Entravision Communications Corporation Reports Second Quarter 2015 Results

- Announces Quarterly Cash Dividend of $0.025 Per Share -

Aug 06, 2015, 16:05 ET from Entravision Communications Corporation

SANTA MONICA, Calif., Aug. 6, 2015 /PRNewswire/ -- Entravision Communications Corporation (NYSE: EVC) today reported financial results for the three- and six-month periods ended June 30, 2015.

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 10. Unaudited financial highlights are as follows:

Three-Month Period

Six-Month Period

Ended June 30,

Ended June 30,

2015

2014

% Change

2015

2014

% Change

Net revenue

$

59,891

$

61,846

(3)%

$

119,441

$

114,502

4%

Cost of revenue - digital media (1)

1,392

-

100%

2,752

-

100%

Operating expenses (2)

37,528

35,001

7%

74,714

68,508

9%

Corporate expenses (3)

5,050

5,261

(4)%

10,043

10,097

(1)%

Consolidated adjusted EBITDA (4)

16,822

22,147

(24)%

33,664

37,132

(9)%

Free cash flow (5)

$

8,099

$

16,667

(51)%

$

18,357

$

26,020

(29)%

Free cash flow per share, basic (5)

$

0.09

$

0.19

(53)%

$

0.21

$

0.29

(28)%

Free cash flow per share, diluted (5)

$

0.09

$

0.18

(50)%

$

0.20

$

0.29

(31)%

Net income (loss)

$

5,241

$

8,735

(40)%

$

10,525

$

13,123

(20)%

Net income (loss) per share, basic

$

0.06

$

0.10

(40)%

$

0.12

$

0.15

(20)%

Net income (loss) per share, diluted

$

0.06

$

0.10

(40)%

$

0.12

$

0.14

(14)%

Weighted average common shares outstanding, basic

87,832,430

89,276,794

87,682,734

88,982,009

Weighted average common shares outstanding, diluted

90,091,735

91,202,732

90,089,679

91,074,937

(1)   Cost of revenue consists primarily of the costs of online media acquired from third-party publishers. Media cost is classified as cost of revenue in the period in which the corresponding revenue is recognized.

(2) Operating expenses include direct operating, selling, general and administrative expenses. Included in operating expenses are $0.3 million and $0.1 million of non-cash stock-based compensation for the three-month periods ended June 30, 2015 and 2014, respectively, and $0.7 million and $0.2 million of non-cash stock-based compensation for the six-month periods ended June 30, 2015 and 2014, 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).

(3) Corporate expenses include $0.6 million and $0.5 million of non-cash stock-based compensation for the three-month periods ended June 30, 2015 and 2014, respectively, and $1.1 million of non-cash stock-based compensation for each of the six-month periods ended June 30, 2015 and 2014.

(4) 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.

(5) 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, 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 second quarter, we faced challenging comparisons to last year's second quarter, particularly in our television segment, when we benefited from World Cup and political advertising revenue.  Nevertheless, we continued to increase our radio segment revenue and build our digital footprint through the acquisition of Pulpo Media in June 2014, which provides us with an integrated platform to allow advertisers and marketers to connect with Latino audiences.  Looking ahead, we remain well positioned to build on our success in attracting Latino audiences, expanding our advertiser base and monetizing our reach to the benefit of our shareholders."

Quarterly Cash Dividend

The Company announced today that its Board of Directors has approved a quarterly cash dividend to shareholders of $0.025 per share of the Company's Class A, Class B and Class U common stock, in an aggregate amount of approximately $2.2 million. The quarterly dividend will be payable on September 30, 2015 to shareholders of record as of the close of business on September 15, 2015, and the common stock will trade ex-dividend on September 11, 2015. As previously announced, the Company currently anticipates that future cash dividends will be paid on a quarterly basis. However any decision to pay future cash dividends will be subject to approval by the Board.

Financial Results

Three-Month Period Ended June 30, 2015 Compared to Three-Month Period Ended

June 30, 2014

(Unaudited)

Three-Month Period

Ended June 30,

2015

2014

% Change

Net revenue

$

59,891

$

61,846

(3)%

Cost of revenue - digital media (1)

1,392

-

100%

Operating expenses (1)

37,528

35,001

7%

Corporate expenses (1)

5,050

5,261

(4)%

Depreciation and amortization

3,958

3,503

13%

Operating income (loss)

11,963

18,081

(34)%

Interest expense, net

(3,245)

(3,456)

(6)%

Income (loss) before income taxes

8,718

14,625

(40)%

Income tax (expense) benefit

(3,477)

(5,890)

(41)%

Net income (loss)

$

5,241

$

8,735

(40)%

(1) Cost of revenue, operating expenses and corporate expenses are defined on page 1.

