Sinclair, Inc. · NASDAQ:SBGI
Sinclair — Q4 2021 Earnings Presentation
16 slides from Sinclair's earnings presentation, Feb 23, 2022
Slide 1: Fourth Quarter 2021 Conference Call
Fourth Quarter 2021 Conference Call F e b r u a r y 2 3 , 2 0 2 2 Chris Ripley President & Chief Executive Officer Lucy Rutishauser EVP, Chief Financial Officer Rob Weisbord Chief Operating Officer President of Broadcast 1
Slide 2: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES This presentation contains certain financial measures, including Adjusted EBITDA and Adjusted Free Cash Flow, which are not prepared in accordance with U.S. generally accepted accounting principles ("GAAP") (collectively, the "non-GAAP financial measures"). Adjusted EBITD
Slide 3: Forward Looking Statement
FORWARD LOOKING STATEMENT The matters discussed in this presentation, particularly those in the section labeled "Outlook," include forward-looking statements regarding, among other things, future operating results. When used in this presentation, the words "outlook," "intends to," "believes," "antic
Slide 4: Cyber Incident Update, Consolidated 4Q21 Results, Diamond New Financing
CYBER INCIDENT UPDATE o Operations back to normal o No ransom paid o Financial impact to date: $24M after estimated insurance proceeds1 ($63M lost advertising and $11M in costs) o Almost entire impact was in Broadcast segment & Other o 4Q21 Broadcast segment & Other EBITDA exceeded guidance after ad
Slide 5: Strategic Initiatives
STRATEGIC INITIATIVES DIRECT TO CONSUMER (DTC) LAUNCH o Soft launch (5 Bally Sports RSNs with MLB teams) expected in 2Q22; full launch (addition of NBA and NHL teams) in 3Q22 o Total addressable market of over 80M homes o More personalized and interactive experience o Watch & Play and gamification e
Slide 6: Strategic Initiatives: ATSC 3.0
STRATEGIC INITIATIVES ATSC 3.0 (NextGen Broadcasting) o 75% of U.S. households projected to receive signal by end of 2022 o 4.5M televisions expected to be sold with ATSC 3.0 capabilities in 2022 o Significant progress in testing and validation of technology in 2021 ▪ Enhanced GPS capabilities ▪ Bro
Slide 7: 2021 ESG Initiatives Progress
2021 ESG INITIATIVES PROGRESS • Formulated Sinclair’s initial ESG narrative, disclosure and reporting • Identified LED lighting retrofit potential savings of 14GWh – equivalent of the electricity used by 1,300 homes in a year • Earned Office Depot award for leadership in green purchasing (1 of 19 co
Slide 8: Sum-of-the-Parts Valuation Far Greater Than Market Cap Value
SUM-OF-THE-PARTS VALUATION Contains Forward Looking Statements FAR GREATER THAN MARKET CAP VALUE • Total Company sum-of-the-parts valuation estimated close to triple current stock price • Investment Portfolio Holdings - Estimated FMV of $1.4B or approx. $19/share; held at holding company o Real esta
Slide 9: Shareholder-Friendly Actions Taken
Contains Forward Looking Statements SHAREHOLDER-FRIENDLY ACTIONS TAKEN • Share repurchase o Repurchased approx. 36M total common shares since the beginning of 2018 o Represents approx. 35% of shares outstanding at the beginning of 2018 o Repurchased 2.4M common shares in 4Q21 o Repurchased 2.0M YTD
Slide 10: Broadcast and Other 4Q21 Results
BROADCAST AND OTHER 4Q21 RESULTS Media Revenue: Media Expense: • Political revenue lower due to 2020 being a presidential year • Primarily due to higher network programming fees and production costs. • Core advertising revenue impacted by cyber incident • Favorable to guidance by $22M • Distribution
Slide 11: Local Sports 4Q21 Results
LOCAL SPORTS 4Q21 RESULTS Media Revenue drivers: Media Expense drivers: • Fewer rebates to distributors in 2021 • Higher sports rights amortization on higher game counts • High single digit % subscriber churn • Higher programming and production expenses on higher game counts • Ad revenue increased o
Slide 12: Consolidated Sinclair 4Q21 Financial Highlights
CONSOLIDATED SINCLAIR 4Q21 FINANCIAL HIGHLIGHTS MEDIA REVENUE ($M) ADJUSTED EBITDA ($M) ADJUSTED FREE CASH FLOW ($M) $1,580 $260 $257 $80 $76 $1,564 $1,560 $255 $70 $1,540 $1,537 $250 $58 $60 $1,520 $245 $50 $1,500 $240 $234 $40 $1,480 $235 $232 $33 $1,461 $30 $1,460 $230 $1,440 $225 $20 $1,420 $220
Slide 13: Balance Sheet
BALANCE SHEET • Total debt at the end of the fourth quarter was $12.34B o Net leverage ratio for consolidated Sinclair at quarter-end was 8.4x. o Sinclair Television Group’s first lien indebtedness ratio was 3.0x, on a covenant of 4.5x; and net leverage was 4.3x o Diamond’s first lien indebtedness r
Slide 14: Outlook
OUTLOOK BROADCAST AND OTHER LOCAL SPORTS CONSOLIDATED • 1Q22 media revenue up 6% to 8% vs. • 1Q22 Media Revenue down 4% to 5% vs. • 1Q22 Media Revenue up 1% to 2% vs. 1Q21 to $803M to$819M 1Q21 to $732M to $737M 1Q21 to $1.506B to $1.528B o Mid-single-digit increases in 1Q22 Adjusted EBITDA1 down vs
Slide 15: Questions
Questions 15
Slide 16: Key Takeaways
KEY TAKEAWAYS • Investment portfolio grew to $1.4B or approx. $19 per share • 2022 should be record-breaking for political advertising in a mid-term election year • Major initiatives in the year ahead: • ATSC 3.0 penetrating market • Tennis Channel expanding into all key territories globally • Compu