2014

LBI Media, Inc. Reports Fourth Quarter and Full Year 2011 Results

BURBANK, Calif., April 2, 2012 /PRNewswire/ -- LBI Media, Inc. today announced its financial results for the fourth quarter and year ended December 31, 2011.

For the three months ended December 31, 2011, net revenues decreased by $0.6 million, or 2%, to $30.1 million, from $30.7 million for the same period in 2010.  Net revenues for the twelve months ended December 31, 2011 increased by $1.8 million, or 2%, to $117.5 million, from $115.7 million for the same period in 2010.

For the three months ended December 31, 2011, net revenues from our television segment increased by $1.2 million, or 8%, to $16.6 million, from $15.4 million for the same period in 2010.  For the three months ended December 31, 2011, net revenues from our radio segment decreased by $1.8 million, or 12%, to $13.5 million, from $15.3 million for the same period in 2010. 

Adjusted EBITDA(1) decreased by $5.5 million, or 60%, to $3.7 million for the three months ended December 31, 2011, from $9.2 million for the same period in 2010. Adjusted EBITDA for the full year ended December 31, 2011 decreased by 22%, or $8.0 million, to $27.7 million as compared to $35.7 million for the year ended December 31, 2010.

Commenting on the Company's earnings results, Lenard Liberman, Chief Executive Officer and President said, "The EstrellaTV network celebrated its second full year of operation in 2011 and in the fourth quarter it achieved significant ratings milestones. In the November sweeps period, EstrellaTV became the #3 Hispanic television network in primetime in important male demographics. This performance came with other significant ratings successes and is a testament to the programming and distribution strategy of the network. While our radio stations experienced a challenging fourth quarter and full year in 2011, we are confident that we can return our radio group to its historic industry leading performance."

Results for the Three Months Ended December 31, 2011

Net revenues decreased by $0.6 million, or 2%, to $30.1 million for the three months ended December 31, 2011, from $30.7 million for the same period in 2010.  The change was primarily attributable to decreased advertising revenue from our radio segment, partially offset by an increase in advertising revenue from our television segment.

Net revenues for our television segment increased by $1.2 million, or 8%, to $16.6 million for the three months ended December 31, 2011, from $15.4 million for the same period in 2010.  This increase was primarily attributable to increased advertising revenue from our EstrellaTV national television network and our Denver station, KETD-TV, which began fully operating in the fourth quarter of 2010.

Net revenues for our radio segment decreased by $1.8 million, or 12%, to $13.5 million for the three months ended December 31, 2011, from $15.3 million for the same period in 2010.  This change was primarily attributable to declines in advertising revenues in our Dallas, Houston and Los Angeles markets, partially offset by an increase in syndication revenues generated by our program featuring Don Cheto.

Total operating expenses increased by $6.6 million, or 27%, to $31.2 million for the three months ended December 31, 2011, as compared to $24.6 million for the same period in 2010. This increase was primarily attributable to a $3.0 million increase in program and technical expenses, a $1.4 million increase in selling, general, and administrative expenses, a $1.5 million increase in loss on disposal of property and equipment, a $0.5 million increase in promotional expenses and a $0.2 million increase in depreciation and amortization of property and equipment.   

We recognized a net loss of $11.9 million for the three months ended December 31, 2011, as compared to a net loss of $0.5 million for the same period of 2010, a change of $11.4 million. This change was primarily attributable to an increase in interest expense, program and technical expenses, selling general and administrative expenses, loss on disposal of property and equipment, and a reduction of net revenues. 

Adjusted EBITDA decreased by $5.5 million, or 60%, to $3.7 million for the three months ended December 31, 2011, as compared to $9.2 million for the same period in 2010. The change was primarily the result of the increases in program and technical expenses, selling, general and administrative expenses, promotional expenses, and a reduction in net revenues. 

Results for the Year Ended December 31, 2011

Net revenues increased by $1.8 million, or 2%, to $117.5 million for the year ended December 31, 2011, from $115.7 million in 2010. This change was primarily attributable to increased advertising revenue from our television segment, partially offset by a decline in advertising revenue from our radio segment.

Net revenues for our radio segment declined by $4.9 million, or 8%, to $55.0 million for the year ended December 31, 2011, from $59.9 million for the same period in 2010. This change was primarily attributable to declines in advertising revenue in our Dallas, Houston and Los Angeles markets, partially offset by an increase in syndication revenues generated by our programs featuring Don Cheto.

Net revenues for our television segment increased by $6.7 million, or 12%, to $62.5 million for the year ended December 31, 2011, from $55.8 million in 2010. This increase was primarily attributable to increased revenue from our EstrellaTV national television network and a full year of revenue from our Denver station, KETD-TV, that we acquired in June 2010 and began fully operating in the fourth quarter 2010.