Net revenue decreased to $59.9 million for the three-month period ended June 30, 2015 from $61.8 million for the three-month period ended June 30, 2014, a decrease of $1.9 million. Of the overall decrease, approximately $6.7 million was attributed to our television segment and was primarily attributable to the absence of World Cup and significant political advertising revenue in 2015 compared to 2014, and a decrease in national advertising revenue, partially offset by increases in local advertising revenue and retransmission consent revenue. The overall decrease was partially offset by an increase of $0.9 million that was attributed to our radio segment and was primarily attributable to increases in local and national advertising revenue, partially offset by the absence of World Cup revenue in 2015 compared to 2014. Additionally, the overall decrease was partially offset by an increase of $3.9 million that was attributed to our digital segment, resulting from our acquisition of Pulpo in June 2014 and which did not contribute to revenue in the comparable period in 2014.

Operating expenses increased to $37.5 million for the three-month period ended June 30, 2015 from $35.0 million for the three-month period ended June 30, 2014, an increase of $2.5 million. The increase was primarily attributable to increased operating expenses of Pulpo, which we acquired in June 2014, and increases in rent expense, salary expense and employee benefits costs, partially offset by a decrease in expenses associated with the decrease in advertising revenue.

Corporate expenses decreased to $5.1 million for the three-month period ended June 30, 2015 from $5.3 million for the three-month period ended June 30, 2014, a decrease of $0.2 million. The decrease was primarily attributable to transaction costs associated with the acquisition of Pulpo in June 2014 that did not recur in 2015, partially offset by an increase in salary expense.

Cost of revenue was $1.4 million for the three-month period ended June 30, 2015 due to the acquisition of Pulpo in June 2014.

Six-Month Period Ended June 30, 2015 Compared to Six-Month Period Ended

June 30, 2014

(Unaudited)

Six-Month Period

Ended June 30,

2015

2014

% Change

Net revenue

$

119,441

$

114,502

4%

Cost of revenue - digital media (1)

2,752

-

100%

Operating expenses (1)

74,714

68,508

9%

Corporate expenses (1)

10,043

10,097

(1)%

Depreciation and amortization

7,920

7,018

13%

Operating income (loss)

24,012

28,879

(17)%

Interest expense, net

(6,464)

(6,882)

(6)%

Income (loss) before income taxes

17,548

21,997

(20)%

Income tax (expense) benefit

(7,023)

(8,874)

(21)%

Net income (loss)

$

10,525

$

13,123

(20)%

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

Net revenue increased to $119.4 million for the six-month period ended June 30, 2015 from $114.5 million for the six-month period ended June 30, 2014, an increase of $4.9 million. Of the overall increase, approximately $2.3 million was attributed to our radio segment and was primarily attributable to increases in local and national advertising revenue, partially offset by the absence of World Cup revenue in 2015 compared to 2014. Additionally, $7.6 million of the overall increase was attributed to our digital segment, resulting from our acquisition of Pulpo in June 2014 and which did not contribute to revenue in the comparable period in 2014. These increases were partially offset by a decrease of $5.0 million that was attributed to our television segment and was primarily attributable to the absence of World Cup and significant political advertising revenue in 2015 compared to 2014, and decreases in local and national advertising revenue, partially offset by approximately $5.0 million of revenue associated with television station channel modifications made by the Company in order to accommodate the operations of a telecommunications operator, and an increase in retransmission consent revenue.

Operating expenses increased to $74.7 million for the six-month period ended June 30, 2015 from $68.5 million for the six-month period ended June 30, 2014, an increase of $6.2 million. The increase was primarily attributable to increased operating expenses of Pulpo, which we acquired in June 2014, an increase in salary expense, and an increase in employee benefits costs and payroll taxes associated with the increase in salary expense.

Corporate expenses decreased to $10.0 million for the six-month period ended June 30, 2015 from $10.1 million for the six-month periods ended June 30, 2014, a decrease of $0.1 million. The decrease was primarily attributable to transaction costs associated with the acquisition of Pulpo in June 2014 that did not recur in 2015, partially offset by an increase in salary expense.

Cost of revenue was $2.8 million for the six-month period ended June 30, 2015 due to the acquisition of Pulpo in June 2014.

Segment Results

The following represents selected unaudited segment information:

Three-Month Period

Six-Month Period

Ended June 30,

Ended June 30,

2015

2014

% Change

2015

2014

% Change

Net Revenue

Television

$

36,397

$

43,151

(16)%

$

75,899

$

80,892

(6)%

Radio

19,585

18,695

5%

35,930

33,610

7%

Digital

3,909

-

100%

7,612

-

100%

Total

$

59,891

$

61,846

(3)%

$

119,441

$

114,502

4%

Cost of Revenue - digital media (1)

Digital

$

1,392

$

-

100%

$

2,752

$

-

100%

Operating Expenses (1)

Television

$

19,749

$

20,186

(2)%

$

39,483

$

39,637

(0)%

Radio

15,420

14,815

4%

30,132

28,871

4%

Digital

2,359

-

100%

5,099

-

100%

Total

$

37,528

$

35,001

7%

$

74,714

$

68,508

9%

Corporate Expenses (1)

$

5,050

$

5,261

(4)%

$

10,043

$

10,097

(1)%

Consolidated adjusted EBITDA (1)

$

16,822

$

22,147

(24)%

$

33,664

$

37,132

(9)%

(1) Cost of revenue, operating expenses, corporate expenses, and consolidated adjusted EBITDA are defined on page 1.

