$58 mil negative offset by $254.7 mil spin-off of ad, radio biz
Paxson Communications posted an operating loss of $58.3 million in 1997, but the red ink was offset by a one-time gain of $254.7 million from the sale of its radio stations and outdoor advertising business.
Paxson chairman Lowell Paxson put a positive spin on the earnings report, saying that the company has been buying up TV stations to prepare for the August launch of its PaxNet, a family friendly network set to air on Paxson’s 70-plus TV stations nationwide. Counting pending transactions, Paxson is in line to own TV stations in all top 20 TV markets, and 42 of the top 50.
“We are seeking to leverage our massive distribution assets through the development of PaxNet,” said Paxson. “Our innovative network model, based on owning and operating the nation’s largest TV station group, should lead to enhanced value creation as we deliver on our goals.”
For the year, Paxson’s operating cash flow climbed 55% over 1996 to $30.2 million on revenue of $88.4 million as the company continued its TV station acquisition spree. But operating expenses rose to $110.3 million, up from $66.2 million in 1996. Thanks to the one-time $254.7 million infusion, Paxson’s net income jumped to $214.7 million from a net loss last year of $26.2 million.
Paxson’s long-term debt load also grew in 1997, to $350.8 million from $231.7 million in 1996.
For the quarter ended Dec. 31, 1997, Paxson’s operating cash flow increased 99% over fourth-quarter 1996 to $9.7 million on revenue of $27.2 million. Driven by a one-time gain of $188.6 million, net income for the quarter was $180.9 million, compared with a net loss of $12.5 million in 1996.