Sinclair Broadcast preparing to address 2012 maturities, CFO says

By Jennifer Lanning Drey

Portland, Ore., Aug. 5 - Sinclair Broadcast Group, Inc. believes conditions are right for the company to address its 2012 maturities in the near term, Lucy Rutishauser, its chief financial officer, said Thursday during Sinclair's second-quarter earnings conference call.

"Our intent is to address the 2012 maturities shortly, given TV's improving fundamentals, the market's appetite for broadcast paper and the strength in the high-yield market," she said.

"You should also expect us to very shortly launch a refinancing of our bank debt with the expectation of obtaining more flexibility and improved pricing," Rutishauser added.

Sinclair had nothing drawn on its revolving credit facility at June 30.

Also at quarter-end, the company had $65.3 million of cash. Of that amount, $22.4 million is being held in escrow to fund the remaining $22.7 million of 4 7/8% bonds that can be put to the company in January, Rutishauser reported.

"Our cash balance continues to build as the business improves and free cash flow is generated," she said.

Sinclair generated $35.7 million of free cash flow during the second quarter, David Smith, its chief executive officer, said during the call.

The company had net debt of $1.23 billion at June 30, versus net debt of $1.25 billion at March 31.

During the second quarter, holders of Sinclair's 3% convertible bonds put $10 million of the outstanding $15.4 million back to the company. Sinclair funded the amount using cash held in escrow.

The unused portion of the cash in escrow for the 3% convertibles was released and used to repurchase $6.1 million face value of the company's 6% convertible bonds in the open market, Rutishauser said.

Sinclair voluntarily prepaid $25 million of term loans B from cash on hand on April 30, according to its earnings release.

"Since the beginning of the year, our total debt has declined by $69 million and our cash balance has increased by $22.8 million," Rutishauser said.

Gains in most categories

Sinclair posted net broadcast revenues from continuing operations of $158.7 million for the three months ended June 30. The figure compared with net broadcast revenues from continuing operations of $133.0 million in the same period of 2009.

The company said it experienced gains in nearly all of its major core advertising categories during the second quarter, with the largest growth coming from the automotive sector.

Sinclair is a television broadcasting company based in Hunt Valley, Md.

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