Entravision Communications Corporation Reports First Quarter 2013 Results

02 May, 2013, 16:05 ET from Entravision Communications Corporation

SANTA MONICA, Calif., May 2, 2013 /PRNewswire/ -- Entravision Communications Corporation (NYSE: EVC) today reported financial results for the three-month period ended March 31, 2013.

Historical results, which are attached, are in thousands of U.S. dollars (except share and per share data).  This press release contains certain non-GAAP financial measures as defined by SEC Regulation G.  The GAAP financial measure most directly comparable to each of these non-GAAP financial measures, and a table reconciling each of these non-GAAP financial measures to its most directly comparable GAAP financial measure, is included beginning on page 7.  Unaudited financial highlights are as follows:

Three-Month Period

Ended March 31,

2013

2012

% Change

Net revenue

$         49,087

$         46,524

6%

Operating expenses (1)

31,908

31,006

3%

Corporate expenses (2)

4,497

3,881

16%

Consolidated adjusted EBITDA (3)

13,380

11,624

15%

Free cash flow (4)

$           3,438

$           1,444

138%

Free cash flow per share (4)

$            0.04

$            0.02

100%

Net income (loss) applicable to common stockholders

$            (957)

$         (3,395)

(72)%

Net income (loss) per share applicable

to common stockholders, basic and diluted

$           (0.01)

$           (0.04)

(75)%

Weighted average common shares outstanding, basic and diluted

86,459,017

85,806,080

(1)     Operating expenses include direct operating, selling, general and administrative expenses. Included in operating expenses are $0.2 million and $0.1 million of non-cash stock-based compensation for the three-month periods ended March 31, 2013 and 2012, respectively. Operating expenses do not include corporate expenses, depreciation and amortization, impairment charge, gain (loss) on sale of assets, gain (loss) on debt extinguishment and other income (loss).

(2)     Corporate expenses include $0.7 million and $0.1 million of non-cash stock-based compensation for the three-month periods ended March 31, 2013 and 2012, respectively.

(3)     Consolidated adjusted EBITDA means net income (loss) plus gain (loss) on sale of assets, depreciation and amortization, non-cash impairment charge, non-cash stock-based compensation included in operating and corporate expenses, net interest expense, other income (loss), gain (loss) on debt extinguishment, income tax (expense) benefit, equity in net income (loss) of nonconsolidated affiliate, non-cash losses and syndication programming amortization less syndication programming payments. We use the term consolidated adjusted EBITDA because that measure is defined in our credit facility and does not include gain (loss) on sale of assets, depreciation and amortization, non-cash impairment charge, non-cash stock-based compensation, net interest expense, other income (loss), gain (loss) on debt extinguishment, income tax (expense) benefit, equity in net income (loss) of nonconsolidated affiliate, non-cash losses and syndication programming amortization and does include syndication programming payments. While many in the financial community and we consider consolidated adjusted EBITDA to be important, it should be considered in addition to, but not as a substitute for or superior to, other measures of liquidity and financial performance prepared in accordance with accounting principles generally accepted in the United States of America, such as cash flows from operating activities, operating income and net income.  As consolidated adjusted EBITDA excludes non-cash gain (loss) on sale of assets, non-cash depreciation and amortization, non-cash impairment charge, non-cash stock-based compensation expense, net interest expense, other income (loss), gain (loss) on debt extinguishment, income tax (expense) benefit, equity in net income (loss) of nonconsolidated affiliate, non-cash losses and syndication programming amortization and includes syndication programming payments, consolidated adjusted EBITDA has certain limitations because it excludes and includes several important non-cash financial line items. Therefore, we consider both non-GAAP and GAAP measures when evaluating our business.  Consolidated adjusted EBITDA is also used to make executive compensation decisions. 