Entravision Communications Corporation will hold a conference call to discuss its 2015 second quarter results on August 6, 2015 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 media company serving Latino audiences and communities with an integrated platform of solutions and services that includes television, radio, digital media and data analytics to reach Latino audiences across the United States and Latin America. Entravision has 58 primary television stations, including in 20 of the nation's top 50 Latino markets, and is the largest affiliate group of both the top-ranked Univision television network and Univision's UniMas network. Entravision also operates one of the nation's largest groups of primarily Spanish-language radio stations, consisting of 49 owned and operated radio stations, and Entravision Solutions, a national sales representation and marketing organization specializing in Spanish-language media platforms and radio networks. Entravision also offers a variety of digital media platforms and services, including digital content, digital advertising platforms, including the #1-ranked online advertising platform in Hispanic reach according to comScore Media Metrix®, and data analytics solutions designed to maximize the opportunity for advertisers and marketers to connect with the growing Latino consumer market. 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.

 

Entravision Communications Corporation

Consolidated Balance Sheets

(In thousands; unaudited)

June 30,

December 31,

2015

2014

ASSETS

Current assets

Cash and cash equivalents

$

50,866

$

31,260

Trade receivables, net of allowance for doubtful accounts

56,232

64,956

Deferred income taxes

5,900

5,900

Prepaid expenses and other current assets

5,350

5,295

Total current assets

118,348

107,411

Property and equipment, net

60,365

56,784

Intangible assets subject to amortization, net

18,424

20,193

Intangible assets not subject to amortization

220,701

220,701

Goodwill

50,081

50,081

Deferred income taxes

60,934

66,558

Other assets

5,581

6,039

Total assets

$

534,434

$

527,767

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

Current maturities of long-term debt

$

3,750

$

3,750

Advances payable, related parties

118

118

Accounts payable and accrued expenses

28,275

32,195

Total current liabilities

32,143

36,063

Long-term debt, less current maturities

334,688

336,563

Other long-term liabilities

13,716

9,583

Total liabilities

380,547

382,209

Stockholders' equity

Class A common stock

6

6

Class B common stock

2

2

Class U common stock

1

1

Additional paid-in capital

911,161

912,161

Accumulated deficit

(753,949)

(764,474)

Accumulated other comprehensive income (loss)

(3,334)

(2,138)

Total stockholders' equity

153,887

145,558

Total liabilities and stockholders' equity

$

534,434

$

527,767

 

 

Entravision Communications Corporation

Consolidated Statements of Operations

(In thousands, except share and per share data)

(Unaudited)

Three-Month Period

Six-Month Period

Ended June 30,

Ended June 30,

2015

2014

2015

2014

Net revenue

$

59,891

$

61,846

$

119,441

$

114,502

Expenses:

Cost of revenue - digital media

1,392

-

2,752

-

Direct operating expenses

27,044

26,104

53,729

50,425

Selling, general and administrative expenses

10,484

8,897

20,985

18,083

Corporate expenses

5,050

5,261

10,043

10,097

Depreciation and amortization

3,958

3,503

7,920

7,018

47,928

43,765

95,429

85,623

Operating income (loss)

11,963

18,081

24,012

28,879

Interest expense

(3,256)

(3,469)

(6,483)

(6,907)

Interest income

11

13

19

25

Income (loss) before income taxes

8,718

14,625

17,548

21,997

Income tax (expense) benefit

(3,477)

(5,890)

(7,023)

(8,874)

Net income (loss)

$

5,241

$

8,735

$

10,525

$

13,123

Basic and diluted earnings per share:

Net income (loss) per share, basic

$

0.06

$

0.10

$

0.12

$

0.15

Net income (loss) per share, diluted

$

0.06

$

0.10

$

0.12

$

0.14

Cash dividends declared per common share

$

0.03

$

0.03

$

0.05

$

0.05

Weighted average common shares outstanding, basic

87,832,430

89,276,794

87,682,734

88,982,009

Weighted average common shares outstanding, diluted

90,091,735

91,202,732

90,089,679

91,074,937

 

 

Entravision Communications Corporation

Consolidated Statements of Cash Flows

(In thousands; unaudited)

