Entravision Communications Corporation Reports Third Quarter 2013 Results

06 Nov, 2013, 16:10 ET from Entravision Communications Corporation

SANTA MONICA, Calif., Nov. 6, 2013 /PRNewswire/ -- Entravision Communications Corporation (NYSE: EVC) today reported financial results for the three- and nine-month periods ended September 30, 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 8.  Unaudited financial highlights are as follows:

 

Three-Month Period

Nine-Month Period

Ended September 30,

Ended September 30,

2013

2012

% Change

2013

2012

% Change

Net revenue

$       57,786

$      58,486

(1)%

$    163,823

$    159,501

3%

Operating expenses (1)

33,991

32,886

3%

99,311

96,403

3%

Corporate expenses (2)

5,011

4,465

12%

14,244

12,527

14%

Consolidated adjusted EBITDA (3)

19,864

21,640

(8)%

53,241

51,521

3%

Free cash flow (4)

$       11,919

$      10,545

13%

$      25,552

$      19,209

33%

Free cash flow per share, basic and diluted (4)

$           0.14

$          0.12

17%

$          0.29

$          0.22

32%

Net income (loss) applicable to common stockholders

$     (21,384)

$        7,233

NM

$     (17,268)

$        5,904

NM

Net income (loss) per share applicable

to common stockholders, basic and diluted

$         (0.24)

$          0.08

NM

$         (0.20)

$          0.07

NM

Weighted average common shares outstanding, basic

87,959,856

85,940,225

87,170,106

85,861,671

Weighted average common shares outstanding, diluted

87,959,856

86,386,655

87,170,106

86,220,868

(1) Operating expenses include direct operating, selling, general and administrative expenses. Included in operating expenses are $0.3 million of non-cash stock-based compensation for each of the three-month periods ended September 30, 2013 and 2012, and $0.8 million and $0.6 million of non-cash stock-based compensation for the nine-month periods ended September 30, 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 $1.0 million and $0.5 million of non-cash stock-based compensation for the three-month periods ended September 30, 2013 and 2012, respectively, and $2.7 million and $1.1 million of non-cash stock-based compensation for the nine-month periods ended September 30, 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 (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 third quarter, we recorded continued growth in core advertising revenue (excluding retransmission consent revenue and political advertising revenue) as both our television and radio segments outperformed their respective industry averages. Our improved core revenue performance was offset by decreased political revenue, which benefited from the presidential election last year, and was not material in 2013. As a result, net revenue was off modestly in the quarter; however, we improved our free cash flow over the third quarter of 2012 as we benefited from the successful refinancing of our debt. 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 September 30, 2013 Compared to Three-Month Period Ended September 30, 2012 (Unaudited)

Three-Month Period

Ended September 30,

2013

2012

% Change

Net revenue

$      57,786

$      58,486

(1)%

Operating expenses (1)

33,991

32,886

3%

Corporate expenses (1)

5,011

4,465

12%

Depreciation and amortization

3,613

4,013

(10)%

Operating income (loss)

15,171

17,122

(11)%

Interest expense, net

(5,340)

(8,661)

(38)%

Gain (loss) on debt extinguishment

(29,404)

-

NM

Income (loss) before income taxes

(19,573)

8,461

NM

Income tax (expense) benefit

(1,811)

(1,228)

47%

Net income (loss)

$   (21,384)

$       7,233

NM

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

 

Net revenue decreased to $57.8 million for the three-month period ended September 30, 2013 from $58.5 million for the three-month period ended September 30, 2012, a decrease of $0.7 million. Of the overall decrease, $1.2 million was generated by our television segment and was primarily attributable to a decrease in political advertising revenue, which was not material in 2013, partially offset by increases in local advertising revenue and retransmission consent revenue.  This decrease was partially offset by a $0.5 million increase that was generated by our radio segment and was primarily attributable to an increase in local advertising revenue, partially offset by a decrease in political advertising revenue, which was not material in 2013.