(4)     Free cash flow is defined as consolidated adjusted EBITDA less cash paid for income taxes, net interest expense, and capital expenditures. Net interest expense is defined as interest expense, less non-cash interest expense relating to amortization of debt finance costs, less non-cash interest expense relating to discount amortization on our $324 million aggregate principal amount of 8.750% senior secured first lien notes due 2017 (the "Notes"),  and less interest income. Free cash flow per share is defined as free cash flow divided by the basic or diluted weighted average common shares outstanding. 

Commenting on the Company's earnings results, Walter F. Ulloa, Chairman and Chief Executive Officer, said, "During the first quarter, we achieved revenue growth driven by increases in both our television and radio segments. Core revenue (excluding retransmission consent revenue and political advertising revenue) from our television and radio segments outperformed their respective industry averages, and we improved our free cash flow over the first quarter of 2012. Our audience shares remain strong in the nation's most densely populated Hispanic markets, and we believe we are well positioned to benefit as the U.S. Hispanic market continues to expand and advertisers increasingly recognize the importance of reaching our target audience."

Financial Results

Three-Month Period Ended March 31, 2013 Compared to Three-Month Period Ended March 31, 2012 (Unaudited)

Three-Month Period

Ended March 31,

2013

2012

% Change

Net revenue

$       49,087

$       46,524

6%

Operating expenses (1)

31,908

31,006

3%

Corporate expenses (1)

4,497

3,881

16%

Depreciation and amortization

3,955

4,347

(9)%

Operating income (loss)

8,727

7,290

20%

Interest expense, net

(7,777)

(9,096)

(15)%

Income (loss) before income taxes

950

(1,806)

NM

Income tax (expense) benefit 

(1,907)

(1,589)

20%

Net income (loss)

$          (957)

$       (3,395)

(72)%

(1)  Operating expenses and corporate expenses are defined on page 1.

Net revenue increased to $49.1 million for the three-month period ended March 31, 2013 from $46.5 million for the three-month period ended March 31, 2012, an increase of $2.6 million. Of the overall increase, $1.8 million came from our television segment and was primarily attributable to an increase in local advertising revenue and an increase in retransmission consent revenue. Additionally, $0.8 million of the overall increase came from our radio segment and was primarily attributable to an increase in national advertising revenue.

Operating expenses increased to $31.9 million for the three-month period ended March 31, 2013 from $31.0 million for the three-month period ended March 31, 2012, an increase of $0.9 million. The increase was primarily attributable to an increase in expenses associated with the increase in net revenue and an increase in salary expense, partially offset by a decrease in bad debt expense.

Corporate expenses increased to $4.5 million for the three-month period ended March 31, 2013 from $3.9 million for the three-month period ended March 31, 2012, an increase of $0.6 million. The increase was primarily attributable to an increase in non-cash stock-based compensation expense.

Segment Results

The following represents selected unaudited segment information:

Three-Month Period

Ended March 31,

2013

2012

% Change

Net Revenue

Television

$         34,952

$         33,164

5%

Radio

$         14,135

$         13,360

6%

Total

$         49,087

$         46,524

6%

Operating Expenses (1)

Television

$         18,914

$         18,535

2%

Radio

12,994

12,471

4%

Total

$         31,908

$         31,006

3%

Corporate Expenses (1)

$           4,497

$           3,881

16%

Consolidated adjusted EBITDA (1)

$         13,380

$         11,624

15%

(1)     Operating expenses, Corporate expenses, and Consolidated adjusted EBITDA are defined on page 1.

Entravision Communications Corporation will hold a conference call to discuss its 2013 first quarter results on May 2, 2013 at 5 p.m. Eastern Time.  To access the conference call, please dial 412-858-4600 ten minutes prior to the start time.  The call will be webcast live and archived for replay on the investor relations portion of the Company's Web site located at www.entravision.com.