Three-Month Period

Six-Month Period

Ended June 30,

Ended June 30,

2015

2014

2015

2014

Cash flows from operating activities:

Net income (loss)

$

5,241

$

8,735

$

10,525

$

13,123

Adjustments to reconcile net income (loss) to net cash provided by

   (used in) operating activities:

Depreciation and amortization

3,958

3,503

7,920

7,018

Deferred income taxes

3,411

5,796

6,370

8,291

Amortization of debt issue costs

199

203

393

404

Amortization of syndication contracts

85

122

171

244

Payments on syndication contracts

(124)

(154)

(246)

(312)

Non-cash stock-based compensation

940

595

1,807

1,303

Changes in assets and liabilities:

(Increase) decrease in accounts receivable

(4,558)

(7,142)

11,418

(3,632)

(Increase) decrease in prepaid expenses and other assets

278

(268)

(283)

(1,261)

Increase (decrease) in accounts payable, accrued expenses

   and other liabilities

(364)

1,557

(4,204)

(5,484)

Net cash provided by (used in) operating activities

9,066

12,947

33,871

19,694

Cash flows from investing activities:

Purchases of property and equipment and intangibles

(5,611)

(2,133)

(8,583)

(4,051)

Purchase of a business, net of cash acquired

-

(15,048)

-

(15,048)

Net cash provided by (used in) investing activities

(5,611)

(17,181)

(8,583)

(19,099)

Cash flows from financing activities:

Proceeds from stock option exercises

681

103

1,581

1,739

Payments on long-term debt

(937)

(937)

(1,875)

(1,875)

Dividends paid

(2,197)

(2,240)

(4,388)

(4,464)

Payment of contingent consideration

-

-

(1,000)

-

Net cash provided by (used in) financing activities

(2,453)

(3,074)

(5,682)

(4,600)

Net increase (decrease) in cash and cash equivalents

1,002

(7,308)

19,606

(4,005)

Cash and cash equivalents:

Beginning

49,864

47,125

31,260

43,822

Ending

$

50,866

$

39,817

$

50,866

$

39,817

 

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

Six-Month Period

Ended June 30,

Ended June 30,

2015

2014

2015

2014

Consolidated adjusted EBITDA (1)

$

16,822

$

22,147

$

33,664

$

37,132

Interest expense

(3,256)

(3,469)

(6,483)

(6,907)

Interest income

11

13

19

25

Income tax (expense) benefit

(3,477)

(5,890)

(7,023)

(8,874)

Amortization of syndication contracts

(85)

(122)

(171)

(244)

Payments on syndication contracts

124

154

246

312

Non-cash stock-based compensation included in direct operating

   expenses

(348)

(127)

(706)

(217)

Non-cash stock-based compensation included in corporate expenses

(592)

(468)

(1,101)

(1,086)

Depreciation and amortization

(3,958)

(3,503)

(7,920)

(7,018)

Net income (loss)

5,241

8,735

10,525

13,123

Depreciation and amortization

3,958

3,503

7,920

7,018

Deferred income taxes

3,411

5,796

6,370

8,291

Amortization of debt issue costs

199

203

393

404

Amortization of syndication contracts

85

122

171

244

Payments on syndication contracts

(124)

(154)

(246)

(312)

Non-cash stock-based compensation

940

595

1,807

1,303

Changes in assets and liabilities:

(Increase) decrease in accounts receivable

(4,558)

(7,142)

11,418

(3,632)

(Increase) decrease in prepaid expenses and other assets

278

(268)

(283)

(1,261)

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

(364)

1,557

(4,204)

(5,484)

Cash flows from operating activities

$

9,066

$

12,947

$

33,871

$

19,694

(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

Six-Month Period

Ended June 30,

Ended June 30,

2015

2014

2015

2014

Consolidated adjusted EBITDA (1)

$

16,822

$

22,147

$

33,664

$

37,132

Net interest expense (1)

3,046

3,253

6,071

6,478

Cash paid for income taxes

66

94

653

583

Capital expenditures (2)

5,611

2,133

8,583

4,051

Free cash flow (1)

8,099

16,667

18,357

26,020

Capital expenditures (2)

5,611

2,133

8,583

4,051

Amortization of debt issue costs

(199)

(203)

(393)

(404)

Non-cash income tax expense

(3,411)

(5,796)

(6,370)

(8,291)

Amortization of syndication contracts

(85)

(122)

(171)

(244)

Payments on syndication contracts

124

154

246

312

Non-cash stock-based compensation included in direct operating

   expenses

(348)

(127)

(706)

(217)

Non-cash stock-based compensation included in corporate expenses

(592)

(468)

(1,101)

(1,086)

Depreciation and amortization

(3,958)

(3,503)

(7,920)

(7,018)

Net income (loss)

$

5,241

$

8,735

$

10,525

$

13,123

(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