Operating expenses increased to $34.0 million for the three-month period ended September 30, 2013 from $32.9 million for the three-month period ended September 30, 2012, an increase of $1.1 million. The increase was primarily attributable to an increase in salary expense and an increase in expenses associated with the increase in local advertising revenue.

Corporate expenses increased to $5.0 million for the three-month period ended September 30, 2013 from $4.5 million for the three-month period ended September 30, 2012, an increase of $0.5 million. The increase was primarily attributable to an increase in non-cash stock-based compensation expense.

During the three-month period ended September 30, 2013, we recorded a loss on debt extinguishment of $29.4 million related to the premium associated with the redemption of our Notes, the unamortized bond discount, and finance costs.

                                                                       

Nine-Month Period Ended September 30, 2013 Compared to Nine-Month Period Ended September 30, 2012 (Unaudited)

Nine-Month Period

Ended September 30,

2013

2012

% Change

Net revenue

$  163,823

$   159,501

3%

Operating expenses (1)

99,311

96,403

3%

Corporate expenses (1)

14,244

12,527

14%

Depreciation and amortization

11,388

12,436

(8)%

Operating income (loss)

38,880

38,135

2%

Interest expense, net

(20,989)

(26,707)

(21)%

Gain (loss) on debt extinguishment

(29,534)

(1,230)

NM

Income (loss) before income taxes

(11,643)

10,198

NM

Income tax (expense) benefit

(5,625)

(4,294)

31%

Net income (loss)

$    (17,268)

$       5,904

NM

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

 

Net revenue increased to $163.8 million for the nine-month period ended September 30, 2013 from $159.5 million for the nine-month period ended September 30, 2012, an increase of $4.3 million. Of the overall increase, $2.8 million was generated by our television segment and was primarily attributable to increases in local and national advertising revenue, and retransmission consent revenue, partially offset by a decrease in political advertising revenue, which was not material in 2013.  Additionally, $1.5 million of the overall increase was generated by our radio segment and was primarily attributable to increases in local and national advertising revenue, partially offset by a decrease in political advertising revenue, which was not material in 2013.

Operating expenses increased to $99.3 million for the nine-month period ended September 30, 2013 from $96.4 million for the nine-month period ended September 30, 2012, an increase of $2.9 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 $14.2 million for the nine-month period ended September 30, 2013 from $12.5 million for the nine-month period ended September 30, 2012, an increase of $1.7 million. The increase was primarily attributable to an increase in non-cash stock-based compensation expense.

Loss on debt extinguishment increased to $29.5 million for the nine-month period ended September 30, 2013 from $1.2 million for the nine-month period ended September 30, 2012, an increase of $28.3 million. The increase was primarily attributable to the premium associated with the redemption of our Notes, the unamortized bond discount, and finance costs.

Segment Results

The following represents selected unaudited segment information:

Three-Month Period

Nine-Month Period

Ended September 30,

Ended September 30,

2013

2012

% Change

2013

2012

% Change

Net Revenue

Television

$      39,747

$      40,903

(3)%

$    114,289

$    111,466

3%

Radio

18,039

17,583

3%

49,534

48,035

3%

Total

$      57,786

$      58,486

(1)%

$    163,823

$    159,501

3%

Operating Expenses (1)

Television

$      20,032

$      19,573

2%

$      58,519

$      57,314

2%

Radio

13,959

13,313

5%

40,792

39,089

4%

Total

$      33,991

$      32,886

3%

$      99,311

$      96,403

3%

Corporate Expenses (1)

$        5,011

$        4,465

12%

$      14,244

$      12,527

14%

Consolidated adjusted EBITDA (1)

$      19,864

$      21,640

(8)%

$      53,241

$      51,521

3%

(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 third quarter results on November 6, 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 owns and/or operates 56 primary television stations and 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)

September 30,

December 31,

2013

2012

(Unaudited)

