LIN TV Corp. Announces First Quarter 2008 Results

LIN TV Corp. (NYSE: TVL) today reported results for the first quarter ended March 31, 2008.

Income from continuing operations for the three months ended March 31, 2008 increased by $2.5 million, to $0.9 million, compared to a loss from continuing operations of $1.6 million in the first quarter of 2007. The growth in income from continuing operations was primarily driven by higher digital and political revenues and lower interest expense due to declining debt balances.

Commenting on the first quarter, LIN TV’s President and Chief Executive Officer Vincent L. Sadusky said: “We are very pleased to report that our net revenues grew 1%, despite the industry-wide weakness in local advertising and this included a 100% increase in our digital revenues versus the prior year. We attribute this growth to the successful execution of our digital strategy and new business development efforts, as well as political revenues generated by our leading news stations. In addition, we strengthened our balance sheet by paying-off $22 million of debt during the quarter. Looking ahead, we continue to focus on the fundamentals of our business, including expense management and further maximizing our digital opportunities during a difficult economic environment.”

First Quarter 2008 Compared to First Quarter 2007

Net revenues for the three months ended March 31, 2008 increased 1% to $93.1 million, compared to $91.8 million for the same period in 2007. The increase was primarily due to higher political advertising in this election year of $3.2 million, compared to $0.6 million for the prior year period, and to higher digital revenues. Digital revenues, which include Internet advertising revenues and retransmission consent fees, increased $2.4 million or 100% to $4.9 million, compared to $2.5 million in the same period last year. These increases were partially offset by lower core advertising revenues, which include local and national advertising, but exclude political advertising. LIN TV’s core advertising revenues declined 3% for the first quarter of 2008 due to the TV advertising marketplace decline in LIN TV’s markets.

General operating expenses for the three months ended March 31, 2008 increased 3% to $69.8 million, compared to $67.7 million for the same period in 2007. The increase was primarily due to employee and other operating cost increases.

Operating income for the three months ended March 31, 2008 was $15.6 million, which was flat compared to operating income for the same period in 2007. Net income for the three months ended March 31, 2008 was $1.5 million, compared to net income of $20.7 million for the same period last year. Diluted earnings per share for the three months ended March 31, 2008 were $0.03 compared to $0.42 for the same period in 2007. The decrease in net income and earnings per share from the prior year was primarily due to a $23.1 million or $0.47 per share gain from the sale of the Company’s Puerto Rico operations that occurred in the first quarter of 2007.

Operating Highlights

TV Station Ratings and Revenue

• According to Nielsen’s February ratings reports, LIN TV’s stations ranked #1 or #2 for weekdays sign-on to sign-off in 82% of its markets. Most of the Company’s CBS, NBC, ABC and FOX stations were once again ranked number one for adults 18-49 and adults 25-54. The Nielsen data also showed that the Company’s stations outperform the national networks in the category of household share by an average of 32%.
• Local advertising revenues, which exclude political advertising, decreased 3% for the first quarter of 2008 compared to the same period in 2007. The decrease is due to the TV advertising marketplace decline in LIN TV’s markets resulting from general economic pressure now impacting a number of local economies, primarily in the housing, automobile and retail segments. Local advertising revenues represented 65% of total advertising revenues for the first quarter of 2008.
• National advertising revenues, which exclude political advertising, decreased 3% for the first quarter compared to the same period in 2007. The decrease is also due to the TV advertising marketplace decline in LIN TV’s markets, which has impacted most national advertising categories, particularly automotive spending. National advertising revenues represented 32% of total advertising revenues for the first quarter of 2008.
• Core local and national advertising revenues combined, which excludes political advertising, decreased 3% for the first quarter compared to the same period in 2007.
• Advertising categories that decreased for the first quarter of 2008 were automotive, retail, restaurants, services, medical, education and grocery. Advertising categories that increased for the first quarter of 2008 included political, media/telecommunications, insurance/financial services, and health/beauty. The automotive category, which represents 23% of the Company’s core advertising revenues for the first quarter of 2008, decreased 5% compared to the same quarter last year.
• The Company’s political advertising revenues were $3.2 million for the first quarter of 2008, compared to $0.6 million in the same period last year. Political advertising revenues represented 3% of total advertising revenues for the first quarter of 2008.

Digital and Interactive Initiatives

• Retransmission consent fees increased 119% in the first quarter of 2008 compared to the same quarter last year. During the first quarter of 2008 the Company reached new retransmission consent agreements for both its analog and high-definition channels with five companies, including Cable One, Inc., Cequel III Programming, LLC (dba Suddenlink Communications) and DISH Network L.L.C. The agreement with DISH Network contains an important marketing and promotional partnership that offers substantial incentives for consumers to switch to DISH if our local stations are removed from a local cable system in any of our 17 markets.

