TEGNA Announces Record Preliminary First Quarter Results, Second Quarter Guidance

Rhea-AI Summary

TEGNA Inc. (NYSE: TGNA) reported strong preliminary financial results for Q1 2021, with expected revenues of $727 million, a 6% increase year-over-year. GAAP net income is projected at $113 million, and Non-GAAP net income at $115 million, reflecting a 23% rise. Adjusted EBITDA is anticipated to reach $231 million, marking a 9% YoY increase. The company also expects free cash flow of $159 million, a 12% rise, and announced a 36% increase in its dividend to 9.5 cents per share. TEGNA's CEO highlighted the growth in subscription revenues and effective cost management as key drivers of their performance.

Positive

• Revenue expected at $727 million, up 6% YoY.
• Non-GAAP net income projected at $115 million, a 23% increase YoY.
• Adjusted EBITDA anticipated at $231 million, a 9% rise YoY.
• Free cash flow expected to reach $159 million, up 12% YoY.
• 36% increase in quarterly dividend to 9.5 cents per share approved by the Board.

Negative

• Elevated tax payments anticipated in Q2 2021, estimated at $120 - $125 million.

TEGNA Inc. (NYSE: TGNA) today announced preliminary financial results for the first quarter ended March 31, 2021.

PRELIMINARY FIRST QUARTER HIGHLIGHTS¹

• Revenue is expected to be $727 million, up six percent year-over-year and at the high end of the range of prior guidance, driven by continued growth in subscription revenue and stronger-than-expected advertising and marketing services (“AMS”) revenues, which are expected to finish the quarter up more than nine percent.

• GAAP net income is expected to be $113 million or $0.51 per share. Non-GAAP net income is expected to be $115 million, up 23 percent year-over-year, and non-GAAP diluted earnings per share is expected to be $0.52, up 21 percent, reflecting the strong growth in Adjusted EBITDA.

• Adjusted EBITDA is expected to be $231 million, up nine percent year-over-year despite the impact of record political advertising revenues in the first quarter of last year, reflecting strong operational performance of TEGNA’s stations including on-going cost efficiency efforts, in addition to continued growth in subscription and AMS revenues. TEGNA’s expenses are expected to be in line with prior guidance.

• Free cash flow is expected to be $159 million, up 12 percent year over-year-year, driven by recent business performance including improving AMS revenues and continued strength of subscription revenues as well as the ongoing benefit of significant cost initiatives that have been under way for more than 24 months.

• TEGNA’s Board of Directors approved a 36 percent dividend increase resulting in a quarterly dividend of 9.5 cents per share, payable on July 1, 2021.

1 “Prior guidance” reflects first quarter 2021 guidance provided in March 1, 2021 press release.

CEO COMMENT

“TEGNA had an exceptionally strong start to the year, with a record first quarter for revenue, net income and Adjusted EBITDA. We will meet guidance on all first quarter metrics, and are raising our full-year 2020 - 2021 free cash flow guidance, while lowering our expected year-end net leverage ratio,” said Dave Lougee, president and chief executive officer.

“TEGNA’s subscription revenues have continued to serve as a key driver of our underlying growth, producing high-margin, durable revenue. Our successfully negotiated retransmission agreements have allowed us to achieve leading Big Four affiliate retransmission rates and continued visibility into our subscription business. As a reminder, we expect net subscription profits to grow in the mid-to-high twenties percent in 2021. Our advertising and marketing services revenues have also not only returned to pre-pandemic levels, but are expected to be up more than nine percent year-over-year for the first quarter.

“The recent announcement of the 36 percent increase in our dividend beginning this July, closely following the reauthorization of our share repurchase program, reflects our commitment to returning value to our shareholders in the form that makes the most sense based on market conditions. Our Board took these actions due to the strength of our current and expected future cash flows and our balance sheet.

“Our expectations for continued growth and value creation are evident in our second quarter guidance as well as our updated full year 2021 guidance. We look forward to providing more detail on the key drivers of our recent and expected performance along with updates on our strategic initiatives during our first quarter earnings call.”

SECOND QUARTER AND FULL YEAR 2021 OUTLOOK

In the second quarter of 2021, TEGNA results are expected to continue to be supported by the growth drivers of strong subscription revenue and the recovery of advertising and marketing services revenue.

TEGNA expects to have elevated second quarter cash tax payments of $120 - $125 million due to our record 2020 results.

For the second quarter of 2021, the company expects:

Second Quarter 2021 Key Guidance Metrics Reflects expectations relative to

FAQ

What are TEGNA's expected revenues for Q1 2021?

TEGNA expects revenues of $727 million for Q1 2021, a 6% increase year-over-year.

What is TEGNA's forecast for net income in Q1 2021?

GAAP net income for TEGNA is projected at $113 million for Q1 2021.

How much is TEGNA's expected Adjusted EBITDA for Q1 2021?

TEGNA anticipates Adjusted EBITDA to be $231 million in Q1 2021, a 9% increase year-over-year.

What dividend increase has TEGNA announced?

TEGNA's Board approved a 36% increase in the quarterly dividend to 9.5 cents per share.

What is the outlook for TEGNA in Q2 2021?

TEGNA expects strong subscription revenue growth and recovery in advertising and marketing services revenue in Q2 2021.