ASSETS

Current assets

Cash and cash equivalents

$        53,546

$        36,130

Trade receivables, net of allowance for doubtful accounts 

52,017

48,030

Prepaid expenses and other current assets 

5,434

4,245

Total current assets

110,997

88,405

Property and equipment, net

59,589

61,435

Intangible assets subject to amortization, net

20,446

22,349

Intangible assets not subject to amortization

220,701

220,701

Goodwill

36,647

36,647

Other assets

7,284

8,514

Total assets

$      455,664

$      438,051

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

Current maturities of long-term debt 

$          3,750

$             150

Advances payable, related parties

118

118

Accounts payable and accrued expenses 

29,025

39,158

Total current liabilities

32,893

39,426

Long-term debt, less current maturities (net of bond discount of $0 and $2,982)

371,250

340,664

Other long-term liabilities

6,874

7,359

Deferred income taxes

50,256

45,201

Total liabilities

461,273

432,650

Stockholders' equity (deficit)

Class A common stock

6

5

Class B common stock

2

2

Class U common stock

1

1

Additional paid-in capital

937,071

930,814

Accumulated deficit

(942,689)

(925,421)

Total stockholders' equity (deficit)

(5,609)

5,401

Total liabilities and stockholders' equity (deficit)

$      455,664

$      438,051

 

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

Three-Month Period

Nine-Month Period

Ended September 30,

Ended September 30,

2013

2012

2013

2012

Net revenue

$            57,786

$            58,486

$          163,823

$          159,501

Expenses:

Direct operating expenses 

25,860

23,293

76,073

67,803

Selling, general and administrative expenses 

8,131

9,593

23,238

28,600

Corporate expenses 

5,011

4,465

14,244

12,527

Depreciation and amortization 

3,613

4,013

11,388

12,436

42,615

41,364

124,943

121,366

Operating income (loss)

15,171

17,122

38,880

38,135

Interest expense

(5,352)

(8,671)

(21,017)

(26,730)

Interest income

12

10

28

23

Gain (loss) on debt extinguishment

(29,404)

-

(29,534)

(1,230)

Income (loss) before income taxes

(19,573)

8,461

(11,643)

10,198

Income tax (expense) benefit

(1,811)

(1,228)

(5,625)

(4,294)

Net income (loss) applicable to common stockholders

$          (21,384)

$              7,233

$          (17,268)

$              5,904

Basic and diluted earnings per share:

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

basic and diluted

$              (0.24)

$                0.08

$              (0.20)

$                0.07

Weighted average common shares outstanding, basic

87,959,856

85,940,225

87,170,106

85,861,671

Weighted average common shares outstanding, diluted

87,959,856

86,386,655

87,170,106

86,220,868

 

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

Three-Month Period

Nine-Month Period

Ended September 30,

Ended September 30,

2013

2012

2013

2012

Cash flows from operating activities:

Net income (loss)

$           (21,384)

$               7,233

$           (17,268)

$               5,904

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

Depreciation and amortization

3,613

4,013

11,388

12,436

Deferred income taxes

1,761

1,080

5,055

3,485

Amortization of debt issue costs

408

569

1,438

1,706

Amortization of syndication contracts

148

175

450

556

Payments on syndication contracts

(344)

(435)

(995)

(1,369)

Non-cash stock-based compensation

1,276

765

3,518

1,763

(Gain) loss on debt extinguishment

29,404

-

29,534

1,230

Changes in assets and liabilities:

(Increase) decrease in accounts receivable

626

260

(3,701)

(3,511)

(Increase) decrease in prepaid expenses and other assets

(869)

(879)

(1,323)

(1,056)

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

(9,473)

(5,468)

(10,111)

(7,466)

Net cash provided by (used in) operating activities

5,166

7,313

17,985

13,678

Cash flows from investing activities:

Purchases of property and equipment and intangibles

(2,963)

(2,855)

(7,568)

(6,502)

Net cash provided by (used in) investing activities

(2,963)