Total operating expenses increased by $6.9 million, or 7%, to $104.8 million for the year ended December 31, 2011 from $97.9 million for the same period in 2010. This change was primarily attributable to:

  1. a $5.0 million increase in program and technical expenses, which resulted from (a) an increase in amortization of capitalized costs related to the production of original programming content and (b) incremental costs related to our EstrellaTV network; 
  2. a $3.9 million increase in selling, general and administrative expenses primarily related to (a) additional costs related to the expansion of our EstrellaTV network, including additional sales staff and costs related to our advertising "upfront" presentations, (b) incremental costs related to our Denver station, KETD-TV, which began fully operating in the fourth quarter 2010, (c) a $0.7 million charge related to a legal settlement and (d) an increase in legal fees and employee related costs;
  3. a $2.9 million increase in loss on disposal of property and equipment, primarily related to the disposal of certain analog television transmission equipment and obsolete television stage props and other equipment; 
  4. the absence in 2011 of the $1.6 million gain on assignment of the asset purchase agreement to acquire radio station KDES-FM; and
  5. a $1.2 million increase in promotional expenses and depreciation and amortization expense.

These increases in total operating expenses were partially offset by (1) a $6.3 million decrease in broadcast licenses and long-lived asset impairment charges, (2) a $0.9 million gain related to a certain legal settlement and (3) the $0.5 million proceeds received from an insurance claim.

We recognized a net loss of $27.5 million for the year ended December 31, 2011, as compared to a net loss of $9.5 million for the same period of 2010, a change of $18.0 million. The change was primarily attributable to a $13.4 million increase in interest expense and a $5.0 million increase in program and technical expenses primarily related to the amortization of capitalized costs of original programming and other factors discussed above.

Adjusted EBITDA decreased by $8.0 million, or 22%, to $27.7 million for the year ended December 31, 2011, as compared to $35.7 million for the same period in 2010. This change was primarily attributable to the increase in program and technical expenses and the increase in selling, general and administrative expenses.

Fourth Quarter 2011 Conference Call

We will host a conference call to discuss our financial results for the three months and full year ended December 31, 2011 on Monday, April 2, 2012 at 2:30 PM Pacific Time.  Interested parties may participate in the conference call by dialing (877) 941-0844  from the United States, or (480) 629-9771 from outside the United States, beginning fifteen minutes prior to the scheduled start time and referencing conference ID 4527133.  The conference call will be recorded and made available for replay through Monday, April 16, 2012.  Investors may listen to the replay of the call by dialing (800) 406-7325 from the United States, or (303) 590-3030 from outside the United States, and entering conference ID 4527133.

Information for Holders of LBI Media's 9 1/4% Senior Secured Notes due 2019 and LBI Media's 8 1/2% Senior Subordinated Notes due 2017

The financial results for LBI Media, Inc.'s year ended December 31, 2011 will be posted on our website at www.lbimedia.com/investors.html.  Holders and beneficial owners of LBI Media, Inc.'s 9 1/4% Senior Secured Notes due 2019 and LBI Media Inc.'s 8 1/2% Senior Subordinated Notes due 2017 may access this information by contacting Fred Boyer at (818) 729-5316 to receive a temporary username and password.

About LBI Media, Inc.

We are a leading Spanish-language entertainment company and one of the largest Spanish-language radio and television broadcasters in the U.S., based on revenues and number of stations. We own 21 radio stations (fifteen FM and six AM), nine television stations and "EstrellaTV," a leading Spanish-language television broadcast network in the U.S.  Through EstrellaTV, we broadcast in 39 designated market areas, or DMAs, across the U.S. We operate in markets which comprise approximately 78% of U.S. Hispanic television households, including 18 of the top 20 Hispanic DMAs.

Forward Looking Statements

This press release 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, television broadcast network 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, changes to our relations with affiliate stations, the timing of announced acquisitions or station upgrades, the successful integration of television and radio assets we acquire, changes in the broadcasting industry generally, and changes in interest rates. Accordingly, our actual performance and results may differ significantly from those anticipated in the forward-looking statements. Please see the recent public filings of our parent, LBI Media Holdings, Inc., for information about these and other risks that may affect us. We and our parent, LBI Media Holdings, Inc., undertake no obligation to update or revise the information contained herein because of new information, future events or otherwise, except as required by law.

