Fisher Communications swung back into the red last year, but the Seattle broadcaster's loss masked what appeared to be underlying improvement...
Fisher Communications swung back into the red last year, but the Seattle broadcaster’s loss masked what appeared to be underlying improvement in its business.
Fisher, which owns 10 TV and 27 radio stations in the Northwest, including KOMO-TV, posted a net loss of $12 million in 2004, compared with a profit of $8.2 million in 2003.
The loss was caused by special charges that obscured the fact that on the operating level, Fisher earned $6.4 million — its first operating profit since 2000.
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By contrast, it had an operating loss of $12 million in 2003 on the underlying business but reported a net profit, thanks to $23 million worth of asset sales.
Last year’s improvement might be tough to replicate. The gains were largely due to a single short-term factor: political advertising from the November election, which helped deliver a 24 percent boost in revenue in the fourth quarter.
“We had a really strong fourth quarter,” said Rob Bateman, chief financial officer. The question is, “How do you follow that up and keep revenue coming in after an election year?,” he said.
Political advertising provided between 10 and 15 percent of Fisher’s $153.9 million in revenue last year, Bateman said.
Fisher didn’t offer a forecast for 2005, but Bateman said pushing hard to shore up revenue in a political off-year was among the main challenges.
“For many broadcasters, if you’re able to maintain the same level of revenue in an off-year, you’ve done a really good job,” he said.
Net profit was $4.5 million in the fourth quarter, compared with a profit of $19.8 million in the fourth quarter of 2003. However, asset sales lifted the year-earlier total.
The charges that pulled Fisher’s full-year results back into the red included a $16.1 million cash charge it paid to terminate a loan taken several years ago that used Fisher-owned Safeco stock as collateral. The charge was incurred when Fisher refinanced its debt last year, issuing $150 million worth of 10-year notes.
Fisher’s assets swelled by about $39 million, thanks mainly to appreciation of its 3 million shares of Safeco stock.
Last month, Fisher’s board ousted Chief Executive William Krippaehne, who expanded Fisher’s broadcasting holdings in the 1990s and presided over subsequent financial losses.
Ben Tucker, acting CEO, said the company is finalizing a severance package for Krippaehne that will affect 2005 earnings.
Tucker said the board has formed a committee to find a new CEO, but its timetable is unclear.
“Our board feels that as part of their diligence that that’s a necessary step that they need to take,” Tucker said.
Alwyn Scott: 206-464-3329 or firstname.lastname@example.org