LBI Media Holdings, Inc. Reports Third Quarter 2007 Results Third Quarter 2007 Net Revenues Increase 5.0% and Adjusted EBITDA Decreased

5.9%



    BURBANK, Calif., Nov. 14 /PRNewswire/ -- LBI Media Holdings, Inc.
 announced its financial results today for the three and nine months ended
 September 30, 2007.
     Results for the Three Months Ended September 30, 2007
     For the quarter ended September 30, 2007, net revenues increased by
 $1.4 million, or 5.0%, to $30.3 million, from $28.9 million for the same
 period in 2006. The increase was primarily attributable to increased
 advertising revenue from our Los Angeles and Dallas radio markets. In
 Dallas, this revenue growth was attributable to our existing radio station
 and the five radio stations we acquired in November 2006. Operating
 expenses increased by $4.7 million, or 27.3%, to $21.9 million for the
 three months ended September 30, 2007, from $17.2 million for the same
 period in 2006. This increase in operating expenses was attributable
 primarily to an increase in broadcast license impairment charges related to
 our newly acquired Dallas radio stations, as well as to increases in
 programming expenses and selling, general and administrative expenses
 attributable to increased in-house programming and additional expenses
 related to the radio stations we acquired in Dallas in November 2006 and
 local marketing agreement fees and start up costs for a radio station we
 acquired in the Riverside/San Bernardino market in September 2007. Adjusted
 EBITDA(1) decreased by $0.9 million, or 5.9%, to $13.7 million for the
 three months ended September 30, 2007, as compared to $14.6 million for the
 same period in 2006. Our Adjusted EBITDA margin(2) decreased to 45.2% in
 the third quarter of 2007 from 50.4% in the same period in 2006.
     We recognized a net loss of $12.8 million for the three months ended
 September 30, 2007, as compared to net income of $3.8 million for the same
 period of 2006, a decrease of $16.6 million. This decrease was primarily
 attributable to a $1.8 million increase in impairment charges for our radio
 broadcast licenses, a $8.8 million one-time loss on the redemption of the
 10 1/8% senior subordinated notes by our wholly owned subsidiary, LBI
 Media, Inc., in July 2007, and local marketing agreement fees and start up
 costs relating to a radio station we acquired in the Riverside/San
 Bernardino market in September 2007.
     Radio division net revenues increased by $2.7 million, or 20.2%, to
 $16.5 million for the quarter ended September 30, 2007, from $13.8 million
 for the same quarter last year. Increases in revenue at our new and
 existing Dallas radio stations were augmented by an increase in revenues at
 our Los Angeles radio stations. Operating expenses for our radio division
 increased by $4.1 million, or 51.7%, to $12.2 million for the three months
 ended September 30, 2007, from $8.1 million for the same period in 2006.
 This increase in operating expenses is attributable primarily to an
 increase in broadcast license impairment charges related to our newly
 acquired Dallas radio stations, as well as to additional programming
 expenses and selling, general and administrative expenses related to radio
 stations we acquired in Dallas in November 2006 and local marketing
 agreement fees and start up costs for a radio station we acquired in the
 Riverside/San Bernardino market in September 2007. Adjusted EBITDA
 increased by $0.9 million, or 11.9%, to $8.4 million for the three months
 ended September 30, 2007, as compared to Adjusted EBITDA of $7.5 million
 for the same period in 2006.
     Television division net revenues decreased by $1.3 million, or 8.8%, to
 $13.8 million for the three months ended September 30, 2007, from $15.1
 million for the same period in 2006. This decrease was primarily
 attributable to decreased advertising revenue in our California markets,
 partially offset by increased advertising revenues in our Texas markets.
 Operating expenses for our television division increased by $0.6 million,
 or 5.8%, to $9.7 million for the three months ended September 30, 2007,
 from $9.1 million for the same period in 2006. The increase was primarily
 due to increases in programming expenses related to the additional
 production of in-house programming. Adjusted EBITDA decreased by $1.7
 million, or 25.0%, to $5.3 million for the quarter ended September 30,
 2007, from $7.0 million for the same quarter last year.
     Results for the Nine Months Ended September 30, 2007
     Net revenues increased $7.6 million, or 9.4%, to $88.0 million, from
 $80.4 million for the nine months ended September 30, 2007 compared to the
 same period in 2006. The increase was primarily attributable to increased
 advertising revenue from our Dallas radio markets, which is comprised of
 our existing FM radio station and the five radio stations we acquired in
 November 2006. Operating expenses increased by $5.8 million, or 11.8%, to
 $54.9 million for the nine months ended September 30, 2007, from $49.1
 million for the same period in 2006. This increase was primarily
 attributable to increases in selling, general and administrative expenses
 and programming expenses related to additional production of in-house
 television programs, as well as for the radio stations we acquired in
 Dallas in November 2006 and local marketing agreement fees and start up
 costs for a radio station we acquired in the Riverside/San Bernardino
 market in September 2007, and depreciation and amortization. The increases
 in operating expenses were partially offset by a decrease in deferred
 compensation expense. Adjusted EBITDA increased by $3.8 million, or 9.8%,
 to $42.9 million for the nine months ended September 30, 2007, as compared
 to $39.1 million for the same period in 2006. Our Adjusted EBITDA margin
 increased to 48.7% for the nine months ended September 30, 2007, from 48.6%
 in the same period in 2006.
     We recognized a net loss of $53.8 million for the nine months ended
 September 30, 2007, as compared to net income of $8.0 million for the same
 period of 2006, a decrease of $61.8 million. This change was primarily
 attributable to a one-time non-cash charge of $46.9 million to adjust our
 deferred tax accounts in the first quarter of 2007 as a result of the sale
 of Class A common stock of our parent, Liberman Broadcasting, Inc., in
 March 2007, and a $8.8 million one-time loss on the redemption of LBI
 Media's 10 1/8% senior subordinated notes in July 2007.
     Radio division net revenues increased by $8.1 million, or 21.6%, to