 

(1) We define Adjusted EBITDA as net income or loss less discontinued operations, net of income taxes, plus provision for or benefit from income taxes, loss on sale and disposal of property and equipment, net interest expense and other income, interest rate swap expense or income, impairment of broadcast licenses and long-lived assets, depreciation and amortization, stock-based compensation expense, impairment of equity method investment and equity losses of equity method investment. Management considers this measure an important indicator of our financial performance because it eliminates the effects of certain non-cash items, our discontinued operations 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 accounting principles generally accepted in the U.S., such as cash flows from operating activities, operating income or loss and net income or loss. In addition, our definition of Adjusted EBITDA may differ from those of many companies reporting similarly named measures. See tables at the end of this press release for a reconciliation of net (loss) income to Adjusted EBITDA.

- Financial Tables Follow -

LBI MEDIA, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands)





Three Months Ended
December 31,

Twelve Months Ended
December 31,


2011

2010

2011

2010






Net revenues

$   30,079

$   30,714

$ 117,520

$ 115,736

Operating expenses:





 Program and technical, exclusive of depreciation and amortization of property and equipment shown below

13,899

10,918

43,200

38,240

 Promotional, exclusive of depreciation and amortization shown below

1,976

1,427

4,156

3,465

 Selling, general and administrative, exclusive of  depreciation and amortization shown below

10,550

9,168

43,843

39,925

Depreciation and amortization of property and equipment

2,778

2,536

10,584

10,042

Loss on sale and disposal of property and equipment

2,002

548

3,521

611

Impairment of broadcast licenses and long-lived assets

880

7,222

Gain on legal settlement

(900)

Proceeds from insurance claim

(455)

Gain on assignment of asset purchase agreement

(1,599)

Total operating expenses

31,205

24,597

104,829

97,906

Operating income (loss)

(1,126)

6,117

12,691

17,830

Interest expense, net of amounts capitalized

(10,589)

(7,082)

(41,530)

(28,158)

Interest rate swap income

750

2,335

2,088

Equity in losses of equity method investment

Interest income and other income

248

206

935

775

Loss from continuing operations before provision for income taxes

 

(11,467)

 

(9)

 

(25,569)

 

(7,465)

Provision for income taxes

(437)

(482)

(1,912)

(2,058)

Net loss

$  (11,904)

$      (491)

$ (27,481)

$  (9,523)

Adjusted EBITDA (2)

$     3,662

$     9,208

$   27,703

$ 35,731

(2)  Refer to our definition of Adjusted EBITDA in footnote (1). Also, see the tables at the end of this press release for a reconciliation of net (loss) income to Adjusted EBITDA.

 

LBI MEDIA, INC.

UNAUDITED SELECTED SEGMENT DATA

(In thousands)








Three Months Ended


Twelve Months Ended



December 31,


December 31,



2011

2010

%

Change


2011

2010

% Change










Net revenues:








    Radio

$   13,451

$   15,282

-12%


$   55,004

$       59,949

-8%

    Television

16,628

15,432

8%


62,516

55,787

12%

    Total

$   30,079

$   30,714

-2%


$ 117,520

$     115,736

2%









Operating expenses before gain on assignment of asset
purchase agreement, gain on legal settlement, proceeds from
insurance claim, stock-based compensation expense,
impairment of broadcast licenses and long-lived assets, loss
on sale and disposal of property and equipment and depreciation and
amortization:








    Radio

$     7,212

$     8,010

-10%


$   32,576

$       33,288

-2%

    Television

19,205

13,496

42%


58,596

48,316

21%

    Total

$   26,417

$   21,506

23%


$   91,172

$       81,604

12%









Gain on assignment of asset purchase agreement:







    Radio

$          —

$          —


$          —

$       (1,599)

    Television


    Total

$          —

$          —


$          —

$        (1,599)









Gain on legal settlement:








    Radio

$          —

$          —


$      (900)

$              —

    Television


    Total

$          —

$          —


$      (900)

$              —









Proceeds from insurance claim:








    Radio

$          —

$          —


$      (262)

$              —

    Television


(193)

    Total

$          —

$          —


$       (455)

$              —









Stock-based compensation expense:








    Corporate

$            8

$            7

14%


$          27

$              26

4%

    Total

$            8

$            7

14%


$          27

$              26

4%










Impairment of broadcast licenses and long-lived assets:








    Radio

$          —

$          —


$          —

$              39

-100%

    Television


880

7,183

-88%

    Total

$          —

$          —


$        880

$         7,222

-88%









Loss on sale and disposal of property and equipment:








    Radio

$          —

$        229


$        223

$            299

-25%

    Television

2,002

319

528%


3,298

312

957%

    Total

$     2,002

$        548

265%


$     3,521

$            611

476%









Depreciation:








    Radio

$     1,086

$     1,333

-19%


$     5,238

$         5,355

-2%

    Television

1,692

1,203

41%


5,346

4,687

14%

    Total

$     2,778

$     2,536

10%


$   10,584

$       10,042

5%









Operating income (loss):








