Sinclair's net broadcast revenues from continuing operations were $164.4 million for the fourth quarter of 2008, down .8% from the previous year's fourth quarter. Preliminary operating income was $46.9 million in the quarter, compared to $47 million in the same quarter last year.
The preliminary results do not include non-cash impairment charges expected to be recorded in the fourth quarter of 2008, which have not yet been finalized.
"In response to a deepening economic recession and going into a non-election year where there would be an absence of political revenues, we took steps to reduce our 2009 operating costs and to preserve liquidity," said Sinclair President/CEO David Smith, "and we are currently re-evaluating how best to utilize our cash flow. Among some of the initiatives implemented, we drastically cut capital expenditures, are limiting our outside investments, reduced corporate overhead and TV station expenses, including reducing staffing levels and freezing salaries.
"While the savings from our cost control initiatives are meaningful, we do not expect them to offset the expected declines in advertising revenues in 2009. Although we expect to generate sufficient cash flow in 2009 to meet our principal obligations and pay our regular quarterly dividends of $0.20 per share, the Company's Board of Directors felt that the Company's ownership should make a financial sacrifice just as our employees have done, and therefore, has suspended our dividend until further notice."
Sinclair reported political revenue of $25.6 million in the fourth quarter and $17.7 million in retransmission consent revenue. Sinclair tallied $73.9 million in retrans revenue for the year.
Local advertising revenues were down 7.6% for the fourth quarter, compared to the same quarter a year ago. National advertising was up 9.8% on the strength of political advertising.
Sinclair executives see a rough economic road ahead. "The recession continues to negatively impact time sales across the majority of our advertising sectors, in particular the automotive category," commented EVP and CFO David Amy. "While it is unclear how long or how deep the recession will be, we believe our current public valuation is a reflection of the economic turmoil rather than deterioration in broadcast television's longer term fundamentals."
Sinclair expects first quarter 2009 station net broadcast revenues from continuing operations, before barter, to be down low to mid twenty percents, as compared to the same category in the first quarter of 2008.