 $45.7 million for the nine months ended September 30, 2007, from $37.6
 million for the nine months ended September 30, 2006. This increase was
 primarily attributable to revenue increases at our new and existing Dallas
 radio stations, augmented by an increase in revenues at our Los Angeles
 radio stations. Operating expenses for our radio division increased by $4.1
 million, or 20.2%, to $24.2 million for the nine months ended September 30,
 2007, from $20.1 million for the same period in 2006. This increase in
 operating expenses was attributable primarily to additional programming
 expenses and selling, general and administrative expenses related to the
 radio stations we acquired in Dallas in November 2006 and local marketing
 agreement fees and start up costs for a radio station we acquired in the
 Riverside/San Bernardino market in September 2007, as well as to broadcast
 license impairment charges for the Dallas radio stations we recently
 acquired. The increases in operating expenses were partially offset by a
 decrease in deferred compensation expense. Adjusted EBITDA for our radio
 division increased by $7.3 million, or 35.9%, to $27.8 million for the nine
 months ended September 30, 2007, as compared to $20.5 million for the same
 period in 2006.
     Television division net revenues decreased by $0.5 million, or 1.3%, to
 $42.3 million for the nine months ended September 30, 2007, from $42.8
 million for the same period in 2006. This decrease was attributable to
 decreased advertising revenue in our California markets, which were
 partially offset by increased advertising revenue in our Texas markets.
 Operating expenses for our television division increased by $1.7 million,
 or 6.0%, to $30.7 million for the nine months ended September 30, 2007,
 from $29.0 million for the same period in 2006. This increase was primarily
 attributable to increases in programming expenses related to additional
 production of in-house television programming and to increases in selling,
 general and administrative expenses, including a settlement reserve for
 certain legal matters. The increases in operating expenses were partially
 offset by a decrease in impairment charges for our television broadcast
 licenses that we recorded in the second quarter of 2006. Adjusted EBITDA
 for our television division decreased by $3.5 million, or 19.0% to $15.1
 million for the nine months ended September 30, 2007, from $18.6 million
 for the same period in 2006.
     Commenting on our results, Lenard Liberman, our Executive Vice
 President, said, "In the third quarter we closed our acquisition of KWIE-FM
 (now KRQB-FM) and we still look to complete our acquisition of KPNZ-TV in
 the fourth quarter. Our ratings across radio and television have remained
 strong and we remain optimistic that we will experience revenue growth in
 2008 as a result of that performance."
     Information for Holders of LBI Media's 8 1/2% Senior Subordinated Notes
 due 2017
     Results for LBI Media, Inc.'s three and nine months ended September 30,
 2007 will be posted on our website at http://www.lbimedia.com/investors.
 Holders and beneficial owners of LBI Media, Inc.'s 8 1/2% Senior
 Subordinated Notes due 2017 may access this information by contacting
 Lenard Liberman at (818) 563-5722 to receive a temporary username and
 password.
     Third Quarter 2007 Conference Call
     We will host a conference call to discuss our financial results for the
 third quarter of 2007 on Wednesday, November 14, 2007 at 5:00 PM Eastern
 Time. Interested parties may participate in the conference call by dialing
 (800) 896-8445 five minutes prior to the scheduled start time of the call
 and asking for the "LBI Media Holdings, Inc. Third Quarter 2007 Results
 Conference Call." The conference call will be recorded and made available
 for replay through Monday, November 19. Investors may listen to the replay
 of the call by dialing (888) 203-1112 then entering the passcode 3114947.
     About LBI Media Holdings, Inc.
     We are one of the largest owners and operators of Spanish-language
 radio and television stations in the United States, based on revenues and
 number of stations. We own twenty-two radio stations and four television
 stations serving the Los Angeles, CA, Riverside/San Bernardino, CA,
 Houston, TX, Dallas-Ft. Worth, TX and San Diego, CA markets. We also own
 three television production facilities.
     Forward Looking Statements
     This news announcement contains certain forward-looking statements
 within the meaning of the U.S. securities laws. These statements are based
 upon current expectations and involve certain risks and uncertainties,
 including those related to the expected future operating performance of our
 radio stations, television stations and studio operations. Forward-looking
 statements include but are not limited to information preceded by, or that
 include the words, "believes", "expects", "prospects", "pacings",
 "anticipates", "could", "estimates", "forecasts" or similar expressions.
 The reader should note that these statements may be impacted by several
 factors, including economic changes, regulatory changes, increased
 competition, the timing of announced acquisitions or station upgrades,
 changes in the broadcasting industry generally, and changes in interest
 rates. Accordingly, our actual performance and results may differ from
 those anticipated in the forward-looking statements. Please see our recent
 public filings for information about these and other risks that may affect
 us. We undertake no obligation to update or revise the information
 contained herein because of new information, future events or otherwise.
     (1) We define Adjusted EBITDA as net income (loss) plus income tax expense
         (benefit), gain (loss) on sale of property and equipment, gain (loss)
         on sale of investments, net interest expense, interest rate swap
         expense, impairment of broadcast licenses, and depreciation and
         amortization. Management considers this measure an important indicator
         of our liquidity relating to our operations because it eliminates the
         effects of certain noncash items and our capital structure. This
         measure 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 U.S. generally accepted
         accounting principles, such as cash flows from operating activities,
         operating income and net income. In addition, our definition of
         Adjusted EBITDA may differ from those of many companies reporting
         similarly named measures.
 