• Internet advertising and other interactive revenues increased 71% for the first quarter of 2008 compared to the same quarter last year. Total page views for the Company’s web sites were 163.2 million in the first quarter of 2008, compared to 117.8 million in the first quarter of 2007, representing a 39% increase. Unique Visitors for the Company’s web sites were 18.2 million in the first quarter of 2008, compared to 12.8 million in the first quarter of 2007, representing a 42% increase. Time spent on the Company’s web sites increased 100% to an average of nearly 10 minutes per visit and the web sites had more than 10 million video impressions in the first quarter of 2008. According to data released by Hitwise in March 2008, the majority of LIN TV’s web sites are the top television web sites in their local markets and many are also the top local media sites. The Company attributes this continued traffic growth and increased time spent on its web sites to new initiatives, partnerships and web products that offer users continuous breaking news and rich-media content from its market-leading news and entertainment focused TV stations.
• LIN TV launched unique new political web sites in each of its 17 markets ahead of Super Tuesday’s elections held on February 5, 2008. LIN Interactive’s politics.tv web sites were designed to be community hubs and the primary resources for political news and in-depth coverage of local, regional, and national political races and to provide viewers with the most complete, non-partisan coverage of politics in their local markets. LIN TV owns all of the politics.tv domain names in each of the 50 states as well as the top DMA’s. LIN TV’s politics.tv websites have produced over 1 million page views since they were launched.

Key Balance Sheet and Cash Flow Items

Total debt outstanding on March 31, 2008 was $812.2 million. Cash and cash equivalent balances at March 31, 2008 were $41.9 million. The Company repaid $22.1 million of its term loan balances from excess cash during the quarter ended March 31, 2008. The Company’s revolving credit facility balance remained at zero as of March 31, 2008 and $275.0 million was available for borrowing under that facility. Consolidated leverage, as defined in the Company’s credit agreement, was approximately 6.3x as of March 31, 2008 compared to 6.5x as of December 31, 2007. Other components of cash flow for the first quarter of 2008 were cash capital expenditures of $1.7 million and cash payments for programming of $7.0 million.

2.5% Exchangeable Senior Subordinated Debentures Purchase Notice and Draw-Down of Revolving Credit Facility to Fund Purchases

On April 14, 2008, the Company provided notice to holders of its 2.5% Exchangeable Senior Subordinated Debentures (“the debentures”) through Bank of New York (“the trustee”) and Depository Trust Company (“DTC”), that these holders have the right to require the Company to purchase their debentures at 100% of the principal amount, if the holders’ written purchase notice(s) are tendered to the trustee by close on business May 15, 2008.

On May 16, 2008, the Company is required to fund the purchase of the total amount of debentures tendered. In preparation for the funding, on May 7, 2008 the Company borrowed $115.0 million of its $275.0 million available revolving credit facility and will use these proceeds, along with operating cash balances, to fund the debenture purchases. There will be no impact on the Company’s consolidated leverage as a result of the borrowings under the revolving credit facility, which bear interest at LIBOR plus 1.375%. The Company expects to use its cash flow generated from operations to continue to pay-down its term loans and revolving credit balance under its credit facility.

Business Outlook

The results presented in this release, including all of the amounts discussed in this Business Outlook section, reflect the classification of the operations of Banks Broadcasting, Inc. and the Puerto Rico operations as discontinued operations for all periods presented. The Company has provided historical quarterly financial information for its continuing operations on its web site. Interested parties should go to www.lintv.com and in the “Investor Relations” section, click on “Financial Reports & Releases” and “Supplemental Financial Data”.

Based on current sales order pacings, which reflect the challenging economic environment and market decline for both local and national advertising spending, the Company currently expects that second quarter 2008 net revenues will increase in the range of 1% to 3% (or $1.4 million to $3.4 million), compared to reported net revenues of $101.8 million for the second quarter of 2007. All of this expected increase is attributable to projected political and digital revenue growth.

The Company also expects that its station direct operating and SG&A expenses will increase in the range of 1.0% to 2.0% (or $0.4 million to $1.4 million) for the second quarter of 2008 compared to reported expenses of $57.8 million for the second quarter of 2007. The Company’s current outlook for revenues, expenses and cash flow items for the second quarter and full year 2008 are anticipated to be in the following ranges:

LIN TV advises that all of the information and factors set forth above are subject to risk (see the “Forward Looking Statements” heading below) and could therefore individually or collectively cause actual results to differ materially from those projected above.

Conference Call

LIN TV will hold a conference call to discuss its first quarter results today, Thursday, May 8, 2008, at 8:30 AM Eastern Time. To participate in the call, please call 1-888-596-2611 (U.S. callers) or 1-913-312-1448 (international callers) at least 10 minutes prior to the scheduled start of the call and use the passcode 4088575. The conference call will also be webcast simultaneously from LIN TV Corp.’s web site, www.lintv.com, and can be accessed there through a link on the home page (under the “Latest News” section).

For those unavailable to participate in the live teleconference, a replay can be accessed via the Investor Relations section of www.lintv.com or by dialing 1-888-203-1112 and entering the same passcode as above. The telephone replay will be available through May 22, 2008.

Access to Non-GAAP Financial Measures and Other Supplemental Financial Data

The Company reports and discusses its operating results using financial measures consistent with generally accepted accounting principles (GAAP) and believes this should be the primary basis for evaluating its performance. Non-GAAP financial measures such as Broadcast Cash Flow (BCF), Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and Free Cash Flow (FCF) should not be viewed as alternatives or substitutes for GAAP reporting. However, BCF, Adjusted EBITDA and FCF are common suppleme