Crown Media Holdings, parent company of Hallmark Channel, reported its first-ever quarter of positive cash flow, fueled primarily by increased carriage fees and lower operating expenses.
Adjusted earnings before interest, taxes, depreciation and amortization, a measure of cash flow, was $23.3 million in the fourth quarter, compared to a loss of $744,000 in the same period in the prior year. For the full year, adjusted EBITDA was $66.2 million, versus a loss of $11.3 million in 2007.
Revenue at the company rose 8% to $75.2 million, due in part to increased carriage fees from renewed distribution agreements. For the full year, revenue increased 20% to $281.8 million, due to increases in both advertising revenue and subscriber fees, the company said.
Programming expenses dropped 17% to $33 million in the quarter, primarily due to the expiration of a programming agreement with the National Interfaith Cable Coalition and Crown's own efforts to manage costs.
Selling, general and administrative expenses plunged 60% from $21.6 million in the fourth quarter of 2007 to $8.6 million in the most recent period, due to a $2.1 million decrease in compensation expenses related to share-based obligations, a decrease in bonus expenses and a $7.7 million decrease in legal expenses.
Crown Media also said carriage for its Hallmark Movie Channel rose to 14 million homes in the period. The company expects Hallmark Movie to reach 25 million homes by the end of 2009.
“Our company delivered an extremely successful year for 2008 — in terms of operating as well as financial results,” Crown CEO Henry Schleiff said in a statement. “Despite the challenges we encountered, our impressive revenue and EBITDA growth reflect the strong foundation we have built to help us withstand and even operate successfully in an economic downturn.”
Crown Media shares closed at $1.71 each on March 4, up 10 cents (6.2%) per share.
Rounding out last week's earnings, Nexstar Broadcasting Group reported a strong fourth quarter and year end, fueled by a big increase in retransmission consent revenue.
Nexstar reported revenue of $80.3 million in the period, up 12% and earnings before interest, taxes, depreciation and amortization rose 25.6% to $30.3 million in the period.
For the full year, revenue rose 7% to $284.9 million and cash flow was up 13% to 96.2 million. That growth was mainly fueled by a 27% increase in retransmission-consent revenue, which grew to $21.8 million for the year and helped offset declines in local advertising at the station group.