized Young Stations
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May 8, 2009: “Gray Television Revenues Drop 14 Percent
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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
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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
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July 16, 2008:Gray Television Issues $25 Million in Stock
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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.