Entravision Communications Corporation is a diversified Spanish-language media company utilizing a combination of television, radio and digital operations to reach Latino consumers across the United States, as well as the border markets of Mexico. Entravision is the largest affiliate group of both the top-ranked Univision television network and Univision's UniMas network, with television stations in 19 of the nation's top 50 Latino markets. The company also operates one of the nation's largest groups of primarily Spanish-language radio stations, consisting of 49 owned and operated radio stations. Additionally, Entravision has a variety of cross-platform digital content and sales offerings designed to capitalize on the company's leadership position within the Latino broadcasting community. Entravision shares of Class A Common Stock are traded on The New York Stock Exchange under the symbol: EVC.

This press release contains certain forward-looking statements.  These forward-looking statements, which are included in accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, may involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results and performance in future periods to be materially different from any future results or performance suggested by the forward-looking statements in this press release. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that actual results will not differ materially from these expectations, and the Company disclaims any duty to update any forward-looking statements made by the Company. From time to time, these risks, uncertainties and other factors are discussed in the Company's filings with the Securities and Exchange Commission.

(Financial Table Follows)

Entravision Communications Corporation Consolidated Balance Sheets (In thousands)

March 31,

December 31,

2013

2012

(Unaudited)

ASSETS

Current assets

Cash and cash equivalents

$               32,315

$               36,130

Trade receivables

46,361

48,030

Prepaid expenses and other current assets

4,960

4,245

Total current assets

83,636

88,405

Property and equipment, net

60,042

61,435

Intangible assets subject to amortization, net 

21,714

22,349

Intangible assets not subject to amortization

220,701

220,701

Goodwill

36,647

36,647

Other assets

8,072

8,514

Total assets

$             430,812

$             438,051

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

Current maturities of long-term debt

$                    200

$                    150

Advances payable, related parties

118

118

Accounts payable and accrued expenses

29,855

39,158

Total current liabilities

30,173

39,426

Long-term debt, less current maturities

340,748

340,664

Other long-term liabilities

7,180

7,359

Deferred income taxes

47,043

45,201

Total liabilities

425,144

432,650

Stockholders' equity

Class A common stock

6

5

Class B common stock

2

2

Class U common stock

1

1

Additional paid-in capital

932,037

930,814

Accumulated deficit

(926,378)

(925,421)

Total stockholders' equity

5,668

5,401

Total liabilities and stockholders' equity

$             430,812

$             438,051

 

Entravision Communications Corporation Consolidated Statements of Operations (In thousands, except share and per share data) (Unaudited)

Three-Month Period

Ended March 31,

2013

2012

Net revenue

$

49,087

$

46,524

Expenses:

Direct operating expenses

24,225

21,634

Selling, general and administrative expenses

7,683

9,372

Corporate expenses

4,497

3,881

Depreciation and amortization

3,955

4,347

40,360

39,234

Operating income (loss)

8,727

7,290

Interest expense

(7,784)

(9,100)

Interest income

7

4

Income (loss) before income taxes

950

(1,806)

Income tax (expense) benefit

(1,907)

(1,589)

Net income (loss) applicable to common stockholders

$

(957)

$

(3,395)

Basic and diluted earnings per share:

Net income (loss) per share applicable to common stockholders,

basic and diluted

$

(0.01)

$

(0.04)

Weighted average common shares outstanding, basic and diluted

86,459,017

85,806,080

 

 

Entravision Communications Corporation Consolidated Statements of Cash Flows (In thousands; unaudited)

Three-Month Period

Ended March 31,

2013

2012

Cash flows from operating activities:

Net income (loss)

$                          (957)

$                       (3,395)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Depreciation and amortization

3,955

4,347

Deferred income taxes

1,842

1,106

Amortization of debt issue costs

455

563

Amortization of syndication contracts

151

193

Payments on syndication contracts

(325)

(467)

Non-cash stock-based compensation

872

261

Changes in assets and liabilities:

(Increase) decrease in accounts receivable

1,916

3,269

(Increase) decrease in prepaid expenses and other assets

(828)