(2,855)

(7,568)

(6,502)

Cash flows from financing activities:

Proceeds from issuance of common stock

348

23

2,740

23

Payments on long-term debt

(364,997)

-

(365,047)

(20,600)

Proceeds from borrowings on long-term debt

375,000

-

375,000

-

Payments of capitalized debt offering and issuance costs

(74)

-

(5,694)

(80)

Net cash provided by (used in) financing activities

10,277

23

6,999

(20,657)

Net increase (decrease) in cash and cash equivalents

12,480

4,481

17,416

(13,481)

Cash and cash equivalents:

Beginning

41,066

40,757

36,130

58,719

Ending

$             53,546

$             45,238

$             53,546

$             45,238

 

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

Nine-Month Period

Ended September 30,

Ended September 30,

2013

2012

2013

2012

Consolidated adjusted EBITDA (1)

$       19,864

$       21,640

$       53,241

$       51,521

Interest expense

(5,352)

(8,671)

(21,017)

(26,730)

Interest income

12

10

28

23

Income tax (expense) benefit

(1,811)

(1,228)

(5,625)

(4,294)

Amortization of syndication contracts

(148)

(175)

(450)

(556)

Payments on syndication contracts

344

435

995

1,369

Non-cash stock-based compensation included in direct operating

 expenses

(297)

(45)

(776)

(101)

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

and administrative expenses

-

(222)

-

(546)

Non-cash stock-based compensation included in corporate expenses

(979)

(498)

(2,742)

(1,116)

Depreciation and amortization

(3,613)

(4,013)

(11,388)

(12,436)

Gain (loss) on debt extinguishment

(29,404)

-

(29,534)

(1,230)

Net income (loss)

(21,384)

7,233

(17,268)

5,904

Depreciation and amortization

3,613

4,013

11,388

12,436

Deferred income taxes

1,761

1,080

5,055

3,485

Amortization of debt issue costs

408

569

1,438

1,706

Amortization of syndication contracts

148

175

450

556

Payments on syndication contracts

(344)

(435)

(995)

(1,369)

Non-cash stock-based compensation

1,276

765

3,518

1,763

(Gain) loss on debt extinguishment

29,404

-

29,534

1,230

Changes in assets and liabilities:

(Increase) decrease in accounts receivable

626

260

(3,701)

(3,511)

(Increase) decrease in prepaid expenses and other assets

(869)

(879)

(1,323)

(1,056)

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

(9,473)

(5,468)

(10,111)

(7,466)

Cash flows from operating activities

$         5,166

$         7,313

$       17,985

$       13,678

(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

Nine-Month Period

Ended September 30,

Ended September 30,

2013

2012

2013

2012

Consolidated adjusted EBITDA (1)

$       19,864

$       21,640

$       53,241

$       51,521

Net interest expense (1)

4,932

8,092

19,551

25,001

Cash paid for income taxes

50

148

570

809

Capital expenditures (2)

2,963

2,855

7,568

6,502

Free cash flow (1)

11,919

10,545

25,552

19,209

Capital expenditures (2)

2,963

2,855

7,568

6,502

Amortization of debt issue costs

(408)

(569)

(1,438)

(1,706)

Non-cash income tax expense

(1,761)

(1,080)

(5,055)

(3,485)

Amortization of syndication contracts

(148)

(175)

(450)

(556)

Payments on syndication contracts

344

435

995

1,369

Non-cash stock-based compensation included in direct operating

 expenses

(297)

(45)

(776)

(101)

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

and administrative expenses

-

(222)

-

(546)

Non-cash stock-based compensation included in corporate expenses

(979)

(498)

(2,742)

(1,116)

Depreciation and amortization

(3,613)

(4,013)

(11,388)

(12,436)

Gain (loss) on debt extinguishment

(29,404)

-

(29,534)

(1,230)

Net income (loss)

$     (21,384)

$         7,233

$     (17,268)

$         5,904

(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