         In determining our Adjusted EBITDA in past years, we treated deferred
         compensation expense (benefit) as a noncash item, because we had the
         option and the intention to pay such amounts in the common stock of
         our indirect parent after our indirect parent's initial public
         offering. Our first payment became due in 2006 and we have made
         additional payments in 2007. We have determined that we can no longer
         meet the conditions necessary to pay the deferred compensation in
         stock. Accordingly, we have settled our deferred compensation amounts
         in cash. We have presented prior periods' Adjusted EBITDA to conform
         to this current treatment. As a result, Adjusted EBITDA for prior
         periods may appear as a different amount from what we have reported in
         prior periods.
 
     (2) We define Adjusted EBITDA margin as Adjusted EBITDA divided by net
         revenues.
 
 
 
     Results of Operations:
 
                            LBI MEDIA HOLDINGS, INC.
           UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (In thousands)
 
                                      Three Months Ended   Nine Months Ended
                                          September 30,       September 30,
                                         2007      2006      2007      2006
 
     Net revenues                      $30,323   $28,885   $87,983   $80,417
     Operating expenses:
     Program and technical, exclusive
      of deferred compensation expense
      of $0 and $21 for the three months
      ended September 30, 2007 and 2006,
      respectively, $0 and $6 for the
      nine months ended September 30, 2007
      and 2006, respectively, depreciation
      and amortization, and impairment of
      broadcast licenses shown below     5,852     4,859    17,321    14,298
     Promotional, exclusive of
      depreciation and amortization,
      and impairment of broadcast
      licenses shown below                 938       826     2,046     1,664
     Selling, general and administrative,
      exclusive of deferred compensation
      expense (benefit) of $0 and $105
      for the three months ended September
      30, 2007 and 2006, respectively,
      $(3,952) and $234 for the nine months
      ended September 30, 2007 and 2006,
      respectively, depreciation and
      amortization, and impairment of
      broadcast licenses shown below     9,831     8,512    29,700    25,165
       Deferred compensation expense
        (benefit)                            -       126    (3,952)      240
       Depreciation and amortization     2,228     1,631     6,755     4,894
       Impairment of broadcast licenses  3,046     1,244     3,046     2,844
     Total operating expenses           21,895    17,198    54,916    49,105
 