    Radio

$     5,153

$     5,710

-10%


$   18,129

$        22,567

-20%

    Television

(6,271)

414

-1615%


(5,411)

(4,711)

15%

    Corporate

(8)

(7)

14%


(27)

(26)

4%

    Total

$     1,126

$     6,117

-82%


$   12,691

$        17,830

-29%









Adjusted EBITDA (3)








    Radio

$     6,239

$     7,272

-14%


$   23,590

$       28,260

-17%

    Television

(2,577)

1,936

-233%


4,113

7,471

-45%

    Total

$     3,662

$     9,208

-60%


$   27,703

$       35,731

-22%

(3) See footnote (1). Also, see the tables at the end of this release for a reconciliation of operating income (loss) for each segment to Adjusted EBITDA for such segment.

LBI MEDIA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)








December 31,


December 31,



2011


2010






Assets




Current assets:





Cash and cash equivalents

$               1,162


$                  294


Accounts receivable (less allowances for doubtful accounts of $3,576 and $3,436, respectively

25,272


23,344


Current portion of television program costs, net

1,091


640


Amounts due from related parties

563


409


Current portion of employee advances

171


105


Prepaid expenses and other current assets

2,067


1,578


Assets held for sale

1,614


Total current assets

31,940


26,370






Property and equipment, net

89,209


94,163

Broadcast licenses, net

165,131


166,653

Deferred financing costs, net

11,313


4,660

Notes receivable from related parties, excluding current portion


3,034

Employee advances, excluding current portion

1,746


1,790

Television program costs, excluding current portion

14,572


10,181

Notes receivable from parent

34,374


26,055

Other assets

7,441


3,734

Total assets

$           355,726


$           336,640






Liabilities and shareholder's deficiency




Current liabilities:





Cash overdraft

$                   —


$               1,050


Accounts payable

3,359


2,858


Accrued liabilities

6,449


8,049


Accrued interest

12,409


8,625


Amounts due to parent

4,211


1,283


Current portion of long-term debt

174


1,364

Total current liabilities

26,602


23,229






Long-term debt, excluding current portion

444,798


402,174

Fair value of interest rate swap


3,146

Deferred income taxes

26,181


20,160

Other liabilities

3,593


2,890

Total liabilities

501,174


451,599






Shareholder's deficiency:





Common stock



Additional paid-in capital

101,814


101,787


Notes receivable from related parties

(3,035)



Accumulated deficit

(244,227)


(216,746)

Total shareholder's deficiency

(145,448)


(114,959)

Total liabilities and shareholder's deficiency

$           355,726


$           336,640


The table set forth below reconciles net (loss) income, calculated and presented in accordance with U.S. generally accepted accounting principles, to Adjusted EBITDA:


Three Months Ended
December 31,

Twelve Months Ended

December 31,


2011

2010

2011

2010


(unaudited)
(In thousands)

Net loss

$    (11,904)

$         (491)

$   (27,481)

$     (9,523)

Add:





Provision for (benefit from) income taxes

437

482

1,912

2,058

Interest expense and other income, net

10,341

6,876

40,595

27,383

Interest rate swap (income) expense

(750)

(2,335)

(2,088)

Impairment of broadcast licenses and long-lived assets

880

7,222

Depreciation and amortization

2,778

2,536

10,584

10,042

Loss on sale and disposal of property and equipment

2,002

548

3,521

611

Stock-based compensation expense

8

7

27

26

Adjusted EBITDA

$       3,662

$       9,208

$     27,703

$    35,731

The following is a reconciliation of operating income to Adjusted EBITDA for the company's radio segment:


Three Months Ended
December 31,

Twelve Months Ended
December 31,


2011

2010

2011

2010


(unaudited)
(In thousands)

Radio segment operating income

$      5,153

$     5,710

$     18,129

$   22,567

Depreciation

1,086

1,333

5,238

5,355

Loss on sale and disposal of property and equipment

229

223

299

Impairment of broadcast licenses and long-lived assets..

39

Radio division Adjusted EBITDA

$      6,239

$     7,272

$     23,590

$   28,260







The following is a reconciliation of operating income (loss) to Adjusted EBITDA for the company's television segment:


Three Months Ended
December 31,

Twelve Months Ended
December 31,


2011

2010

2011

2010


(unaudited)
(In thousands)

Television segment operating income (loss)

$     (6,271)

$         414

$    (5,411)

$    (4,711)

Depreciation

1,692

1,203

5,346

4,687

Loss on sale and disposal of property and equipment

2,002

319

3,298

312

Impairment of broadcast licenses and long-lived assets

880

7,183

Television division Adjusted EBITDA

$     (2,577)

$     1,936

$     4,113

$     7,471

SOURCE LBI Media, Inc.



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