(644)

Increase (decrease) in accounts payable, accrued expenses and other liabilities

(8,692)

(11,539)

Net cash provided by (used in) operating activities

(1,611)

(6,306)

Cash flows from investing activities:

Purchases of property and equipment and intangibles

(2,555)

(1,164)

Net cash provided by (used in) investing activities

(2,555)

(1,164)

Cash flows from financing activities:

Proceeds from issuance of common stock

351

-

Payments of deferred debt and offering costs

-

(80)

Net cash provided by (used in) financing activities

351

(80)

Net increase (decrease) in cash and cash equivalents

(3,815)

(7,550)

Cash and cash equivalents:

Beginning

36,130

58,719

Ending

$                       32,315

$                       51,169

 

Entravision Communications Corporation Reconciliation of Consolidated Adjusted EBITDA to Cash Flows From Operating Activities (In thousands; unaudited)

 

The most directly comparable GAAP financial measure is operating cash flow. A reconciliation of this non-GAAP measure to cash flows from operating activities for each of the periods presented is as follows:

Three-Month Period

Ended March 31,

2013

2012

Consolidated adjusted EBITDA (1)

$                13,380

$                11,624

Interest expense

(7,784)

(9,100)

Interest income

7

4

Income tax (expense) benefit

(1,907)

(1,589)

Amortization of syndication contracts

(151)

(193)

Payments on syndication contracts

325

467

Non-cash stock-based compensation included in direct operating

 expenses

(184)

(13)

Non-cash stock-based compensation included in selling, general 

and administrative expenses

-

(109)

Non-cash stock-based compensation included in corporate expenses

(688)

(139)

Depreciation and amortization

(3,955)

(4,347)

Net income (loss)

(957)

(3,395)

Depreciation and amortization

3,955

4,347

Deferred income taxes

1,842

1,106

Amortization of debt issue costs

455

563

Amortization of syndication contracts

151

193

Payments on syndication contracts

(325)

(467)

Non-cash stock-based compensation

872

261

Changes in assets and liabilities, net of effect of acquisitions and dispositions:

(Increase) decrease in accounts receivable

1,916

3,269

(Increase) decrease in prepaid expenses and other assets

(828)

(644)

Increase (decrease) in accounts payable, accrued expenses and other liabilities

(8,692)

(11,539)

Cash flows from operating activities

$                (1,611)

$                (6,306)

(1)   Consolidated adjusted EBITDA is defined on page 1.

Entravision Communications Corporation Reconciliation of Free Cash Flow to Net Income (Loss) (In thousands; unaudited)

 

The most directly comparable GAAP financial measure is net income (loss). A reconciliation of this non-GAAP measure to net income (loss) for each of the periods presented is as follows:

Three-Month Period

Ended March 31,

2013

2012

Consolidated adjusted EBITDA (1)

$       13,380

$       11,624

Net interest expense (1)

7,322

8,533

Cash paid (refunded) for income taxes

65

483

Capital expenditures (2)

2,555

1,164

Free cash flow (1)

3,438

1,444

Capital expenditures (2)

2,555

1,164

Amortization of debt issue costs

(455)

(563)

Non-cash income tax expense

(1,842)

(1,106)

Amortization of syndication contracts

(151)

(193)

Payments on syndication contracts

325

467

Non-cash stock-based compensation included in direct operating

 expenses

(184)

(13)

Non-cash stock-based compensation included in selling, general 

and administrative expenses

-

(109)

Non-cash stock-based compensation included in corporate expenses

(688)

(139)

Depreciation and amortization

(3,955)

(4,347)

Net income (loss)

$          (957)

$       (3,395)

(1)  Consolidated adjusted EBITDA, net interest expense, and free cash flow are defined on page 1.

(2)  Capital expenditures is not part of the consolidated statement of operations.

SOURCE Entravision Communications Corporation



RELATED LINKS

http://www.entravision.com