     Operating income                    8,428    11,687    33,067    31,312
     Loss on note redemption            (8,776)        -    (8,776)        -
     Interest expense, net of
      amount capitalized               (10,212)   (7,885)  (27,862)  (23,190)
     Interest rate swap expense         (1,713)        -      (586)        -
     Interest and other income             659        32       764        91
     Income (loss) before provision
      for income taxes                 (11,614)    3,834    (3,393)    8,213
     Provision for income taxes         (1,138)      (78)  (50,456)     (253)
     Net income (loss)                $(12,752)   $3,756  $(53,849)   $7,960
 
     Adjusted EBITDA (3)               $13,702   $14,562   $42,868   $39,050
 
     Adjusted EBITDA Margin (4)           45.2%     50.4%     48.7%     48.6%
 
 
     (3) Refer to footnote (1) on Page 1.
     (4) Refer to footnote (2) on Page 1.
 
 
 
     The table set forth below reconciles net cash provided by operating
     activities, calculated and presented in accordance with U.S. generally
     accepted accounting principles, to Adjusted EBITDA:
 
                                      Three Months Ended   Nine Months Ended
                                          September 30,       September 30,
                                         2007      2006      2007      2006
                                                   (In thousands)
     Net cash provided by
      operating activities             $(8,743)   $4,970   $(3,111)  $13,764
     Add:
       Income tax expense                1,138        78    50,456       253
       Loss on redemption of the 101/8%
        senior subordinated notes,
        excluding the write off of
        $1,181 of unamortized deferred
        financing costs                  7,595         -     7,595         -
       Interest expense and other
        income, net                      9,553     7,850    27,098    23,099
     Less:
       Amortization of deferred
        financing costs                   (325)     (297)     (926)     (794)
       Accretion on senior
        discount notes                  (1,648)   (1,440)   (4,756)   (4,232)
       Provision for doubtful accounts    (300)     (273)     (821)     (755)
       Deferred compensation
        benefit (expense)                    -      (125)    3,952      (240)
     Changes in operating assets and liabilities:
       Accounts receivable                 475     1,160     3,101     4,413
       Deferred compensation payment     3,003         -     4,377         -
       Program rights                     (133)     (198)     (455)     (622)
       Amounts due from related parties      3       102       (12)      240
       Prepaid expenses and
        other current assets                55      (261)     (139)     (317)
       Employee advances                    (2)     (115)      (10)      212
       Accounts payable and
        accrued expenses                   732      (429)    2,053       734
       Accrued interest                  3,332     3,699     4,715     3,517
       Deferred taxes payable          (1,041)         -   (50,123)        -
       Other assets and liabilities          8      (159)     (126)     (222)
     Adjusted EBITDA                   $13,702   $14,562   $42,868   $39,050
 
 
 
     The following is a reconciliation of operating income to Adjusted EBITDA
     for our radio division:
 
                                      Three Months Ended   Nine Months Ended
                                          September 30,       September 30,
                                         2007      2006      2007      2006
                                                   (In thousands)
     Radio division operating income    $4,306    $5,695   $21,457   $17,420
       Depreciation and amortization     1,080       598     3,311     1,794
       Impairment of broadcast licenses  3,046     1,244     3,046     1,244
     Radio division Adjusted EBITDA     $8,432    $7,537   $27,814   $20,458
 
 
 
     The following is a reconciliation of operating income to Adjusted EBITDA
     for our television division:
 
                                          Three Months Ended  Nine Months Ended
                                              September 30,     September 30,
                                              2007    2006      2007    2006
                                                      (In thousands)
     Television division operating income    $4,122  $5,992   $11,610 $13,892
       Depreciation and amortization          1,148   1,033     3,444   3,100
       Impairment of broadcast licenses           -       -         -   1,600
     Television division Adjusted EBITDA     $5,270  $7,025   $15,054 $18,592
 
 

SOURCE LBI Media Holdings, Inc.

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